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Detailed Analysis of Changes Proposed by the 52nd GST Council

In this article, we will discuss the changes proposed by the 52nd GST Council including Present Position, Changes Proposed & its impact.

1. Bus Transportation Service through Online Portals

2. Corporate Guarantee

3. Director Guarantee

4. Services by Indian Railways: RCM to Forward Charge

5. Amnesty Scheme to file Appeal

6. Allowing supplies to SEZ units/ developer for authorised operations for IGST refund route

7. Receipt of Export Remittances

8. Change in ISD Mechanisms

9. Changes with respect to Goods

1. GST rates on “Food preparation of millet flour in powder form, containing at least 70% millets by weight”, falling under HS1901, with effect from date of notification, have been prescribed as:

a) 0% if sold in other than pre-packaged and labelled form

b) 5% if sold in pre-packaged and labelled form

2. To clarify that imitation zari thread or yarn made out of metallised polyester film /plastic film, falling under HS 5605, are covered by the entry for imitation zari thread or yarn attracting 5% GST rate. However, no refund will be allowed on polyester film (metallised) /plastic film on account of inversion.

3. Foreign going vessels are liable to pay 5% IGST on the value of the vessel if it converts to coastal run. GST Council recommends conditional IGST exemption to foreign flag foreign going vessel when it converts to coastal run subject to its reconversion to foreign going vessel in six months.

4. GST Council recommended to keep Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption outside GST. Law Committee will examine suitable amendment in law to exclude ENA for use in manufacture of alcoholic liquors for human consumption from ambit of GST.

5. To reduce GST on molasses from 28% to 5%. This step will increase Changes with respect to Goods liquidity with mills and enable faster clearance of cane dues to sugarcane farmers. This will also lead to reduction in cost for manufacture of cattle feed as molasses is also an ingredient in its manufacture.

6. A separate tariff HS code has been created at 8 digit level in the Customs Tariff Act to cover rectified spirit for industrial use.The GST rate notification will be amended to create an entry for ENA for industrial use attracting 18% GST.

Other Changes with respect to Services

1. The GST Council has also recommended to exempt services of water supply, public health, sanitation conservancy, solid waste management and slum improvement and up gradation supplied to Governmental Authorities.

2. To clarify that job work services for processing of barley into malt attracts GST @ 5% as applicable to "job work in relation to food and food products” and not 18%.

3. To clarify that District Mineral Foundations Trusts (DMFT) set up by the State Governments across the country in mineral mining areas are Governmental Authorities and thus eligible for the same exemptions from GST as available to any other Governmental Authority.

4. Provision for automatic restoration of provisionally attached property after Completion of One Year:

The Council has recommended an amendment in sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22 to provide that the order for provisional attachment in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order. This will Other Changes with respect to Services facilitate release of provisionally attached properties after expiry of period of one year, without need for separate specific written order

from the Commissioner.

5. Clarification on various issues related to Place of Supply:

The Council has recommended to issue a Circular to clarify the place of supply in respect of the following supply of services: (i) Supply of service of transportation of goods, including by mail or courier, in cases where the location of supplier or the location of recipient of services is outside India; (ii) Supply of advertising services; (iii) Supply of the co-location services.

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Disclaimer: We have taken due care to the best of our knowledge while explaining the provisions surrounding the issue purely for informational/academic purpose. It should not be considered as professional advice or consultancy to be relied upon. While due care has been taken by Fab Gyan in preparing this article, certain mistakes and omissions may creep in. The Fab Gyan or its Author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.

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