45th GST Council Meeting held on 17th September 2021 has made crucial recommendations which will have significant impact on the taxpayer. As a consultant, it becomes necessary to be aware of these changes.
Here is a snapshot of important recommendations:
- The concessional rate for Covid 19 related drugs shall continue to remain in force till 31st December 2021. (Refer Clause A of Press Release)
- The GST Rate applicable on cartons, boxes, bags, packing containers of paper etc. has been increased from 12% to 18%. (Effective from 01.10.2021)
- The GST Rate applicable on railway parts, locomotive and other goods in Chapter 86 increased 12% to 18%. (Effective from 01.10.2021)
- Purchase of Mentha Oil from Unregistered dealer is now covered under Reverse Charge Mechanism. This would mean that if your concern buys mentha oil from an unregistered person, the concern would be liable to pay tax under RCM and claim ITC.
- Skill Training for which Government bears 75% or more of the expenditure has been exempted from GST.
- E-commerce operators have been made liable to pay tax on 1. Transportation of passengers provided through them 2. Restaurant services provided through them.
- Ice cream parlor not to be treated as restaurant, hence 18% GST shall be charged on the ice-cream parlors.
- Services by cloud kitchen/central kitchen to be covered under restaurant services chargeable at 5% GST.
- Where the turnover in preceding financial year is less than Rs. 5 Crores, Form ITC -04 (Job work Return) shall be filed on annual basis and in other cases where turnover exceeds Rs. 5 crores, Form ITC-04 shall be filed once in six months.
- No Interest shall be charged on any ineligible ITC (Motor Car, building etc.) availed but not utilized. 18% interest shall be charged only where ineligible ITC has been availed and utilized by the taxpayer.
- Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred to other GSTINs issued on the same PAN. For Example, where a taxpayer registered in state of Himachal Pradesh and Punjab has excess cash ledger balance in Punjab can now transfer the same to Himachal Pradesh.
- Government shall be issuing circulars clarifying the scope of Intermediary services vis-à-vis Export of Services. The entities incorporated under separate law shall not be barred under the concept of “merely establishment of distinct person” for the purposes of export of services.
- In case of issuance of debit note, the date for the purposes of claim of Input Tax Credit shall be worked out based upon the date of debit note instead of date of actual tax invoice.
- There is no need to carry physical copy of tax invoice for transportation where invoice has been generated through e-invoicing portal.
- Only those goods which are actually subjected to export duty will be covered under the restriction imposed for claim of refund of accumulated ITC.
- Aadhar authentication made mandatory for claim of refund or for filing of application for revocation of cancellation.
- Late fees for delayed filing of GSTR 1 shall be auto populated in GSTR 3B
- With effect from 01.01.2022, no registered person shall be allowed to file GSTR 1 if he has not furnished GSTR 3B for the preceding month.
- Input Tax Credit can now be availed only based upon what is reflected in GSTR 2B. GSTR 2A and concept of excess claim up to 5% of credit reflected in GSTR 2A as per Rule 36(4) has been withdrawn.
Please note that the above and the press release is merely the recommendations of the GST Council. These shall come into force only once the notification/circulars are issued by the Government of India through Gazette Notification. Unitax shall be issuing detailed blog on each recommendation made by the council. To remain updated, kindly register at Unitax.in. Download Press Release here.