37th GST Council Meeting

On September 20, 2019, the Ministry of Finance (MoF) conducted the 37th GST Council Meeting in Goa. The meeting focused on recommendations to law and procedure. The agenda also included GST rates on goods, GST rate on services as well as corporate taxes for domestic companies. GST rates, ITC eligibility criteria, exemptions and clarifications were also discussed along with other areas. The GST council meeting stated that all the recommendations would be implemented by October 1, 2019.

Changes to Procedures made on 37th GST Council Meeting

The recommendations and revisions are applicable to MSMEs for the FY 2017-18 and FY 2018-19

Composition taxpayers are not required to file GSTR-9A for the mentioned periods
Taxpayers who are required to file GSTR-9A with a turnover of Rs.2 crore shall be made optional
A Committee of Officers will be constituted to examine and simplify the forms
To furnish Form GSTR-3B and GSTR-1, new return system will be introduced by April 2020
Procedure will be notified to claim a refund through Form GST RFD-01A
Eligibility to NIL refund application through Form GST RFD-01A has been filed already
As per Circular No.107/26/2019-GST dated on 18.07.2019, the supply of Information Technology enabled Services (ITeS services) shall be made on own account or through an intermediary

The relevant notification can be accessed below:

GST Rate Changes - Services

The following are the reduced GST rates (sector-wise) Hospitality and Tourism

S. No.	Services	Tariff Rates	GST Rate
1	Room tariff	less than Rs.1000	No GST charges
2	Room tariff	between Rs.1001 to Rs.7500	12%
3	Room tariff	above Rs.7501	18%

Catering Services

S. No.

Services

Tariff Rates

GST Rate

Catering services within the premises

Daily tariff rate of Rs.7501

18% with ITC

5% without ITC

Catering services other than the premises

Daily tariff rate of Rs.7501

18% with ITC

Job Work Service

S. No.	Services	GST Rate
1	Supply of job work services related to diamonds	1.5% (from 5%)
2	Supply of machine job work services related to engineering industry (except bus bodybuilding)	12% (from 18%)
3	Supply of machine job work services related to engineering industry(except bus bodybuilding)	18%

GST Exemptions made on 37th GST Council Meeting

Warehousing The following products stored at a warehouse or at storage units are exempted from GST as per the 37th GST Council Meet: Products

Cereals
Pulses
Fruits
Nuts and vegetables
Spices
Copra
Sugarcane
Jaggery

Raw vegetable fibres

Cotton
Flax
Jute
Indigo

Unmanufactured products

Tobacco
Betel leaves
Tendu leaves
Rice
Coffee and tea

Transportation Conditional Exemption of GST on export freight by sea or air has been extended till 30.09.2020 (one more year). Insurance Bangla Shasya Bima (BSB): Farmers in West Bengal who have applied for BSB insurance scheme shall be exempted from GST charges. Central Armed Paramilitary Forces: Life insurances provided to Central Armed Paramilitary Forces or to the family members under the group insurance schemes by Ministry of Home Affairs, shall be exempted from GST charges.

Export Promotion

If the services have been rendered or received for a supplier of goods by any intermediary, GST charges will be exempted if located outside the taxable territory. IGST Act, Pharma: If the following R&D services provided by Indian Pharma companies to foreign companies shall be exempted from GST charges under Section 13(13) of IGST Act

Integrated discovery and development
Evaluation of the efficacy of new chemical or biological entities in animal models of disease
Evaluation of the biological activity of novel chemical or biological entities in in-vitro assays
Drug metabolism and pharmacokinetics of new chemical entities
Safety Assessment/Toxicology
Stability Studies
Bio Equivalence and Bio Availability Studies
Clinical trials
Bioanalytical studies

IGST Act, Chip Design Software: R&D services provided for chip design software to foreign companies shall be exempted from GST charges under Section 13(13)(a) of IGST Act, 2017. Other Exemptions Registered authors can pay GST on the royalty amount claimed from the publishers. The GST can be filed under forwarding charge. Granting liquor licence by State Governments as 'no supply' Service-related to FIFA Under-17 Women's World Cup 2020 Rationalisation/Trade Facilitation Measures Reverse Charge Mechanism: Security lending services can be filed at 18% under the reverse charge mechanism. For security lending services filed before the reverse charge mechanism, GST charges can be filed on a forward charge basis. IGST will be applicable for services rendered and incase if CGST, SGST or UTGST has been paid, taxpayers are not required to pay again. Services rendered by suppliers for body corporate entities on renting vehicles, a registered person other than LLP, proprietorship can avail 5% GST under reverse charge mechanism. The relevant notification can be accessed below:

GST Rates Changes - Goods

S. No.	Products	Reduced Rate	Original Rate
1	Slide Fasteners	12%	18%
2	Marine Fuel 0.5% (FO)	5%	18%
3	Wet Grinders (stone)	5%	12%
4	Dried tamarind	Nil	5%
5	Plates and cups made by leaves, flowers and bark	Nil	5%
6	Cut and Polished semi-polished stones	0.25%	3%

GST rate of 5% is applicable on specified goods for petroleum operations under Hydrocarbon Exploration Licensing Policy (HELP).

Exemption of Goods from GST/IGST

Specific defence products imported that is not being manufactured (up to 2024)
Supply of products related to FIFA Women's Football World Cup
Supply of products related to Food and Agriculture Organisation (FAO)

Exemption of Goods from GST/IGST (Export Promotion)

Imported Silver or Platinum by specified nominated agencies
Silver or Platinum by specified nominated agencies for exports
Diamond India Limited (DIL) will be included in the nominated agencies for IGST exemption and Nil GST rates on importing Gold, Silver or Platinum

GST rate of 12% from 5%, 12% and 18% will be applicable for the following products:

Polypropylene/Polyethylene
Woven and non-woven bags and sacks
With or Without lamination (for packing goods)

Increased GST Rates

The following goods falling under chapter 86 shall have an increased GST rate from 5% to 12%

Railway wagons
Coaches
Rolling Stocks (without accumulated ITC refund)

Caffeinated beverages will have an increased GST rate from 18% to 28% + 12% compensation cess

Concession for certain GST products

Exemption to Fish meal is applicable from 01.07.17 to 30.09.19. Although any tax collected during the period should be deposited. Wheels, pulleys and other parts and used parts of agricultural machinery are exempted (falling under at the GST rate of 12% from 1.07.17 to 30.09.19)

Passenger vehicles with 1500 cc diesel engine shall have 3% cess
Passenger vehicles with 1200 cc petrol engine shall have 1% cess and
Vehicles not exceeding 4000 mm (designed for 9 passengers) shall have 1% cess for petrol and 3% cess for diesel

Miscellaneous Charges

Composition scheme will be implemented for Aerated drink manufacturers
If the petroleum operations that are certified by the Director-General Hydrocarbon (DGH) as non-serviceable, the individual can file at the GST at the rate of 18% (if the GST paid was at 5%)
Tobacco products will have restrictions on refunds for compensation cess (if it is inverted duty structure)
Concession on spare parts imported temporarily to fix the airliner by a foreign airliner (in terms of Chicago Convention on Civil Aviation)

Clarifications

Ingredients such as leguminous vegetables, products to soften or puff the skin and not subjected to other processing ingredients shall be classified under HS code 0713.
GST rate of 12% will be implemented for mechanical sprayers under HS Code 8424
GST rate of 5% will be implemented for solar-based devices such as solar water heater, solar stram, generation system
Medical devices falling under HS code 9018, 9019, 9021 or 9022 will have a GST rate of 12%
Almond milk will be classified under HS Code 22029990 with 18% GST
Products imported for Navy shall be exempted from GST