GST COUNCIL DECISIONS TAKEN ON 21.7.2018 IN ITS 28TH GST COUNCIL MEETING
The Goods and Services Tax Act 2017
came into force with effect from 1.7.2017.
The 28th GST Council meeting held on 21.7.2018
had taken the certain decisions and the decisions taken by the Council in
respect of Services were as follows:
PRESS NOTE on GST rate on Services
GST Council in
the meeting held at New Delhi on 21.07.2018 took following
decisions relating to exemptions / changes in GST rates / ITC eligibility criteria, rationalization of rates /
exemptions and clarification on levy of GST on services. The decisions of the GST Council enclosed as annexure
has
been presented in simple language for ease of understanding
which
would be given effect to through
Gazette notifications/ circulars which
shall
have force of law.
2. It would be noted that multiple reliefs
from GST taxation
have been
provided to
following categories of services –
(i) Agriculture, farming and food
processing industry,
(ii) Education, training and skill
development,
(iii) Pension,
social security and old age support.
3. Hotel industry has been given major relief by
providing that the rate of tax on
accommodation service
shall be based on transaction value
instead of declared
tariff.
4. Services provided in sectors like banking, IT have been provided relief by exempting
services supplied by
an
establishment of a person in India to any establishment of that person outside India [related party].
5. As a
green initiative, GST on supply of e-books
has been
reduced
from 18 to 5%.
6. For
details of major decisions
on services, annexure to this
press note may be referred.
7. It
is
proposed
to
issue notifications
giving
effect to these
recommendations
of
the
Council with
effect from
27th July,
2018.
ANNEXURE - EXEMPTIONS / CHANGES IN GST RATES AND
SERVICES Sector –Farmers/ Agriculture/ Food Processing
1. Exempt services by way of
artificial insemination of
livestock (other than horses).
2. Exempt warehousing
of minor forest produce in line with exemptions provided
to the agricultural
produce.
3. Exempt
the
works of installation
and commissioning undertaken
by DISCOMS/
electricity distribution companies for extending electricity distribution network upto the tube well of the
farmer/ agriculturalist
for agricultural use.
4. Exempt services
provided by FSSAI to
food business operators.
Education/
Training/ Skill Development
5. Reduce rate of GST from 18% to 5% on supply only of e-books for which print version
exist.
Social Security/
Pension Security/ Senior
Citizens
6. Exempt services provided by
Coal
Mines
Provident
Fund Organisation
to
the
PF
subscribers
from the applicability of GST on the lines of EPFO.
7. Exempt supply of services by an old age home run by State / Central Government or by a body registered under 12AA of Income Tax Act) to its residents (aged 60 years or more) against consideration upto Rupees Twenty Five Thousand per month per member provided
consideration is inclusive of charges for
boarding, lodging and
maintenance.
8. Exempt GST
on the administrative fee collected
by
National Pension System Trust.
9. Exempt services provided by an unincorporated body or a non-profit entity registered
under any law for the time being in force, engaged in activities relating to the welfare of
industrial or agricultural labour or farmer; or for the promotion of trade, commerce, industry,
agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities
and
protection
of environment, to own
members against consideration
in the
form of membership fee up to an amount of
one
thousand rupees
per member per year.
Banking/ Finance/ Insurance
10. Exempt Reinsurance Services provided to specified Insurance Schemes such as Pradhan
Mantri Rashtriya Swasthya
Suraksha Mission (PMRSSM) (Ayushman Bharat), funded by
Government.
Government Services
11. Exempt services provided by Government to ERCC by way of assigning the right to
collect royalty,
DMFT
etc. from
the
mining lease holders.
12. Exempt the guarantees given by Central/State Government/UT administration to their
undertakings/PSUs.
Miscellaneous
13. Exempt GST on import
of
services
by Foreign Diplomatic
Missions/
UN
&
other
International Organizations
based
on reciprocity.
14. Exempt services supplied by an establishment of a person in India to any establishment of that person
outside India,
which are
treated as
establishments
of
distinct persons
in
accordance with Explanation I in section 8 of the IGST Act provided the place of supply is outside the taxable
territory of India
in accordance with
section 13 of IGST Act
15. Prescribe GST rate slabs on accommodation service based on transaction value instead of declared tariff which is
likely to
provide major relief
to the hotel industry.
16. Prescribe GST rate of 12% with full ITC under forward charge for composite supply of
multimodal
transportation.
17. Rationalize the notification entry prescribing reduced GST rate on composite supply of works contract received by
the Government or a local authority
in the course of their sovereign
functions.
18. Rationalize entry relating to composite supply of food and drinks
in restaurant, mess,
canteen, eating joints and such supplies to institutions (educational, office, factory, hospital) on contractual basis at GST rate of 5%; and making it
clear that the scope of outdoor catering under
7(v) is restricted
to supplies in case of outdoor/indoor functions
that are event based and
occasional in nature.
Clarifications
19. Supply of services provided by State and Central educational boards to students for conduct of examination will be clarified
to be exempt.
20. To clarify that the courses run by private ITIs for designated trades are exempt under
GST
whereas non-designated courses
are taxable.
21. To clarify that GST on premium paid by the Governments for implementing Pradhan
Mantri Rashtriya Swasthya Suraksha
Mission (PMRSSM) (Ayushman Bharat) is exempt from GST.
22. To provide clarification on applicability of Service Tax /
GST on services rendered by an Indian Architect- Consultant in relation to immovable property
located outside India to Indian Diplomatic Missions/Posts abroad.
23. To clarify to Auroville foundation that ‘maintenance’ paid by it to Aurovilians is not
liable
to GST.
24. To insert an explanation in notification No. 13/2017-Central Tax(Rate) to define the
term renting of
immovable property.
25. To clarify that certain services such as “deposit works(expenses for providing electric line/plant)” related
to distribution of electricity provided
by
DISCOM, attract GST.
Export / other trade facilitation measures
26. Extend the exemption granted on outward transportation of all goods by air and sea by
another one year i.e. upto 30th September,
2019 as relief
to the exporter of goods.
27. Place liability to pay GST on services provided by individual DSAs to banks/NBFCs
under reverse charge on the buying banks/NBFCs. However, services by non-individual NBFCs (corporate, partnership
firms) to banks/NBFCs would
continue under forward charge, as at present.
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PRESS NOTE DATED 21.7.2018
Recommendations made during the 28thmeeting of the GST Council
held in
New Delhi on 21st July, 2018
Amendments to the CGST Act, 2017, IGST Act, 2017, UTGST Act2017, and GST (Compensation to States) Act, 2017
1. The GST Council in its 28th meeting held today at New Delhi has recommended certain amendments in the
CGST Act, IGST Act, UTGST
Act and the
GST
(Compensation to States) Act.
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2.
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1.
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The major
recommendations are
as detailed below:
Upper limit of turnover
for opting for composition scheme
to be raised from Rs. 1
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crore to Rs.
1.5
crore. Present limit of turnover
can
now
be
raised
on
the
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recommendations of the Council.
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2.
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Composition dealers
to
be
allowed
to
supply
services
(other
than
restaurant
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services), for
upto
a
value
not
exceeding
10%
of
turnover
in
the
preceding
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financial year, or Rs. 5 lakhs,
whichever is higher.
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3.
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Levy of
GST
on
reverse
charge
mechanism
on
receipt
of
supplies
from
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unregistered suppliers, to be applicable to only specified goods in case of certain
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notified classes
of registered
persons,
on
the recommendations
of
the
GST
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Council.
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4.
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The threshold exemption limit for registration in the States
of Assam, Arunachal
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Pradesh, Himachal
Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased
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to Rs. 20 Lakhs from
Rs. 10 Lakhs.
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5.
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Taxpayers may opt for multiple registrations within a State/Union territory in
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respect of multiple
places of business located within
the
same
State/Union
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territory.
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6.
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Mandatory registration is required for only those e-commerce operators who are
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required to collect
tax at source.
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7.
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Registration to remain temporarily suspended while cancellation of registration is
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under process, so that the taxpayer is relieved of continued compliance under the
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law.
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8.
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The following transactions to be treated
as no supply (no tax payable) under
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Schedule III:
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a.
Supply of goods from a place in the non-taxable territory to another
place
in the non-taxable territory without
such goods entering
into India;
b.
Supply of warehoused goods
to any person before clearance for home consumption; and
c. Supply of goods in case of high sea sales.
9. Scope
of input tax credit is being widened, and it would now be made available
in respect of the following:
a.
Most of the
activities or transactions specified
in Schedule III;
b.
Motor vehicles for transportation of persons
having seating capacity of
more than thirteen (including driver), vessels and aircraft;
c. Motor
vehicles for transportation of money for or by a
banking company or financial institution;
d.
Services of general
insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft
on which credit is available; and
e. Goods
or services which
are obligatory for an employer to provide
to its employees, under any law for the
time
being in force.
10. In case the recipient fails to pay the due amount to the supplier within 180 days from
the date of issue of invoice, the input tax credit availed by the recipient will be reversed, but liability to pay interest
is being done away with.
11. Registered persons may issue consolidated credit/debit
notes in respect
of multiple
invoices issued in a Financial Year.
12.
Amount of pre-deposit
payable for filing of appeal before the Appellate
Authority and the Appellate Tribunal to be capped at Rs. 25 Crores and Rs. 50 Crores, respectively.
13. Commissioner to be empowered to extend the time limit for return of inputs and
capital sent on job work, upto a period
of one year and two years, respectively.
14. Supply
of services to qualify as exports, even if payment
is received in Indian
Rupees, where permitted
by the RBI.
15. Place of supply in case of job work of any treatment or process done on goods
temporarily imported into India and then exported without putting them to any
other use in India, to be outside India.
16. Recovery can be made
from
distinct persons,
even
if
present
in different
State/Union territories.
17. The order of cross-utilisation of input tax credit is being rationalised.
3. These
amendments will now be placed before
the Parliament and the legislature of State and Union territories with legislatures for carrying out the amendments
in the respective GST Acts.
.