37th GST COUNCIL DECISIONS ON GST RATES ON GOODS
The Goods and Services Tax Act, 2017 came into force
in India with effect from 1.7.2017.
The GST Council in its 37th meeting held at Goa has
decided and taken the following decisions:
PRESS RELEASE
ON GST RATE
ON GOODS AS RECOMMENDED BY THE
GST
COUNCIL IN ITS 37th MEETING HELD
ON 20.09.2019
GST Council in the 37th meeting held on 20.09.2019 at Goa took the following decisions in respect to
rates relating to goods.
I. GST rates reduction,
-
a) 18% to 12% on parts of Slide Fasteners
b) 18% to 5% on Marine Fuel 0.5% (FO)
c) 12%
to 5% on Wet Grinders
(consisting stone as
a grinder)
d) 5% to
Nil on:-
(i) Dried tamarind
(ii) Plates
and cups made up of
leaves/ flowers/bark
e) 3% to 0.25% on cut and polished
semi- precious stones
f) Applicable rate to 5% on specified goods for petroleum operations undertaken under
Hydrocarbon Exploration Licensing Policy (HELP)
g) Exemptions
from GST/IGST on:-
(i) imports of specified defence goods not being manufactured indigenously (upto
2024)
(ii) supply of goods
and services
to
FIFA and
other specified
persons for organizing the Under-17 Women’s
Football World Cup in India.
(iii) supply of goods and services to Food and Agriculture
Organisation (FAO) for
specified projects
in India.
II. GST rates have been recommended to
be increased from, -
a) 5% to 12% on goods, falling under chapter 86 of tariff like railway wagons, coaches,
rolling stock (without refund of accumulated ITC). This is to address the concern of ITC
accumulation with suppliers
of these goods.
b) 18%
to 28% +12% compensation cess
on caffeinated Beverages
III. Measures for Export Promotion
a) Exemption
from GST/IGST:-
(i) at
the
time of import on Silver/Platinum by specified
nominated agencies
(ii) supply of Silver/Platinum by specified nominated agency to exporters for exports of
Jewellery,
b) Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible
for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST
to Jewellery exporters.
IV. 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%)
V. GST concession in certain cases for
specific period: -
a) Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability
of fishmeal in view of the interpretational
issues. However, any tax collected
for
this period shall be required to be deposited.
b) 12%
GST 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.
VI. Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petrol
and
length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1% for petrol and 3% for diesel vehicle. Council recommended same compensation cess rate for vehicles having
these specifications (length and engine
capacity) but designed for carrying more than 10 persons but upto 13 persons. (Presently these
vehicles attract
compensation cess at the rate of 15%)
VII. Other miscellaneous Changes:
· Aerated
drink manufacturers
shall be excluded from composition scheme.
· Option to pay GST at the rate of 18% on transaction value at the time of disposal of
specified goods for petroleum operations (on which concessional GST rate of 5% was
paid at the time of original supply) provided that the goods are certified by Directorate General of Hydrocarbons (DGH) as
non-serviceable.
· Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)
· Prescribing modalities for allowing concessions on spare parts imported temporarily
by foreign airlines for repair of their aircraft, while in India in transit in terms of the
Chicago Convention on Civil Aviation.
· Certain other changes of technical nature for the sake of clarity in application of
notification.
VIII. Clarifications
as regards
applicability of
GST rate in respect of certain goods
recommended by
GST
Council which inter-alia includes:
a) Mere
heating of leguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or
addition of any other ingredients
(salt, oil etc.) would be classified under HS code 0713.
b) All “mechanical
sprayers” falling under
HS
Code 8424 would attract 12% GST.
c) 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.
d) Exclusive parts and accessories suitable for use solely or principally with a medical
device (falling
under headings 9018, 9019, 9021 or 9022) would fall in respective
headings and attract GST at the concessional rate of 12%.
e) Almond
milk is classifiable under
HS
code 22029990 and attracts
GST rate of 18%.
f)
Imported
stores for Navy would
be entitled to exemption from IGST.
The rate changes shall be made effective with
effect from 1st October, 2019.
[This note presents the decision of the GST Council in simple language for ease of
understanding, which would
be given effect to through Gazette notifications/circulars,
which shall have force of law.]
37th GST COUNCIL DECISIONS ON GST RATES ON SERVICES
PRESS RELEASE
ON GST RATE ON SERVICES AS RECOMMENDED BY THE
GST COUNCIL IN ITS 37th
MEETING
HELD ON 20th SEPTEMBER,
2019
GST Council in the 37th meeting held on 20th September, 2019 at Goa took following decisions relating to changes
in GST rates, ITC eligibility
criteria, exemptions and
clarifications on
connected issues.
(A) EXEMPTIONS / CHANGES IN
GST RATES / ITC
ELIGIBILITY
CRITERIA:
Rate reduction
sector wise: Hospitality
and
tourism:
1. To reduce the
rate of GST on hotel
accommodation service as below: -
Transaction
Value per
Unit (Rs) per day
|
GST
|
Rs
1000 and less
|
Nil
|
Rs
1001 to Rs 7500
|
12%
|
Rs
7501 and more
|
18%
|
2. To reduce rate of GST 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:
3. To reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds.
4. To reduce rate of GST from 18% to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body
building which would remain at
18%.
Exemption sector wise:
Warehousing:
5. To exempt prospectively services by way of storage or warehousing
of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as
cotton, flax, jute
etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice,
coffee and
tea.
Transportation:
6. To increase the validity of conditional exemption of GST on export freight by air or sea by another year, i.e.
till
30.09.2020.
Insurance:
7. To exempt “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal
Government.
8. To exempt services of life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under
Ministry of Home Affairs) Group Insurance
Funds to their members under
the respective Group Insurance Schemes of these
Central Armed Paramilitary
forces.
Export
promotion:
9. 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.
10. To issue a notification under Section 13(13) of IGST Act notifying the place of supply of
specified R&D services (such as Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease, Evaluation of biological activity
of
novel chemical/ biological entities in in-vitro assays,
Drug metabolism and
pharmacokinetics of
new chemical entities, Safety Assessment/
Toxicology, Stability Studies, Bio Equivalence and Bio Availability
Studies, Clinical
trials,
Bio analytical studies) provided by Indian pharma companies to foreign service
recipients, as the place of effective
use and
enjoyment of
a service i.e. location
of the service recipient.
11. To clarify that the place of supply of chip design software R&D
services provided by Indian companies to foreign clients by using sample test kits in India is the location of the service recipient and section 13(3)(a) of IGST Act, 2017 is not applicable for determining the place of supply in such cases.
Miscellaneous
12. To allow the registered authors an option to pay GST on royalty charged from publishers under
forward charge and observe
regular GST compliance.
13. To notify grant of liquor licence by State Governments against payment of license fee as a
“no
supply” to remove implementational ambiguity
on the subject.
14. To exempt
services
related to FIFA
Under-17 Women's
World Cup 2020 similar
to existing exemption given to FIFA
U17 World Cup 2017.
(B) RATIONALIZATION/
TRADE FACILITATION
MEASURES:
15. To allow payment of GST on securities lending
service under reverse charge mechanism (RCM) at the merit rate of 18% and to clarify that GST on securities
lending service for
period prior to RCM period shall be paid on forward charge basis. IGST shall be payable
on supply of these services and in cases where CGST/SGST/UTGST have been paid, such
taxpayers will not be required to pay tax again.
16. To allow RCM to suppliers paying GST @ 5% on renting of vehicles, from registered
person other than body corporate (LLP, proprietorship) when services provided to body corporate entities.
(C) CLARIFICATIONS:
17. To clarify the scope of the entry ‘services of exploration, mining or drilling of petroleum
crude or natural
gas or both”.
18. To clarify taxability of Passenger Service Fee (PSF) and User Development Fee (UDF)
levied by airport
operators.
Note: It is proposed to issue notifications giving effect to these recommendations of the Council on
1st October, 2019.
[This note presents the decision of the GST Council in simple language for easy understanding
which would be given effect to through Gazette notifications/ circulars
which shall have force of
law.]
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