Recent Changes - 50th GST Council Meet

GST
Recent Changes
50th GST Council Meet

DISCUSSION AGENDA
INTRODUCTION RATE
CHANGES
GAMING
INDUSTRY
CIRCULARS AND
TRADE FACILITATION
PARTING
THOUGHTS

LEGISLATIVE JOURNEY
2005
GST was first
mooted in
Budget 2005
2009
Discussion Paper
on GST published
by Emp. Comm
2016
Constitution
Bill passed &
GST Council
formed
EARLY 2017
GST Council
recommends 5
GST laws,
ratified by all
JUL 2017
GST
IMPLEMENTED
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A B
D C
Initial Phase
Jul 17 to Jun 18
9 Meetings happened
in the first year of
GST itself
Consolidation Phase
Jul 18 to Jun 20
13 meetings in 2
years thereafter
Birth Phase
Sept 16 to Jun 17
18 Council meetings
were held before 1st
July 2017
Reaction Phase
Jul 20 to Jul 23
ONLY 10 meetings in
3 years thereafter
GST COUNCIL MEETINGS
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TAXATION – GOODS – ‘As is basis’
Changes made on ‘as is basis’
 Uncooked/unfried snack pellets rate reduced to 5%.
 Raw cotton, including kala cotton, by agriculturists to cooperatives is
taxable under reverse charge mechanism @ 5%
 Reduce GST rate from 12% to 5% on Imitation Zari thread or yarn
 Trauma, spine and arthroplasty implants for the period prior to
18.07.2022
 Reduce the GST rate on fish soluble paste from 18% to 5%
 Desiccated coconut for the period 1.7.2017 to 27.7.2017
 Plates and cups made of areca leaves prior to 01.10.2019.
 Biomass briquettes for the period 01.7.2017 to 12.10.2017.
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TAXATION – GOODS – ‘As is basis’
Meaning of ‘As is basis’
 Due to confusion in trade with respect to particular goods or services,
some taxpayers choose to pay GST at a certain rate and some choose
not to pay at all or pay at different rate, council chooses to remove this
anomaly without penalizing the taxpayers.
 Government will come out with removal of difficulty order and specify
a date till which
 those who have not paid or short paid the taxes will not be
questioned and
 those who have paid the taxes higher than the proposed new rate
will not be eligible for any refund.
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TAXATION – GOODS
Change in Tax on Goods
 Exempt IGST on Dinutuximab (Quarziba) medicine when imported
for personal use.
 Exempt IGST on medicines and Food for Special Medical Purposes
(FSMP) used in the treatment of specified rare diseases when
imported for personal use or by any person or institution on
recommendation of any of the listed Centers of Excellence.
 LD (Linz-Donawitz) Slag – 18% to 5%
 RBL Bank and ICBC bank included in the list of banks who are
exempt from IGST on import of gold, silver and platinum
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TAXATION – TOBACCO
 Currently GST rates on all Tobacco products are based on retail sale
price, ad valorem rate system was discontinued because of leakage of
revenue.
 Now, Pan masala, tobacco products etc, where it is not legally
required to declare the retail sale price, the earlier ad valorem rate
as was applicable on 31st March 2023 will be notified in order for levy
of Compensation Cess.
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TAXATION – TOBACCO
 Special procedure to be mandated for the manufacturers of tobacco,
pan masala & other similar items for registration of machines and
for filing of special monthly returns.
 Amendment to be made to provide for Special penalty for non-
registration of machines by such manufacturers.
 Law to be notified with effect from 01.10.2023 to provide for restriction
of IGST refund route in respect of exports of tobacco, pan masala &
other similar items as well as Mentha oil.
 This (capacity) data will most probably be used for reconciling with
the actual output reported by tobacco manufacturers.
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S U V’ s
POPULAR NAME
It is Popularly
known as Sports
Utility Vehicle
in the market
LENGTH
Length
Exceeding
4000 mm
STRENGTH
Engine Capacity
exceeding 1500 cc
GROUND
CLEARANCE
Above 170 mm
TAXATION – UTILITY VEHICLES

S/M U V’ s
POPULAR NAME
All Utility
Vehicle now
included
LENGTH
Length
Exceeding
4000 mm
STRENGTH
Engine Capacity
exceeding 1500 cc
GROUND
CLEARANCE
Above 170 mm
TAXATION – UTILITY VEHICLES
Till now, only SUVs were taxed at 50% (GST 28% + Cess 22%), now all Utility vehicles
satisfying above conditions will be taxed at 50%

TAXATION – GROUND CLEARANCE
 There was a huge controversy on how to evaluate the condition of
Ground Clearance of 170 mm & above.
 Ground clearance is to be taken in Laden condition or Unladen?
 AAAR Maharashtra in case of Tata Motors (Tata Harrier) held that
Ground clearance has to be calculated in Laden stage of the vehicle,
which meant that the car must be fully loaded with passengers
and luggage and then the Ground clearance must be measured.
 The council has now decided to add an explanation to clarify that
‘Ground clearance’ will be measured in unladen condition.
 Would it Retrospective ??? Its more then a million-dollar question
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TAXATION – SERVICES
 Satellite Launch services provided by Government organization was
exempt, this would now be extended to private companies as well.
 GTAs will not be required to file declaration for paying GST under
forward charge every year. If they have exercised this option for a
particular financial year, they shall be deemed to have exercised it for
the next and future financial years unless they file a declaration that
they want to revert to reverse charge mechanism (RCM).
 Date of exercising the option by GTAs to pay GST under forward
charge shall be from 1st Jan to 31st March of preceding Financial Year
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TAXATION – RCM – DIRECTOR SVS
 Services supplied by a director of a company to the company in his
private or personal capacity such as supplying services by way of
renting of immovable property to the company or body corporate are
not taxable under RCM.
 Only those services supplied by a director of company or body
corporate, which are supplied by him as or in the capacity of director
of that company or body corporate shall be taxable under RCM in the
hands of the company
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TAXATION – MOVIES – FOOD
 Supply of food and beverages in
cinema halls is taxable as restaurant
service @ 5% (without ITC):
 they are supplied as a part of
service and
 supplied independently of the
cinema exhibition service.
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TAXATION – MOVIES – FOOD
 If the sale of cinema ticket and
supply of food and beverages are
clubbed together, and such bundled
supply satisfies the test of composite
supply, the entire supply will attract
GST at 18%
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ACTIONABLE CLAIM
Actionable claim means
▪ a claim to any debt, other than a debt secured by mortgage of immoveable
property or by hypothecation or pledge of moveable property, or to any
beneficial interest in moveable property
▪ not in the possession, either actual or constructive, of the claimant,
▪ which the Civil Courts recognize as affording grounds for relief,
▪ whether such debt or beneficial interest be existent, accruing, conditional or
contingent
With respect to gaming, actionable claim means a claim of winning which is
contingent in nature on the result of the game being played, which the
company has to honour.
ACTIONABLE CLAIM
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ACTIONABLE CLAIM
(52) ―goods means every kind of movable property other than money and
securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed before
supply or under a contract of supply;
SCHEDULE III
ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A
SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
6. Actionable claims, other than lottery, betting and gambling.
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GAMESKRAFT – KARNATAKA HC
 Company provides online gaming experience, main game played is Rummy
which brought 96% of the revenue
 Customer could deposit any amount in their wallet and use it as per their
desire or withdraw the money from it.
 Amount used by the player was considered as income and GST was paid
 If the amount was below 200, consolidated invoice was issued at the end of
the day
 DGGI Bangalore booked a case demanding GST of Rs. 21,000 Crores on the
total value deposited by customers
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Judgement
 Distinct difference between games of skill and games of chance, rummy
being a game of skill
 Section 2(17) of the CGST Act recognises even wagering contracts as included
in the term business, but that in itself would not mean that lottery, betting
and gambling are the same as games of skill
 Terms “lottery, betting and gambling” do not include games of skill hence it
would be termed as an actionable claim and therefore is out of the
purview of ‘Supply’ and not taxable.
 Game of Skill whether played WITH OR WITHOUT stakes is not gambling
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Judgement
 Mixed game of chance and skill is gambling if it is substantially a game of
chance and vice versa
 Rummy is a Game of Skill
 Doesn’t make any difference if the game is played offline or online
 SCN was quashed as it was illegal, arbitrary and without jurisdiction or
authority of law
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LAW AMENDMENT GST RATE VALUATION DEDUCTION
• GST law will be
amended to include
online gaming,
horse racing and
Casinos in schedule
III as taxable
actionable claims
• All three namely
Casino, Horse
Racing and Online
gaming to be taxed
at the uniform rate
of 28%.
• Value of chips in
casinos
• Full value of the bets
in Horse Racing
• Full value of the bets
placed in the case of
Online Gaming
• No deduction
towards the winning
amounts that they
give back to the
players
GAMING INDUSTRY - DECISIONS
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GST Rate has ALWAYS been
28%, its not something new
that we have done.
Taxable value has always been
the face value that the
customer pays for playing
these games.
Old cases will go on and the
Govt will fight those cases.
Basically, the changes
described above are only
‘Clarificatory’
GAMING GAMED ?
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GAMING – WHY THE NOISE
Why is the Industry making so much noise
 Valuation – industry margin is 20% then why tax 100% ?
 Retrospective – if law is being amended now then why tax retro ?
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INTEREST - WRONG IGST ITC (192)
Q. A person wrongly availed ITC of IGST Rs. 1,00,000 in 2017-18 which he wants to
now reverse, since 2017-18 he has always maintained ITC balance in his ECL of
CGST and SGST of Rs. 90k and IGST balance of 20k. How to calculate interest?
A. In above, scenario, person will not be required to pay any interest because the
amount of ITC available in ECL, under any of the heads of IGST, CGST or SGST,
can be utilized for payment of IGST.
Q. Whether the credit of compensation cess available in ECL shall be taken into
account for interest calculation in cases of wrong availment of C+S+I ITC?
A. No, Cess is not allowed to be utilized for payment of C or S or I
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ITC MISMATCH – GSTR 3B-2A (193)
Circular 183 was for period July 2017 to March 2019, circular 193 extends it to a
further period from April 2019 to December 2021 but with certain conditions as
under:
 From 1.04.2019 to 8.10.2019 – Circular 183 mechanism will apply as it is.
 From 9.10.2019 to 31.12.2019 – Certificate as mandated by 183 will be allowed
however only upto 120% of the ITC reflecting in GSTR 2A
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ITC MISMATCH – GSTR 3B-2A (193)
 Working will have to be done to match ITC availed in GSTR 3B with GSTR
2A/2B.
 Certificates given either from the vendor or a CA cannot exceed the
percentile limit, said limit has to be seen in totality and not GSTIN wise
 From 1.01.2022, ITC will be allowed as per GSTR 2B only
 Benefit of this circular will be available only for ongoing proceedings like
assessments, audit, adjudication, appeal BUT not for completed proceedings
where the taxpayer has paid the differential and closed the matter.
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WHETHER OEM IS REQUIRED TO PAY GST
ON WARRANTY PARTS REPLACEMENT ?
No, because supply of original goods
includes the consideration for warranty.
Additional consideration if charged would
be liable to GST
WHETHER DISTRIBUTOR IS REQUIRED TO
PAY GST ON WARRANTY WORKS?
No, because dealer doesn’t charge any
consideration
WHETHER OEM IS REQUIRED TO
REVERSE ITC ON WARRANTY PARTS?
ITC is not required to be reversed, because
there is no exempt supply involved.
WHETHER DEALER IS REQUIRED TO PAY
GST ON REPLACEMENT OF PARTS BY OEM
Yes, if he uses parts from his inventory, he has
to raise a tax invoice to the OEM and due GST
has to be discharged. Not otherwise
WARRANTY REPLACEMENTS (195)
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ARE REPAIR SERVICES PROVIDED BY
DEALER UNDER WARRANTY TAXABLE?
Yes, the OEM is the recipient of service and
dealer has to raise invoice to him and pay
GST. OEM would be eligible for ITC.
IS EXTENDED WARRANTY SOLD ANYTIME AFTER SALE OF ORIGINAL GOODS TAXABLE, IF SO AT WHAT
RATE?
If extended warranty is sold by the OEM AFTER the original supply, then the same would be taxed
separately depending on the fact whether it is warranty for goods or service or both
IS EXTENDED WARRANTY SOLD AT THE
TIME OF SALE OF ORIGINAL GOODS
TAXABLE, IF SO AT WHAT RATE?
If extended warranty is sold by the OEM at the
time of original supply, then the consideration
becomes part of the value of the goods, GST is
payable at the rate applicable to goods
WARRANTY REPLACEMENTS (195)
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SHARES HELD BY HOLDING CO (196)
Q. Whether the activity of holding shares by a holding company of the
subsidiary company will be treated as a supply of service and whether the
same will be taxable?
A. Securities are considered as neither goods nor service, accordingly shares in
subsidiary company held by holding company would also be considered as
neither goods nor service. It cannot be said that a service is being provided by
the holding company to the subsidiary company, solely on the basis that
there is a SAC entry ‘997171’ in the scheme of classification of services
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REFUND RELATED ISSUES (197)
 Refunds of ITC shall be restricted to ITC as per those invoices which are
reflected in GSTR 2B for period on or after 1.01.2022.
 In case any refund for the period discussed above has been processed basis
GSTR 2A, the same shall not be reopened by the department.
 It is clarified that “Value of export” to be included in “adjusted total turnover”
for Refund will be lower of following two:
o FOB value declared in Shipping Bill or Bill of Export
o Value declared in Tax Invoice
 So, now it is clear that the value of export included in the numerator and
denominator for the purpose of Refund calculation shall be same
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REFUND RELATED ISSUES (197)
 In cases where goods were exported beyond 3 months of the invoice or
where export payment in foreign currency are received beyond the
prescribed period under rule 96A the benefit of zero-rated supplies cannot
be denied to the exporters. Accordingly, it is clarified that in such cases, the
said exporters would be entitled to refund of unutilized ITC or payment of
IGST on output.
 Refund Application in such cases would have to be filed in “Excess Payment
of Tax” in RFD 01 form. Till the facility is made available on GSTN, refund may
be filed in “Any Other” Category
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E-INVOICING TO GOVT DEPT (198)
Q. Whether e-invoicing is applicable for supplies made by an e-invoice eligible
taxpayer, to Government Departments or PSUs which are registered solely
for the purpose of deduction of TCS?
A. Yes, Govt depts and PSU registered solely for TCS purposes are to be treated
as registered persons under GST, accordingly, e-invoice eligible taxpayers
making supplies to such govt depts are required to issue E-Invoice to them.
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CROSS CHARGE – ISD (199)
Q. Whether Head Office (HO) can avail the ITC in respect of common expenses
procured from a third party which are attributable to both HO and/or BOs
(Branch Office)?
A. Yes
Q. Whether HO can issue tax invoices to the BO for the said input services and
the BOs can then avail the ITC for the same OR whether is it mandatory for
the HO to follow ISD mechanism?
A. It is ideal to follow ISD mechanism but currently it is not mandatory and so
HO can cross charge and issue tax invoice.
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Cross charge for internally generated services where recipient is eligible for FULL ITC
Q. Whether the HO is mandatorily required to issue invoice to BOs for such internally
generated services?
A. Yes and No Both.
Q. How to Value cross charge when full input tax credit is available to the concerned BOs.?
A. The value of supply of services made between distinct persons needs to be determined as
per rule 28. The value of supply between distinct persons shall be the open market value of
such supply. Further the rule provides that where the recipient is eligible for full ITC, the
value declared in the invoice shall be deemed to be the open market value of the services.
Accordingly, the value declared in the invoice by HO shall be deemed to be open market
value of such services. Hence inclusion of employee cost will not make any difference. If no
invoice is issued, it would be deemed that the that open market value is Nil
CROSS CHARGE – ISD (199)
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GST COUNCIL DECISION – ISD
Decision of the Council on ISD
 Amendment will be made in GST law to make ISD mechanism mandatory prospectively
for distribution of ITC of such third party services.
 Cross Charge for Internally generated services shall continue, but employee salary cost will
not form part of the taxable value.
 Which services then would need cross charge – examples ?
 Is cross charge still relevant ?
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TRADE
FACILITATION

 Amendments in law will be notified by 1.08.2022
 Process of selection of members will start immediately
thereafter
 Intent is to being functioning of Tribunals within next 6
months
 Almost every state will have at least 2 State benches.
Number of benches will be increased in phase manner.
 30% Pre-deposit ???
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TRIBUNALS

ANNUAL RETURNS FOR FY 2022-23
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 Relaxations provided in FY 2021-22 in respect of various tables of GSTR-9 & 9C
will be continued for FY 2022-23 also.
 Further, taxpayers having aggregate annual turnover up to 2 crores would
be exempt from filing of FORM GSTR-9/9A for FY 2022-23 also.

MANUAL FILING OF APPEALS
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 Special procedure to be provided to enable manual filing of appeal against
the orders passed by proper officers in respect of TRAN-1/ TRAN-2 claims of
the registered persons, filed in pursuance of the directions of Hon’ble
Supreme Court in case of the Union of India v/s Filco Trade Centre Pvt. Ltd.
 Rule 108(1) and rule 109(1) of CGST Rules, 2017 to be amended to provide
for manual filing of appeal under certain specified circumstances.
 Majority of the adjudication orders being issued by the Central GST dept are
manual in nature, hence the taxpayers are forced to file appeals manually
and they are being accepted by the department.

AMNESTY SCHEME EXTENDED
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 Amnesty schemes notified vide notifications dated 31.03.2023 regarding non-
filers of GSTR-4, GSTR-9, 9C & GSTR-10 returns, revocation of cancellation of
registration and deemed withdrawal of assessment orders issued under
Section 62 of CGST Act, 2017, will be extended till 31.08.2023.
 Notifications No. 24/2023-CGST, 25/2023-CGST and 26/2023-CGST dated
17.07.2023 have been issued in this regard

EWAY BILL FOR GOLD …
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 Rules will be amended to provide for generation of e-way bills for Inter State
and intra-State movement of gold, silver and precious stones.
 Once the proposed rules are notified, the requirement for e-way bill will be
mandatory for this sector.
 We hope that the monetary limits are kept high so that small taxpayers are
not affected, secondly movement within one district must be kept outside
the purview of e-way bills, at least for this sector.

REGISTRATION PROCESS
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Following changes will be made in rules to strengthen the registration process:
 Details of bank account, in name and PAN of the registered person, to be furnished
within 30 days of grant of registration or before filing of GSTR-1 whichever is earlier.
 System-based suspension of the registration in respect of such registered persons who
do not furnish the details of valid bank account within the time period prescribed.
 Provide for automatic restoration of such system-based suspension upon furnishing of
valid Bank account details.
 Where a registered person has not furnished details of a valid bank account, said person
will not be allowed to furnish GSTR-1.
 Physical presence of the applicant during verification of business premises will not be
required.
 Physical verification in high-risk cases even where Aadhaar has been authenticated.

RECOVERY OF OUTPUT TAX
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 Rule 88C was inserted with effect from 26.12.2022 for system-based
intimation liability as per GSTR 1 was more then GSTR 3B vide form GST DRC-
01B
 The Council has now recommended insertion of Rule 142B and FORM GST
DRC-01D to provide for manner of recovery of the tax and interest in
respect of the amount intimated under rule 88C which has not been paid
and for which no satisfactory explanation has been furnished by the
registered person.

RECOVERY OF 3B vs 2B DIFF
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 Just like 88C is for Output supply mismatch, Rule 88D would be introduced
to provide for system-based intimation in respect of the excess availment of
ITC in GSTR-3B vs GSTR-2B above a certain threshold, along with the
procedure of auto-compliance, to explain the reasons for the said difference.
 FORM DRC-01C to be inserted, along with an amendment in rule 59(6) of
CGST Rules, 2017.
 This will help in reducing ITC mismatches and misuse of ITC facility in GST.

INFORMATION SHARING
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 In the recent budget, section 158A was introduced w.e.f 1.04.2023 which
provides for consent based sharing of information with such systems as may
be notified. If the taxpayer gives consent, following information may be
shared:
 GST registration details as well as details furnished in the return filed
under section 39 (GSTR 3B and the likes) or under section 44 (Annual
Return)
 Details furnished in GSTR 1 / IFF, E-invoice portal and E-way bill
 such other details as may be prescribed.

INFORMATION SHARING
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 Consent will be taken from the taxpayer before sharing any such information
as under:
 From Supplier in respect of the information discussed above
 Recipient in respect of details with respect to GSRT 1 and E-way bill ad
well as E-invoice data ONLY if such details include identity information of
the recipient. Else it would be shared without consent.
 Now rules in this regards would be notified.
 Account Aggregator with whom such information will be shared would also
be notified

OTHER DECISIONS
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 Issuance of notice in GSTR 3A for their failure to furnish Annual Return in
GSTR-9 or 9A by due date.
 Value of supply of goods from Duty Free Shops at arrival terminal in
international airports to the incoming passengers to be included in the value
of exempt supplies for the purpose of reversal of input tax credit.

REALITY TODAY
54
Registration Trend (Upto June 22)
5,200,000
8,600,000
13,800,000
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
Migrated New Registrations Total Registrations
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REALITY TODAY
51
Rising Avg Monthly Gross GST Collection
52
0.80
0.98
1.02
0.95
1.23
1.51
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
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▪ Ghatak / Unit/Asst Comm
▪ Range/Circle – Dy Comm
▪ Division – Jt Commissioner
▪ Enforcement
▪ Audit
▪ Corporate / GR Cell
▪ Range Office
▪ Division Office
▪ Preventive
▪ Audit
Who administered Old laws ?
▪ Pan India Jurisdiction
for Excise and Service
Tax matters
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▪ Ghatak / Unit/Asst Comm
▪ Range/Circle – Dy Comm
▪ Division – Jt Commissioner
▪ Enforcement
▪ Audit
▪ Corporate / GR Cell
▪ Range Office
▪ Division Office
▪ Preventive
▪ Audit
Who administers GST ?
▪ Pan India Jurisdiction
for GST matters
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CROSS JURISDICTION
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COURTS REDEFINING SETTLED POSITIONS
AIRTEL
DHARMENDRA
JANI
VKC NORTHERN
OPERATING
SAFARI
RETREAT
MOHIT
MINERAL
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GST PROMISE - FUTURE ?
India is going through its biggest phase of Financial Transition and
GST is at its centre.
We as CAs have the best seat in the house !!!
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20% Taxpayers pay 87% of GST
80% Taxpayers pay 13% of GST
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PROMISE FUTURE ?
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N J JAIN & ASSOCIATES
N J Jain & Associates
B 1301 - 1305, Ratnaakar Nine Square, Opp. ITC Narmada Nr Keshavbaug Party Plot,
Satellite, Ahmedabad, Gujarat 380015
+91 79 400 22 628/29/30 Web: www.njjain.com //fb.me/njjainandassociates info@niteshjain.co.in
Nitesh Jain
Managing Partner
Praveen Maheshwari
Partner (GST - Excise)
Jay Dalwadi
Partner (GST - Service Tax)
Gaurav Khetan
Partner (GST - VAT)

Recent Changes - 50th GST Council Meet

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