Recommendation of 28th Meeting of GST council
As you are aware that GST council is a group of sate and central finance ministry recommending major amendments is GST laws and all amendments in GST laws are have to be in line with these recommendations. On 21st July 2018 it held its 28th meeting and recommended as detailed below:
- Upper limit of turnover for opting for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crore. Henceforth, supplies having turnover upto 1.5 crore can apply for composition scheme and existing suppliers can opt for composition scheme from next financial year.
- Composition dealers to be allowed to supply services (other than restaurant services), for upto a value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 lakhs, whichever is higher. Thus, supplies of any service upto Rs 5 lakh or 10% of turnover is allowed from the day notification to come.
Levy of GST on reverse charge mechanism:
Levy of GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to:
- only specified goods
- in case of certain notified classes of registered persons,
- on the recommendations of the GST Council.
Thus, universal application of section 9(4) is now removed.
No tax is payable on following supplies:
- 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;
- Supply of warehoused goods to any person before clearance for home consumption; and
- Supply of goods in case of high sea sales.
Now Input Tax Credit (ITC) is made available in case of following supplies:
- Most of the activities or transactions specified in Schedule III;
- Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft;
- Motor vehicles for transportation of money for or by a banking company or financial institution;
- Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
- Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.
Reversal of ITC in case supplier fails to pay amount due within 180 days:
The input tax credit availed by the recipient will be reversed, but liability to pay interest is being done away with.
Consolidated credit / debit notes:
Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year
Export of services:
Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI.
GST rates reduction on items:
- 28% to 18%
- Paints and varnishes (including enamels and lacquers)
- Glaziers’ putty, grafting putty, resin cements
- Refrigerators, freezers and other refrigerating or freezing equipment including water cooler, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.
- Washing machines.
- Lithium-ion batteries
- Vacuum cleaners
- Domestic electrical appliances such as food grinders and mixers & food or vegetable juice extractor, shaver, hair clippers etc
- Storage water heaters and immersion heaters, hair dryers, hand dryers, electric smoothing irons etc
- Televisions upto the size of 68 cm
- Special purpose motor vehicles. e.g., crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries
- Works trucks [self-propelled, not fitted with lifting or handling equipment] of the type used in factories, warehouses, dock areas or airports for short transport of goods.
- Trailers and semi-trailers.
- Miscellaneous articles such as scent sprays and similar toilet sprays, powder-puffs and pads for the application of cosmetics or toilet preparations.
- 28% to 12%
- Fuel Cell Vehicle. Further, Compensation cess shall also be exempted on fuel cell vehicle.
- Refund of accumulated credit on account of inverted duty structure to fabric manufacturers:
Fabrics attract GST at the rate of 5% subject to the condition that refund of accumulated ITC on account of inversion will not be allowed. However, considering the difficulty faced by the Fabric sector on account of this condition, the GST Council has recommended for allowing refund to fabrics on account of inverted duty structure. The refund of accumulated ITC shall be allowed only with the prospective effect on the purchases made after the notification is issued.
III. GST rates have been recommended to be brought down from,-
- 18%12%/5% to Nil:
- Stone/Marble/Wood Deities
- Rakhi [other than that of precious or semi-precious material of chapter 71]
- Sanitary Napkins,
- Coir pith compost
- Sal Leaves siali leaves and their products and Sabai Rope
- PhoolBhariJhadoo [Raw material for Jhadoo]
- Khali dona.
- Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd [SPMCIL] to Ministry of Finance.
- 12% to 5%:
- Chenille fabrics and other fabrics under heading 5801
- Handloom dari
- Phosphoric acid (fertilizer grade only).
- Knitted cap/topi having retail sale value not exceeding Rs 1000
- 18% to 12%:
- Bamboo flooring
- Brass Kerosene Pressure Stove.
- Hand Operated Rubber Roller
- Zip and Slide Fasteners
- 18% to 5%:
- Ethanol for sale to Oil Marketing Companies for blending with fuel
- Solid bio fuel pellets
- Rate change made in respect of footwear
- 5% GST is being extended to footwear having a retail sale price up to Rs. 1000 per pair
- Footwear having a retail sale price exceeding Rs. 1000 per pair will continue to attract 18%