| Oct-09-2023

Key Recommendations of the 52nd GST Council Meeting: All You Need To Know

A. Recommendations relating to GST rates on goods and services:

📢 I. Changes in GST rates of goods:

➡️ GST rates for "Food preparation of millet flour in powder form, containing at least 70% millets by weight" were set at 0% if sold unpackaged and 5% if sold pre-packaged and labeled.

➡️ Imitation zari thread or yarn made from metallized polyester/plastic film falls under the 5% GST category.

➡️ Foreign-going vessels converting to coastal runs are recommended to have conditional IGST exemption, provided they reconvert to foreign-going vessels within six months.

📢 II. Other changes relating to Goods:

➡️ Extra Neutral Alcohol (ENA) used for manufacturing alcoholic liquor for human consumption is excluded from GST.

➡️ The GST on molasses is reduced from 28% to 5% to facilitate liquidity for mills and faster payment to sugarcane farmers.

➡️ A separate tariff HS code is created for rectified spirit for industrial use with an 18% GST rate.

📢 III. Changes in GST rates of services:

➡️ Services provided to Central/State/UT governments and local authorities for functions entrusted to Panchayat/Municipality remain exempt from GST.

➡️ Services related to water supply, public health, sanitation, conservancy, solid waste management, and slum improvement for Governmental Authorities are exempt from GST.

📢 IV. Other changes relating to Services:

➡️ Job work services for processing barley into malt attract 5% GST, not 18%.

➡️ Bus transportation services supplied through Electronic Commerce Operators (ECOs) may exclude bus operators organized as companies from section 9(5) of CGST Act, 2017, enabling them to pay GST using their Input Tax Credit (ITC).

➡️ District Mineral Foundations Trusts (DMFT) set up by State Governments are considered Governmental Authorities and eligible for GST exemptions.

➡️ All goods and services by Indian Railways will be taxed under Forward Charge Mechanism to enable ITC, reducing costs.

📌 B. Measures for facilitation of trade:

➡️ An amnesty scheme for filing appeals against demand orders is recommended for taxable persons who couldn't file appeals within the allowable time period, allowing them to file appeals by January 31, 2024, subject to conditions.

➡️ Clarifications regarding taxability of personal guarantees and corporate guarantees provided between related parties are provided, including valuation rules.

➡️ Provision for automatic restoration of provisionally attached property after one year is recommended.

➡️ Clarifications are provided on various issues related to the Place of Supply, including transportation of goods, advertising services, and co-location services.
A circular is recommended to clarify the admissibility of export remittances received in Special INR Vostro accounts for the purpose of considering supply of services as exports.

➡️ Amendments are proposed to allow supplies to SEZ units/developers for authorized operations for IGST refund route.

📌 C. Other measures pertaining to law and procedures:

➡️ Amendments are recommended to align provisions of the CGST Act, 2017 with the Tribunal Reforms Act, 2021 in respect of the appointment of President and Member of the proposed GST Appellate Tribunals.

➡️ Amendments are proposed regarding Input Service Distributor (ISD) procedures for the distribution of Input Tax Credit (ITC) for services procured by Head Office from a third party but attributable to both HO and Branch Office (BO) or exclusively to one or more BOs.

✔️ Please note that these recommendations will be implemented through relevant circulars, notifications, and law amendments, which will have the force of law.

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