Tag Archives: GST Council

GST Council recommends rates reduction on many goods

Newsroom24x7 Network

GST rates have been recommended to be brought down to Nil on Sanitary Napkins &Rakhi& more Goods

GST Council recommends for allowing refund to fabrics on account of inverted duty structure

Rate change made in respect of footwear

New Delhi: The GST Council at its 28thmeeting held here today (22 July 2018) under the Chairmanship of Piyush Goyal , Union Minister for Railways , Coal , Finance & Corporate Affairs  took following decisions on GST Rate on Goods .
  1. GST rates reduction on 28% items:
  1. 28% to 18%
  • Paints and varnishes (including enamels and lacquers)
  • Glaziers’ putty, grafting putty, resin cements
  • Refrigerators, freezers and other refrigerating or freezing equipment including water cooler, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.
  • Washing machines.
  • Lithium-ion batteries
  • Vacuum cleaners
  • Domestic electrical appliances such as food grinders and mixers & food or vegetable juice extractor, shaver, hair clippers etc
  • Storage water heaters and immersion heaters, hair dryers,  hand dryers, electric smoothing irons etc
  • Televisions upto the size of 68 cm
  • Special purpose motor vehicles. e.g., crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries
  • Works trucks [self-propelled, not fitted with lifting or handling equipment] of the type used in factories, warehouses, dock areas or airports for short transport of goods.
  • Trailers and semi-trailers.
  • Miscellaneous articles such as scent sprays and similar toilet sprays, powder-puffs and pads for the application of cosmetics or toilet preparations.

 

  1. 28% to 12%

 

  • Fuel Cell Vehicle. Further, Compensation cess shall also be exempted on fuel cell vehicle.

 

  1. Refund of accumulated credit on account of inverted duty structure to fabric manufacturers:Fabrics attract GST at the rate of 5% subject to the condition that refund of accumulated ITC on account of inversion will not be allowed. However, considering the difficulty faced by the Fabric sector on account of this condition, the GST Council has recommended for allowing refund to fabrics on account of inverted duty structure. The refund of accumulated ITC shall be allowed only with the prospective effect on the purchases made after the notification is issued.
  • III. GST rates have been recommended to be brought down from,-

 

  1. 18%12%/5% to Nil:

 

  • Stone/Marble/Wood Deities
  • Rakhi [other than that of precious or semi-precious material of chapter 71]
  • Sanitary Napkins,
  • Coir pith compost
  • Sal Leaves siali leaves and their products and Sabai Rope
  • PhoolBhariJhadoo [Raw material for Jhadoo]
  • Khali dona.
  • Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd [SPMCIL] to Ministry of Finance.
  1. 12% to 5%:

 

  • Chenille fabrics and other fabrics under heading 5801
  • Handloom dari
  • Phosphoric acid (fertilizer grade only).
  • Knitted cap/topi having retail sale value not exceeding Rs 1000
  1. 18% to 12%:

 

  • Bamboo flooring
  • Brass Kerosene Pressure Stove.
  • Hand Operated Rubber Roller
  • Zip and Slide Fasteners

 

  1. 18% to 5%:
  • Ethanol for sale to Oil Marketing Companies for blending with fuel
  • Solid bio fuel pellets

 

  • IV. Rate change made in respect of footwear

 

  • 5% GST is being extended to footwear having a retail sale price up to Rs. 1000 per pair
  • Footwear having a retail sale price exceeding Rs. 1000 per pair will continue to attract 18%

 

  1. GST rates have been recommended to be brought down for specified handicraft items [as per the definition of handicraft, as approved by the GST council] from,-

 

  1. 18% to 12%:

 

  • Handbags including pouches and purses; jewellery box
  • Wooden frames for painting, photographs, mirrors etc
  • Art ware of cork [including articles of sholapith]
  • Stone art ware, stone inlay work
  • Ornamental framed mirrors
  • Glass statues [other than those of crystal]
  • Glass art ware [ incl. pots, jars, votive, cask, cake cover, tulip bottle, vase ]
  • Art ware of iron
  • Art ware of brass, copper/ copper alloys, electro plated with nickel/silver
  • Aluminium art ware
  • Handcrafted  lamps (including panchloga lamp)
  • Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastes etc, (including articles of lac, shellac)
  • Ganjifa card

 

  1. 12% to 5%:

 

  • Handmade carpets and other handmade textile floor coverings (including namda/gabba)
  • Handmade lace
  • Hand-woven tapestries
  • Hand-made braids and ornamental trimming in the piece
  • Toran

 

  1. Miscellaneous Change relating to valuation of a supply:

 

  • IGST @5% on Pool Issue Price (PIP) of Urea imported on Govt. account for direct agriculture use, instead of assessable value plus custom duty.
  • Exemption from Compensation cess to Coal rejects from washery [arising out of cess paid coal on which ITC has not been taken].

 

  1. Clarifications/amendments as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes:

 

  1. Milk enriched with vitamins or minerals salt (fortified milk) is classifiable under HS code 0401 as milk and exempt from GST.
  2. 5% GST on both treated (modified) tamarind kernel powder and plain (unmodified) tamarind kernel powder.
  3. Beet and cane sugar, including refined beet and cane sugar, (falling under heading 1701) attracts 5% GST rate.
  4. Water supplied for public purposes (other than in sealed containers) does not attract GST.
  5. Marine engine (falling under sub-heading 8408 10 93) attracts 5% GST rate.
  6. Kota stone and similar stones [ other than marble and granite] other than polished will attracts 5% GST, while ready to use polished Kota stoneand similar stones will attracts 18%.
  7. Certain other miscellaneous clarification as regards classification/rate have been recommended

GST: Lack of consensus between Centre and States on who will control what

Newsroom24x7 Staff

GstNew Delhi: Logjam on the vital question who will control which set of assessees under GST persists as the Centre and states failed to reach any understanding on this matter at a crucial meeting here today.

The GST Council will take up this matter when it meets on November 25.

April 1, 2017 onwards, government aims to roll out GST, which will subsume excise, service tax and local levies

A meeting of Union Finance Minister and state finance ministers was held today to address the issue of sharing of administrative control under the proposed goods and services tax (GST) regime.

After today’s meeting Finance Minister Arun Jaitley told media-persons that the meeting has remained incomplete. Discussions, according to Jaitley, will continue when the GST Council meets formally on November 25.

Uttarakhand, West Bengal, Tamil Nadu and Kerala and Uttar Pradesh want full control over small businesses that earn less than Rs 1.5 crore in a financial year both in terms of goods and services.

 

Implementation of GST by generalists and private players: Discontent brewing among IRS officers

Lalit Shastri

The idea of forming a private limited company with private players to implement the GST goes against the whole concept of sovereign responsibility of administering tax administration. It is to be underscored that India is a Union of States and the Union should not become weak by giving the States excessive leverage when it comes to implementing GST. It was weak institutional framework and tax administration that was responsible for the fiscal developments that eventually flared up the Greek crisis..

GstThere is stiff opposition and no dearth of anger among a section of officers belonging to the Indian Revenue Service as the Government of India has put a system in place whereby the GST secretariat will be headed by generalists and not by those who have the experience of collecting Central Excise and Service Tax, which accounts for 56% of GDP.

There is also stiff opposition to the whole idea of setting up a private limited company (GSTN), which is headed by a retired IAS officer, to implement GST.

While stating that they already have a successful track-record of assessment, collection, duty drawback and refunds, backed by one of the most efficient manpower and the best system in the world, the IRS officers are  pointing out that the Central Excise and Service Tax website handles the important job of Registration, Return filing and Duty Payment. They are particularly drawing attention towards their professional competency and asserting that the GST Secretariat should not be allowed to be run by generalists.

On the Customs side, it is being pointed out by the IRS officers that besides their duty to assess, their Single Window, ICEGATE (Indian Customs EDI Gateway) or the e-Commerce Portal of Central Board of Excise & Customs, and the Risk Management System (RMS), which is an IT driven system with the primary objective to strike an optimal balance between facilitation and enforcement, can be compared with the best systems anywhere in the world.

An IRS officer stated that the Directorate General of Central Excise Intelligence (DGCEI), Directorate of Revenue Intelligence (DRI) and their Audit are professionally managed and touch global standards. He further said that they ensure minimum interface, absolute transparency, and follow strict deadlines when it comes to taking decisions. Taking a jibe at the Government of India for entrusting the administration of GST Council and GST Network to IAS officers, he said this is highly demoralising for the Indian Revenue Service officers.

An IRS officer wrote on a social networking platform that “with weak and demoralised work-force, the Centre neither can be strong nor can it fulfill its responsibilities in a judicious manner vis-a-vis the Directive Principles of State Policy An economically weak Centre is a death knell for Democracy and Cooperative Federalism, he said adding the need of the hour is a professionally driven Tax Administration System.”

Another IRS officer reacted in sharp terms he said: “The idea of forming a private limited company with private players to implement the GST goes against the whole concept of sovereign responsibility of administering tax administration. It is to be underscored that India is a Union of States and the Union should not become weak by giving the States unnecessary leverage in administering the GST. It was weak institutional framework and tax administration that was responsible for the fiscal developments that eventually flared up the Greek crisis.”

The Union Cabinet in its meeting held on 12 September, 2016 approved setting-up of GST Council and its Secretariat. Simultaneously, it was announced that the first Meeting of the GST Council will be held on 22 and 23 September 2016 in the national Capital.

The Cabinet took decisions for the following:

  • Creation of the GST Council as per Article 279A of the amended Constitution;
  • Creation of the GST Council Secretariat, with its office at New Delhi;
  • Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
  • Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;
  • Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).

The Cabinet also decided to provide for funds for meeting the recurring and non recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments.

The Constitution (122 Amendment) Bill, 2016, for introduction of Goods and Services Tax (GST) in the country was accorded assent by the President on 8 September, 2016, and the same has been notified as the Constitution (101) Act, 2016.

As per Article 279A (1) of the amended Constitution, the GST Council was to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12 September, 2016 was issued on 10 September, 2016.

As per Article 279A of the amended Constitution, the GST Council will be a joint forum of the Centre and the States. This Council shall consist of the following members:

  • Union Finance Minister – Chairperson
  • The Union Minister of State, in-charge of Revenue of finance -Member
  • The Minister In-charge of finance or taxation or any other Minister nominated by each State Government – Members

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, and special provisions for certain States.


Goods and Services Tax Network (GSTN)†

It is a not-for-profit, non-Government Company set up by the Centre and States for implementation of the Goods and Services Tax (GST) by providing shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders.

GSTN is a National Information Utility (NIU) set up to provide an IT Backbone for the “smooth functioning of the Goods & Services Tax regimen”. It is being projected as an entity to “leverage the entire nation as One Market with minimal Indirect Tax compliance cost”.

GSTN was incorporated on March 28, 2013. The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% equity is with non-Government financial institutions.

GSTN is a private limited company registered under the Companies Act, 1956. The Authorised Share Capital of the company is INR 10,00,00,000 (Rupees 100 million) with 49% equity of the company held by the Government (24.5% Central Government and 24.5% all State Governments/UTs put together) and 51% equity is held by private financial institutions namely ICICI Bank, HDFC Bank, HDFC Ltd, LIC Housing Finance and National Stock Exchange Strategic Investment Corporation Ltd.

Organisation Structure

Today GSTN has a team of 46 full time employees including 37 from the Private Sector and 9 deputationists from the Government. The Organisation Structure of the Company broadly consists of 3 verticals, viz. Technology, Services and Support, each headed by an Executive Vice President (EVP) reporting to the CEO. The Technology team is to be entirely sourced from the Private Sector, Services Team from deputationists consisting of Tax Officials from the Central and State Governments and the Support team is a mix from both Private Sector as well deputationists.

Indian IT services Company Infosys, through a competitive bidding process, in which other big IT companies like TCS, Wipro, Tech Mahindra and Microsoft also participated, bagged the contract of Rs 1,380 crore to be the Managed Service Provider (MSP) for GSTN.

The MSP shall build the technology infrastructure for Goods and Services Tax known as the GST System Project (GSTSP), a common Portal for the use of different Tax Payers, Tax Administrators and other stakeholders which includes common Registration, Return and Payment services. The MSP will build the system and once it is ready they will operate it for five years. The Contract with Infosys was signed on 6 November 2015.

Navin Kumar, a retired 1975 batch IAS officer, is the Chairman of the Goods and Services Tax Network.

GSTN Mandate

  • Provide common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and other stakeholders for implementation of the Goods & Services Tax (GST).
  • Provide common Registration, Return and Payment services to the Tax payers.
  • Partner with other agencies for creating an efficient and user-friendly GST Eco-system.
  • Encourage and collaborate with GST Suvidha Providers (GSPs) to roll out GST Applications for providing simplified services to the stakeholders.
  • Carry out research, study best practises and provide Training and Consultancy to the Tax authorities and other stakeholders.
    Provide efficient Backend Services to the Tax Departments of the Central and State Governments on request.
  • Develop Tax Payer Profiling Utility (TPU) for Central and State Tax Administration.
  • Assist Tax authorities in improving Tax compliance and transparency of Tax Administration system.
  • Deliver any other services of relevance to the Central and State Governments and other stakeholders on request.

† authorised websites