Recent Updates with All Notifications & Highlights on 28th GST Council Meeting

GST Update

This Presentation covers the GST changes/ observations/ press releases/ Tweet FAQs/ Sectoral FAQs released by CBEC since the last update on 21.07.2018. It supplements the  earlier GST Updates. This presentation is  based  on  CGST  Act/Rules/ Notifications.  Similar parallel  provisions in State Laws may be referred to as required

Notifications & Circulars

  • 9 Central Tax (Rate) notifications issued under CGST Act issued to give effect to the decisions of the GST council taken in its 28th meeting held on 21.07.2018.
  • Similar notifications issued under IGST/SGST/UTGST Acts.
  • 1  Compensation  Cess (Rate) Notification  and 1 Customs Notification on IGST exemption issued

GST Rate on various Services

Notification No.13/2018-CT (Rate) dated 26.07.20218 amends Notn. 11/2017-CT(Rate)

  • Specifies  rate   on   accommodation,   food   &   beverages services, multimodal transport services and supply of e- book services.
  • Clarifies the scope of Outdoor Catering
  • Rate of tax on accommodation service to be determined on the basis of actual value of service and not declared tariff.

Rate of GST on Accommodation, Food & Beverages services

  • The GST Council in its 28th meeting had taken the following decision
  • 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.
  • Entries against sr.no.7(i) of principal notification 11/2017-Central Tax (Rate) dated 28.6.2017 Substituted.  New entry with explanations added.
  • Explanation 1  inserted  in  the  entry  to  clarify  that  this    item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional.
  • Explanation 2  inserted  in  the  entry  to  clarify  that  this  item excludes the supplies covered under item 7 (v).
  • Explanation 3  inserted  to  clarify  that  the  “declared  tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.
  • Entry no.7(ia) inserted: Supply, of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms. – chargeable to tax @ 2.5% – provided credit of ITC used in making such supplies not taken
  • (b) in items (ii), (vi) and (viii) of Entry 7
  • (A) for  the  words  “declared  tariff”  wherever  they  occur,  the words “value of supply” shall be substituted;
  • (B) the Explanation shall be omitted
  • (This is in conformity with the GST council decision that the tax rate applicable would be determined by transaction value and not declared tariff)
  • Entry no.7(v) substituted as under
  • Supply, by way of or as part of any service, of goods, being food or any other article  for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature.
  • (Greater clarity given to the term outdoor catering. The earlier entry  used  the  term  outdoor  catering.  This  term  has  been deleted from the new entry clarifies what it seeks to tax @ 9%)

Rate of GST on Multimodal Transport Services

  • The GST Council in its 21st meeting had recommended GST rate of 12% with full ITC under forward charge for composite supply of multimodal transportation.
  • Towards this end notification no.13/2018-Central 26.07.2018 issued.
  • Multimodal Transport of goods charged to tax @ CGST. Total 12%
  • Entry no.9(vi) substituted as under:
  • “(vi) Multimodal transportation of goods charged @ 6%

Explanation.-

(a) “multimodal transportation” means carriage of goods, by at least two different modes of transport from the place of acceptance of goods to the place of delivery of goods by a multimodal transporter;

(b) “mode of transport” means carriage of goods by road, air, rail, inland waterways or sea;

(c) “multimodal transporter” means a person who,-

(A) enters into a contract under which he undertakes to perform multimodal transportation against freight; and

(B) acts as principal, and not as an agent either of the consignor, or consignee or of the carrier participating in the multimodal transportation and who assumes responsibility for the performance of the said contract.

Rate of GST on supply of E-books where print version exists

The GST Council in its 21st meeting had recommended GST rate of 5% for supply of e-books where printed version of such book exists.

Entry at s.no.22 of Notfn 11/2017- CT(R) inserted as under

(i) Supply consisting only of e-book. (Rate of tax @ 2.5)

Explanation.- For the purposes of this notification, “ebooks” means an electronic version of a printed book (falling under tariff item 4901 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)) supplied online which can be read on a computer or a hand held device.

(ii) Telecommunications, broadcasting and information supply services other than (i) above. (Rate of tax @ 9%)

Exemption to certain Services

Notification  no.14/2018-Central  Tax  (Rate) dated 26.07.20218 amends notification  no.12/2017-Central Tax (Rate) dated 28.06.2017;

Gives Exemption from tax to the following services

1. Services by an old age home run by Central Government, State Government or by an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) to its residents (aged 60 years or more) against  consideration  up  to  twenty  five  thousand rupees per month per member, provided that the consideration charged is inclusive of charges for boarding, lodging and maintenance.

2. Services supplied by electricity distribution utilities by way of construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network up to the tube well of the farmer or agriculturalist for agricultural

3. Services by way of warehousing of minor forest produce.

4. Services by  Coal  Mines  Provident  Fund  Organisation  to persons governed by the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948)

5. Services by  National  Pension  System  (NPS)  Trust  to  its members against consideration in the form of administrative fee.

6. Services supplied by Central Government, State Government, Union territory to their undertakings or Public Sector Undertakings(PSUs) by way of guaranteeing the loans taken by such undertakings or PSUs from the financial institutions..

7. Services by  way  of  licensing,  registration  and  analysis  or testing of food samples supplied by the Food Safety and Standards Authority of India (FSSAI) to Food Business Operators.

8. Services by way of artificial insemination of livestock (other than horses).

9. Services supplied by a State Government to Excess Royalty Collection Contractor (ERCC) by way of assigning the right to collect royalty on behalf of the State Government on the mineral dispatched by the mining lease ho

Explanation.- “mining lease holder” means a person who has been granted mining lease, quarry lease or license or other mineral concession under the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), the rules made thereunder or the rules made by a State Government under sub-section (1) of section 15 of the Mines and Minerals (Development and Regulation) Act, 1957.

10. Services provided by an unincorporated body or a non-profit entity registered under any law for the time being in force, engaged in,-

(i) activities relating to the welfare of industrial or agricultural labour or farmers; or

  1. (ii) promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities and protection of environment, to its own members against consideration in the form of membership fee up to an amount of one thousand rupees (Rs. 1000/-) per member per year

Services under Reverse Change Mechanism

Notification 15/2018-Central Tax (Rate) dated 26.07.2018 amends notfn.13/2017-Central Tax (Rate) dated 28.06.2017. Seeks to prescribe payment of GST under reverse charge on the following services

  • Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs).
  • In such  cases  the  recipient  i.e.  A  banking  company  or  a  non- banking financial company, located in the taxable territory shall be liable to pay tax.

Notified Supplies as neither supply of good nor a service

Notification 16/2018-Central  Tax  (Rate)  dated  26.07.2018 amends notfn.14/2017-Central Tax (Rate) dated 28.06.2017

  • Seeks to notify that services by way of any activity in relation to a function entrusted to a municipality under Article 243W shall be treated neither as a supply of good nor a service.

Scope of term “Business” for govt supplies

Notification 17/2018-Central  Tax (Rate) dated 26.07.2018 issued.

  • Inserts following explanation in notification 11/2017-Central Tax (Rate) dated 28.6.2017 (against serial number 3, in column (3), in item (vi)), in exercise of powers conferred by Section 11(3) of CGST Act, 2017.
  • “Explanation. –  For  the  purposes of  this item,  the term ‘business’  shall   not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.”.
  • Significance of the explanation inserted.  As per Section 11(3), the Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section  (2),  insert  an  explanation  in  such  notification  or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.
  • Thus the explanation inserted on 26.07.2018 will be treated as if had always been part of the first notification.

GST Rate Changes on Goods

Notification 18/2018-Central Tax (Rate) dated 26.07.2018 issued

  • Gives effect to GST Council decision in its 21st meeting on rate of goods.

Goods included in 5% bracket

1. Ethyl alcohol supplied to Oil Marketing Companies for blending with motor spirit (petrol)”

2. Ecaussine and  other  calcareous  monumental  or  building stone  alabaster  [other  than  marble  and  travertine],  other than mirror polished stone which is ready to use”;

Goods included in 5% bracket

3. Fertilizer grade phosphoric acid.

4. coir pith compost put up in unit container and bearing a brand name

5. Coir mats, matting, floor covering  and handloom durries (Existing entry in S. No. 219, column (3), substituted

6. Biomass briquettes or solid bio fuel pellets (Existing entry in S. No. 264, column (3), substituted

7. Article of apparel and clothing accessories or cap/topi, knitted or crocheted, of sale value not exceeding Rs.1000 per piece”;

Goods included in 12% bracket

1. Bamboo flooring.

2. Brass Kerosene Pressure Stove.3. Hand operated rubber roller

4. Nozzles for drip irrigation equipment or nozzles for sprinklers”;

5. Fuel Cell Motor Vehicles

6. Slide fasteners

7. All goods of Tariff entry 9619 00 30, 9619 00 40, or 9619 00 90

Goods included in 18% bracket

1. Paints and varnishes (including enamels and lacquers) based on synthetic   polymers   or   chemically   modified   natural polymers, dispersed or dissolved in a non-aqueous medium; solutions as defined in Note 4 to this Chapter.

2. Paints and varnishes (including enamels and lacquers) based on synthetic   polymers   or   chemically   modified    natural polymers, dispersed or dissolved in an aqueous medium.

3. Other paints and varnishes (including enamels, lacquers and distempers); prepared water pigments of a kind used for finishing leather

Goods included in 18% bracket

4. Glaziers’ putty, grafting putty, resin cements, caulking compounds and other  mastics;  painters’  fillings;  non-  refractory  surfacing preparations for facades, indoor walls, floors, ceilings or the lik

5. Refrigerators,  freezers   and    other   refrigerating   or    freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 8415.

6. Calendering or other rolling machines, other than for metals or glass, and cylinders therefor [other than Hand operated rubber roller]

7. Household or laundry-type washing machines, including machines which both wash and dry”

Goods included in 18% bracket

8. Lithium-ion Batteries”

9. Vacuum cleaners

10. Electro-mechanical  domestic   appliances,   with   self-contained   electric motor,  other  than  vacuum  cleaners  of  heading  8508  [other  than  wet grinder consisting of stone as a grinder]

11. Shavers, hair clippers and  hair-removing  appliances, with self-contained electric motor.

12. Electric instantaneous or storage water heaters and immersion heaters; electric space  heating  apparatus  and  soil  heating  apparatus;  electro thermic  hairdressing  apparatus  (for  example,  hair  dryers,  hair  curlers, curling tong heaters) and hand dryers; electric smoothing irons; other electro-thermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading 8545”

Goods included in 18% bracket

13. Television set (including LCD or LED television) of screen size not exceeding 68 cm

14. Special purpose motor  vehicles,  other  than  those  principally designed  for  the  transport  of  persons  or  goods  (for  example, breakdown lorries, crane lorries, fire fighting vehicles, concrete- mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological unit)” ;

15. Works trucks, self-propelled, not  fitted  with  lifting  or  handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type  used  on  railway  station  platforms;  parts  of  the  foregoing vehicles” ;

Goods included in 18% bracket

16. Trailers and semi-trailers;  other  vehicles,  not mechanically propelled; parts thereof [other than Self-loading or self- unloading trailers for agricultural purposes, and Hand propelled vehicles (e. hand carts, rickshaws and the like); animal drawn vehicles]” ;

17. Parts of slide fasteners”;

18. Scent sprays and similar toilet sprays, and mounts and heads therefor; powder-puffs and pads for the application of cosmetics or toilet preparations”

GST Exemption to Certain Goods

 

Notification 19/2018-Central Tax (Rate) dated 26.07.2018 issued

Following Goods exempted from GST.

1. Sal leaves, siali leaves, sisal leaves, sabai grass”;

2. Vegetable  materials,  for manufacture of  jhadoo or broom sticks”

3. De-oiled rice br  Explanation: The exemption applies to de-oiled  rice  bran  falling  under  heading  2306  with  effect from 25th January, 2018”;

4. Deities made of stone, marble or wood

Following Goods exempted from GST.

5. Khali Dona; Goods made of sal leaves, siali leaves, sisal leaves, sabai grass, including sabai grass rope”;

6. Rupee notes or coins when sold to Reserve Bank of India or the Government of India”;

7. Coir pith compost other than those put up in unit container and, –

(a) bearing a registered brand name; or

(b) bearing  a  brand  name  on  which  an  actionable  claim  or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily, subject to the conditions as in the ANNEXURE I]”;

Following Goods exempted from GST.

8. Sanitary towels (pads) or sanitary napkins; tampons”;

9. Rakhi (other than those made of goods falling under Chapter 71)”.

Refune of ITC on Inverted Duty Structure

https://www.alerttax.in/wp-content/uploads/2018/08/notfctn-20-2018-cgst-rate-english.pdf

Notification  allows refund  of  ITC on account of  inverted rate structure on specified goods where ITC has been availed from 01.08.2018 onwards For  the  period  up  to  31.07.2018,  such  accumulated  ITC  shall lapse.

1. Woven fabrics of silk or of silk waste (5007)

2. Woven fabrics of wool or of animal hair (5111 to 5113)

3. Woven fabrics of cotton (5208 to 5212)

4. Woven fabrics of other vegetable textile fibres, paper yarn (5309 to 5311)

5. Woven fabrics of manmade textile materials (5407, 5408) Woven fabrics of manmade staple fibres (5512 to 5516)

6A  Knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials (5608)

6B  Corduroy fabrics (5801)

6C  Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)”(5806)

Concessional GST Rate under Section 11 to CGST Act.

 

Notification 21/2018-Central  Tax  dated  26.07.2018  issued.

  • Exemption notification issued under Section 11 of CGST Act.
  • Exempts specified  handicrafts  goods  from  tax  in  excess  of 2.5% & 6%

Exemption to Compensation Cess

  • Notification No. 2/2018-Compensation Cess (Rate) dated 26th July, 2018 amends Notn No. 01/2017-C Cess(Rate)
  • Following Goods exempted from Compensation Cess
S.No NotificationChapter (HSN)Goods
4A27Coal rejects supplied by a coal washery, arising out of coal on which compensationcess has been paid and no input tax creditthereof has not been availed by any person.
42B87Fuel Cell Motor Vehicles

IGST Exemption on import of Urea

Notification No. 55/2018 –Customs dt 26th July, 2018

  • Exemption from IGST above the “Pool issue price” of Urea, imported on Govt. account for direct agriculture use
  • “Pool Issue Price”- value at which Ministry of Chemical and Fertilizers/Department of Fertilizers  sells  urea,  falling  under tariff item 3102 10 00, to Fertilizer Marketing Entities (FMEs) on high sea sale basis

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Categories GST

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