Key Analysis of Rate Notifications issued by CBIC
45th GST Council, chaired by the Honorable Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman, will be held in Lucknow on September 17th, 2021. The council's recommendations included some reliefs in view of the COVID pandemic, compensation cess utilisation, GST law and procedure adjustments, interest on ineligible ITC, and more.
These recommendations would be implemented by the issuing of circulars and notifications as needed. We have attempted to include all of the highlights of the abovementioned news release, as well as other major suggestions made by the council, in this text.
Recommendations of the 45th GST Council meeting, the CBIC explains certain services are mentioned Below:
|
Services |
Clarification |
Interpretation/Analysis |
|
Grant of mineral exploration and mining rights- Services |
Rate schedule did not specifically mention the service by way of grant of mining rights, during the period 1 July 2017 to 31 December 2018, it was taxable at 18%. |
The expression “the same rate of tax as applicable on supply of like goods involving transfer of title in goods” applies in case of leasing or renting of goods. In case of grant of mining rights, there is no leasing or renting of goods. Hence, the said entry does not extend to grant of mining rights which is an entirely different activity. |
|
Services supplied by contract manufacturers to brand owners for manufacture of alcoholic liquor for human consumption |
Services by way of job work in relation to manufacture of alcoholic liquor for human consumption are not eligible for the GST rate of 5% prescribed under the said entry. Such job work would attract GST at the rate of 18%. |
The expression “food and food products” excludes alcoholic beverages for human consumption. In common parlance, even alcoholic liquor is also not considered |
|
Admission to indoor amusement parks having rides etc. |
Admission to a place having casino or race club even if it provides certain other activities or admission to a sporting event like IPL attracts GST @28%. All other cases of admission to amusement parks, any place having joy rides, merry-go rounds, go-carting, etc., indoor or outdoor, with no access to casino or race club attracts GST @18%. |
Clarification regarding applicable rate of GST on services provided by indoor amusement parks/family entertainment centres, and scope of the word ‘amusement park’ under Entry 34(iii) of Notification No. 11/2017-CTR |
|
ice cream Supply by ice cream parlours |
Where ice cream parlours sell already manufactured ice- cream, it is supply of ice cream as goods and not as a service, even if the supply has certain ingredients of service. Hence, ice cream sold by a parlour or any similar outlet would attract GST at the rate of 18%. |
Ice-cream parlours do not engage in any form of cooking at any stage. Their activity entails supply of ice cream as goods (a manufactured item) and not as a service, even if certain ingredients of service are present. |
|
overloading charges at toll plaza – GST |
Overloading charges at toll plazas would get the same treatment as given to toll charges. |
Overloaded vehicles were allowed to ply on the national highways after payment of fees basis the base rate. In essence overloading fees are effectively higher toll charges. |
|
cloud kitchens/central kitchens - Services |
Service provided by way of cooking and supply of food by cloud kitchens/central kitchens are covered under restaurant service and attracts 5% GST. |
Restaurant services includes takeaway services and door delivery of food. |
FACILITATING AND STREAMLINING OF GST COMPLIANCES
- Late fee applicable for Form GSTR-1 will now be auto-populated in upcoming GST Return in Form GSTR-3B.
- GST Registered person shall not be allowed to file FORM GSTR-1 if he has not file GST Return in FORM GSTR-3B for last month. this is applicable from 01.01.2022.
- Aadhar authentication has been made compulsary for gst taxpayers wanting to take the GST refund & applying cancellation or revocation of registration.
- GST refund will be made in the same bank account in which PAN card has been linked with bank.
These recommendations are suggested following much deliberation and discussion. Many difficulties were raised in light of the current COVID situation, including GST structure challenges, ambiguity, and the hardships that a taxpayer faces. There will be numerous initiatives implemented that will be advantageous and inviting to taxpayers.
Above points were merely given as recommendations, and they have yet to be incorporated via circulars and notifications.
Conclusion
- these are the only modifications that have been announced. With this email, we've sent a complete copy of the circulars. Make sure to read them completely to understand all of the specifics associated with each circular.
- The Council reviewed the issue for quite some time. The Council decided to establish a GoM to examine into the subject of correcting inverted duty structures for significant sectors, rationalising rates, and reviewing exemptions from GST from the perspective of revenue enhancement.
- It was also decided to form a GoM to discuss ways to use technology to improve compliance, such as monitoring via e-invoices, improved e-way bill systems, & FASTag data, as well as strengthening the institutional mechanism for intelligence sharing & coordinated enforcement actions between the States & the Centre.
CBIC issue notification on Shipping Bill (Post export conversion in relation to instrument based scheme) Regulations, 2022
The Central Board of Indirect Taxes and Customs has released the Shipping Bill (Post-export conversion in relation to instrument-based scheme) Regulations, 2022. The manner, circumstances, time limit & restrictions for applying for post-export conversion of a Shipping Bill are specified in these regulations.
