55th GST council meeting Important Changes | New GST Rates | New GST changes

Summary

In this detailed video, CA Pooja provides an insightful breakdown of the latest GST Council meeting decisions, highlighting significant amendments in GST law. Key changes include updates on penalties, clarifications on late fees, new provisions for e-commerce operators, and the introduction of temporary identification numbers. The video also covers crucial updates in GST rates for various goods and services, such as reductions for specific export supplies and clarifications on the taxability of vouchers and penalties. For tax professionals and business owners, this session is essential to stay informed on compliance and operational adjustments, with further circulars and notifications to follow.

Takeaways

• 😀 Important GST amendments were discussed at the 55th GST Council Meeting, and a press release with details is available for download.
• 😀 Section 17(5)(d) was amended retroactively from July 1, 2017, to address the issue of Input Tax Credit (ITC) related to plant and machinery, after the Safari Retreat judgment by the Supreme Court.
• 😀 The provision for pre-deposit for appeals has been revised under Sections 107 and 112, reducing the pre-deposit requirement for penalty demands to 10%.
• 😀 The government has provided significant relief by waiving late fees for the delayed filing of Form 9 and 9C for the financial years 2022-23 and 2023-24, subject to certain conditions.
• 😀 Clarifications were issued for e-commerce operators, specifying that they do not need to reverse any ITC under Sections 171 and 172 for certain supplies.
• 😀 Amendments related to IMS (Input Management System) will now be incorporated into the CGST Act and CGST Rules, including changes in Section 38 and Rule 342.
• 😀 New provisions for temporary identification numbers (TIN) for persons not required to register under CGST have been introduced, under Rule 16A.
• 😀 Significant changes in GST rates include reductions for certain export-related supplies, including the introduction of a 0.1% GST rate for compensation on merchant exporters.
• 😀 GST rate increases include a rise to 18% for sales of used vehicles above certain engine capacities and for certain vehicles like SUVs and diesel cars with higher engine capacities.
• 😀 GST applicability on various supplies, including popcorn and penalty charges by banks, has been clarified. GST will no longer be applicable on bank penalty charges for non-compliance.

Q & A

What is the main focus of the 55th GST Council meeting discussed in the video?

The 55th GST Council meeting focused on important amendments to GST laws, including changes to ITC (Input Tax Credit) provisions, GST rate changes on goods and services, and clarifications on various compliance issues.

What major amendment has been made to Section 17(5)(d) of the CGST Act regarding ITC?

Section 17(5)(d) has been amended retrospectively to include the phrase 'Plant and Machinery' instead of just 'Plant' under the provision for ITC, following the Supreme Court's verdict in the Safari Retreat case. This change aims to prevent potential revenue loss from allowing ITC on plant and machinery used in certain industries.

What new provisions have been added to Sections 107 and 112 regarding penalty demands and appeals?

New provisions in Sections 107(6) and 112 have introduced a 10% pre-deposit requirement for filing an appeal against penalty demands. This applies when the penalty is the only issue at hand in the appeal process.

How does the government plan to address late fee penalties for taxpayers under sections 9 and 9C?

The government has recommended issuing a circular to waive late fees under Section 4(27)(2) of the CGST Act for delayed filing of annual returns (including Forms 9 and 9C) for the periods up to FY 2022-23, provided they are filed before 31st March 2025.

What clarification has been made regarding e-commerce operators and ITC reversal?

A clarification has been issued that e-commerce operators are not required to reverse any proportion of ITC on supplies for which they are liable to pay tax under Section 171 and 172, providing significant relief for them.

What changes have been introduced concerning GST rates on goods like old vehicles?

GST rates on the sale of old and used vehicles, including electric vehicles, have been increased to 18%. This also includes the sale of old petrol and diesel vehicles with certain engine capacities and dimensions.

How has the GST rate changed for supplies related to food preparation for distribution under government programs?

The GST rate on food preparations intended for free distribution under government programs to economically weaker sections has been reduced, offering relief to such supplies.

What clarification has been given regarding GST on bank penalties?

A major change has been clarified stating that GST will not be levied on penalty charges imposed by banks or NBFCs for non-compliance with terms and conditions. This aims to relieve taxpayers from unnecessary GST burdens on such charges.

What is the status of the GST rate on popcorn, specifically salted or caramel popcorn?

The GST rate on salted or caramel popcorn has been adjusted, clarifying that the GST will apply only to these specific types of popcorn. This change is part of the clarification on food items.

What important change has been made in Schedule III of the CGST Act concerning warehousing for export?

An important amendment has been made to Schedule III, which now excludes certain warehousing activities from GST. Specifically, the supply of goods stored in special economic zones or free trade warehouses for export is no longer subject to GST under the revised provisions.