20 February 2023

GST Council’s 49th Meeting – Highlights

The 49th meeting of the GST Council was held on 18 February 2023. Given below are the important recommendations of the Council.

  • GST Compensation to States – Government of India has decided to clear the entire pending balance GST compensation of INR 16982 crore for June 2022.
  • GST Appellate Tribunal – Recommendations of Group of Ministers (‘GoM’) on setting up of GST Appellate Tribunal have been accepted with certain amendments.
  • Revocation of cancellation of registration – The time limit for making an application for revocation of cancellation of registration is to be increased from 30 days to 90 days, further extendable for the period of up to 180 days. Also, an amnesty may be provided in the past cases, where registration has been cancelled on account of non-filing of the returns.
  • Late fee for Annual Return rationalised – The Council has recommended to reduce the late fees for delayed filing of the annual return in Form GSTR-9 for FY 2022-23 onwards for registered persons having aggregate turnover in a financial year upto INR 20 crore. Late fees for assessees having turnover upto INR 5 crore will be INR 50/day, while those having turnover from INR 5 crore to INR 20 crore would require to pay late fees of INR 100 per day. The maximum late fees would however be 0.04% of the turnover in the State or Union Territory.
  • Amnesty in respect of Form GSTR-4, Form GSTR-9 and Form GSTR-10 – The Council has recommended amnesty schemes in respect of pending returns in Form GSTR-4, Form GSTR-9 and Form GSTR-10 by way of conditional waiver/ reduction of late fee.
  • Assessment of non-filers – Time period for best judgement to be increased – The Council has recommended to amend Section 62 of the CGST Act, 2017 so as to increase the time period for filing of return for enabling deemed withdrawal of best judgment assessment order, from the present 30 days to 60 days, extendable by another 60 days, subject to conditions. An amnesty scheme for conditional deemed withdrawal of assessment orders in past cases has also been recommended.
  • Place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, recommended to be the location of the recipient of services. Section 13(9) of the IGST Act, 2017 has been recommended to be omitted.
  • Pan masala, gutka, etc. – Recommendations of GoM have been approved by the Council in order to improve revenue collection from commodities like pan masala, gutkha, and chewing tobacco.
    • The capacity-based levy will not be prescribed.
    • Exports will be permitted only against LUT with consequential refund of accumulated ITC.
    • Compensation cess to be changed from ad valorem to specific tax-based levy
  • GST rates reduced for ‘Rab’ and ‘pencil sharpeners’ – Rate of tax has been recommended to be reduced from present 18% to 5% (if sold prepackaged and labelled; nil if sold otherwise) in case of Rab and to 12% on pencil sharpeners.
  • No separate IGST recommended to be levied on tag-tracking device or data logger as already affixed on durable containers.
  • Exemption recommended for National Testing Agency, authority, board for conduct of entrance examination for admission to educational institutions
  • GST on the supply of specified services by Courts and Tribunals shall be payable by the specified recipients under reverse charge.

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