Key points from 50th GST Council Meeting dated 11-7-2023:
– Proposal that Casino, Horse Racing and Online Gaming to be taxed at uniform rate of 28% on full face value.
– Proposal to amend Entry 52B in Compensation Cess Notification (22% Compensation Cess) to include all categories of motor vehicles by whatever name called so long as they fulfil three conditions namely length exceeding 4000 mm and engine capacity above 1500 cc and ground clearance (in unladen state) of 170 mm and above.
– Proposal to issue notification of GST Appellate Tribunals by 1-8-2023.
– Proposal to provide exemption for cancer related drugs, medicines for rare diseases and food products for special medical purposes from GST.
– Clarification that supply of food & beverage over the counter in a Cinema Hall to be liable to GST @ 5% (without input tax credit) as supply of restaurant services. Where food & beverage is supplied as a bundled service along with movie ticket, then such supply will be a composite supply, principal supply being movie ticket.
– Proposal to come up with capacity based taxation and special compensation scheme for sin goods such as pan masala, tobacco & other similar items in line with with erstwhile excise regime. Proposal to restrict IGST refund on export of such goods.
– Proposal to issue a circular to clarify ISD mechanism for transfer of common credits, ISD mechanism to be made mandatory prospectively.
– Clarification that GST not payable on FOC replacement of goods by a manufacturer to its dealers for undertaking repairs under warranty arrangement. Manufacturers not to reverse their input tax credit on such FOC replacement.
– Clarification that interest in case of wrong availment and utilisation of IGST is to be computed after taking into consideration credit balances available in electronic credit ledgers under all heads i.e. IGST, CGST and SGST.
– Circular to be issued to clarify refund related issues.
– Circular to be issued to provide clarifications regarding TCS liability in cases where multiple E-commerce Operators are involved in a single supply of goods or services or both.
Govt. includes ‘Goods and Services Tax Network’ under PMLA to enable sharing of data with ED.
Notification No. G.S.R. 491(E), dated 7-7-2023.
Geocoding functionality for principle place of business address is now live for State and Union Territories.
GSTN Advisory
Sec. 16 – CGST Act – Where supplier committed default in reporting entries with respect to purchase made by assessee in e-auction and it was admitted by supplier that payment for such purchase including GST value was received from assessee, since it is a settled law that no one can be made to suffer from fault of another, petition was allowed and assessee was entitled to get refund from the department.
Agrawal & Brothers v. UoI – [2023] 152 taxmann.com 111 (Madhya Pradesh).
Since Club House and other common amenities are provided as a service with no transfer of title to land or buildings, hence would not be governed under Entry 5 of Schedule III of CGST Act, therefore, it forms a separate supply liable to tax; Since consideration towards plot area is covered under Entry 5 of Schedule III, GST is not liable to be paid; Since amount collected on account of basic infrastructure development charges only increases the value of land (plot) on which residential apartment is made, hence it does not form a separate supply, and therefore, not chargeable to GST; Only service of access to club house and common amenities is considered a supply, therefore, value proportionate to club house and common amenities are applicable to GST where consideration collected for all i.e. sale of plot, IDC and Other amenities, are taken as consolidated price.
Godrej Properties Ltd., In re – [2023] 152 taxmann.com 83 (AAR – KARNATAKA).
Sec. 74 of CGST Act – Initiation of proceedings u/s 74 without scrutiny of returns u/s 61 is valid since section 73 & 74 are not controlled by section 61 as reference to the same is absent in law. Further, section 74 uses ‘where it appears’ conferring wide scope as information may be from any credible source.
Devi Traders v. State of Andhra Pradesh – [2023] 152 taxmann.com 22 (Andhra Pradesh).