Important Decisions Taken in the 50th GST Council Meeting

The 50th GST Council meeting, held recently, witnessed several significant decisions being taken to streamline and improve the Goods and Services Tax (GST) regime in India. These decisions aim to provide relief to taxpayers, address procedural concerns, and enhance compliance. Here are the key decisions made during the meeting:

1. Transporters Exempted from Annual GST Declaration: Transporters will no longer be required to file an annual declaration for paying GST under forward charge. This move aims to simplify the compliance process for transporters and reduce their administrative burden.

2. Reverse Charge Mechanism (RCM) Exemption for Services by Directors: Services supplied by a director of a company to the company in his private or personal capacity, such as renting immovable property, will no longer attract the reverse charge mechanism. This decision seeks to provide clarity and ensure that directors are not burdened with additional compliance requirements.

3. Extension of Special Procedure for Mismatch in ITC: The special procedure regarding the mismatch in Input Tax Credit (ITC) availed in GSTR-3B and GSTR-2A has been extended for two more years, covering the financial years 2019-20 and 2020-21. This extension provides relief to taxpayers who have been facing challenges in reconciling their ITC.

4. Amnesty Scheme Extension for Non-Filers: The amnesty schemes, which were introduced to address non-filing of returns (FORM GSTR-4, FORM GSTR-9, and FORM GSTR-10), have been extended until 31st August 2023. This extension allows non-filers to rectify their non-compliance without incurring additional penalties.

5. Simplification of Business Premises Verification: The requirement for physical verification of business premises in the presence of the applicant has been eliminated. This decision reduces the procedural burden on taxpayers and streamlines the verification process.

6. Enhanced Physical Verification in High-Risk Cases: In high-risk cases, where Aadhaar authentication has been done, physical verification of business premises will be conducted. This measure strengthens compliance measures and helps identify potential tax evasion cases.

7. System-Based Intimation for Excess ITC Availment: Taxpayers will receive system-based intimation regarding the excess availment of ITC in FORM GSTR-3B compared to the ITC available in FORM GSTR-2B. This decision aims to improve compliance and enable taxpayers to rectify any discrepancies promptly.

8. Revised Tax Rate for Food and Beverages in Cinema Halls: The supply of food and beverages in cinema halls will now be taxable at 5% under the GST regime. This revision brings clarity to the tax treatment of these services.

9. GST Rate for Cinema Tickets and Food/Beverages: If the sale of cinema tickets and the supply of food and beverages are clubbed together, the GST rate applicable to cinema tickets will apply. This decision simplifies the tax treatment and ensures uniformity in taxation.

10. GST Rate on Chips Purchased in Casinos: The value of chips purchased in casinos will attract a GST rate of 28%. This decision ensures that gambling activities are appropriately taxed under the GST regime.

11. GST Rate on Bets Placed in Online Gaming: The full value of bets placed in online gaming will be subject to a GST rate of 28%. This decision aims to bring online gaming activities under the purview of GST and promote tax compliance in this sector.

12. Establishment of GST Appellate Tribunal: The GST Appellate Tribunal will be established in a phased manner. This tribunal will serve as an appellate authority for hearing appeals against the orders passed by the Appellate Authorities or Revisional Authorities under GST.

13. Continuation of Relaxations for FY 2022-23: The relaxations provided in the financial year 2021-22 regarding various tables of FORM GSTR-9 and FORM GSTR-9C will be continued for the financial year 2022-23. This decision offers relief to taxpayers and simplifies the compliance process.

14. No GSTR-9 for Turnover up to 2 Crores: Taxpayers with a turnover of up to 2 crores will be exempted from filing the annual return (FORM GSTR-9). This decision reduces the compliance burden for small businesses and promotes ease of doing business.

15. Optional Mechanism for Input Services Distribution (ISD): The Input Services Distributor (ISD) mechanism will not be mandatory for the distribution of input tax credit of common input services procured from third parties to distinct persons. However, an amendment may be made in the GST law to make the ISD mechanism mandatory prospectively.

16. Clarity on Input Tax Credit Reversal in Warranty Cases: A detailed circular will be issued to provide clarity on the liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during the warranty period. This circular aims to address the confusion surrounding the treatment of input tax credit in warranty-related transactions.

17. Restriction of ITC Refund to GSTR-2B: The refund of accumulated input tax credit (ITC) will be restricted to the ITC appearing in FORM GSTR-2B. This decision ensures that refunds are based on the eligible ITC available to taxpayers.

18. Simplification of Tax Invoice for Supply of Services: In the case of the supply of taxable services by or through an e-commerce operator (ECO), the tax invoice will only include the name of the state, not the name and full address of the recipient. This decision simplifies the invoicing requirements for service providers.

These decisions taken during the 50th GST Council meeting aim to enhance the ease of doing business, reduce compliance burdens, and improve tax administration. They provide relief to taxpayers, ensure clarity in tax treatment, and promote greater compliance with the GST regime in India.