This article covers all Recommendations of 50th GST Council Meeting 2023 held on 11th July, 2023 at New Delhi. The GST Council Meeting has met 50 times since its constitution, and many important decisions were taken in this 50th GST Council meeting. Last GST council meeting held in new Delhi on 18^th February,2023. This 50th GST Council met under the Chairmanship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman. Besides, to mark this occasion, the first set of a Special Cover and customized ‘My Stamp’ were also presented to Chairperson and Members of the Council by the Chief Post Master General, Delhi.

Proposed Reduction in GST rates for certain Goods|GST Council Meeting 2023

GST rates reduction has been recommended for the following goods.

1. It has been proposed in the 50th GST Council 2023 meeting to exempt IGST in Dinutuximab (Quarziba) medicine imported for personal use. Moreover, government has also decided to exempt IGST on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseased enlisted under national Policy for Rare Diseases 2021 when imported for personal use subject to conditions.
2. If any person has paid GST @ 5% or 12% in earlier period, there will not be any litigation, as for past period issues it regularizes on “as is” basis.
3. If any person has paid GST @ 5% or 18% in earlier period, there will not be any litigation, as for past period issues it regularizes on “as is” basis.
4. GST rate on LD slag is recommended from 18% to 5% to encourage better utilization of this product and for protection of environment.

Certain recommendations for rates of goods|GST Council Meeting 2023

Regularize matters relating to desiccated coconut.

The council meeting has decided to regularize the matters related to desiccated coconut for the period 01-07-2017 to 27-07-2017 on as is basis for genuine interpretational issues.

Compensation cess on PAN Masala, Tobacco Product etc.

For levy Compensation cess, on the PAN Masala, Tobacco products etc. where retail sales price is not required to be declared, the earlier ad valorem rate as was applicable on 31.03.2023 may be notified for levy of compensation cess.

Regularize matters relating to GST on Plates and Cups made of areca leaves.

In the meeting, it is proposed to regularize matters relating to GST on plates and cups made   of areca leaves for the period prior to 01-10-2019.

Regularize matters relating to GST on biomass briquettes.

In the meeting, it is proposed to regularize matters relating to GST on Biomass briquettes for the period 01-07-2017 to 12-10-2017.

GST on Supply of Food and Beverages in Cinema Halls|GST Council Meeting 2023

Food and beverages supply in cinema halls will be considered as restaurant service and liable for 5% GST.

To remove the confusion regarding the rate of GST on supply of food and beverages in cinema halls, it has been proposed in Council meeting that the food and beverages supply at cinema halls will be covered under the definition of Restaurant service and eligible to 5% GST rate.

If the cinema hall ticket and supply of food and beverages are clubbed together, then GST will be applicable on the bundled supply. It would be considered as composite supply and rate of GST will be of the principal supply i.e., service of exhibition of cinema.

Clarification on RCM in supply of raw cotton including Kala Cotton|GST Council Meeting 2023

RCM will be applicable in supply of raw cotton including Kala Cotton by agriculturist to any registered person including Cooperative societies.

Our Analysis:

As per Notification No.04/2017 dated 28-06-2017, RCM on goods was first time introduced. Afterwards Notification No.43/2017 has been issued to include “supply of raw cotton by Agriculturist to any registered person or RCM applicability.

This 50th gst council meeting 2023 has decided to clarify the confusion regarding RCM applicability on supply of raw cotton by agriculturist. Hence in the council meeting it has been clarified that the supply of raw cotton includes Kala Cotton also. Furthermore, supply by agriculturist to any registered person including Cooperative society.

In short, the government has clarified that RCM will be applicable on supply of raw cotton including Kala cotton by agriculturist to any registered person that includes cooperative societies

All type of utility vehicles will be subject to 22% compensation cess based on specified criteria

22% GST Compensation cess proposed in council meeting for all the types of utility vehicles by whatever name called provided they meet the parameters of the engine capacity exceeds 1,500 cc, the length exceeds 4,000 mm and the ground clearance is 170 mm and above.

Our Analysis:

In the 48^th council meeting the government had declared what constitutes SUVS by satisfying 3 stages of it. 1. Engine capacity must be greater than 1500 cc 2. Length that is greater than 4000 mm 3. Ground clearance must be greater than 170 mm.

In 50^th Council meeting 2023, it is recommended that all utility vehicles by whatsoever name called, 22% GST Compensation cess will applicable provided vehicles meet criteria of the engine capacity exceeding 1,500 cc, the length exceeding 4,000 mm and the ground clearance having 170 mm and above

IGST exemption on import of gold by RBL Bank and ICBC Bank

Annexure 4B (HBP) of foreign trade policy 2023 states list of nominated agencies.

It has been proposed that RBL Bank and ICBC bank are to be included in the list of nominated agencies for which IGST Exemptions is available on imports of gold, silver, or platinum.

For such changes in the notifications may be carried out for new foreign Trade Policy 2023.

GTA not required to file declaration every year|GST Council Meeting 2023

Declaration by GTA to Pay GST under Forward Charge Mechanism:

It has been proposed in the 50^th GST meeting 2023 that GTAs will not require to file declaration for paying GST under Forward charge mechanism every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM).

It has also been decided that the last date of exercising the option by GTAS to pay GST under forward charge shall be 31^st march of preceding financial year instead of 15^th March.

1^st January of the preceding financial year shall be the start date for the exercise of option

Exemption on satellite launch services will now available to private sector also

It has been recommended, GST Exemptions will be available to Private sectors for Satellite launch service like ISRO, Antrix Corporation limited, new space India Limited (NSIL).

RCM only on services supplied in the capacity of director

It has been decided to clarify that the services supplied by a director of a company to the company in his private or personal capacity will not be subject to RCM.

e.g. service of rending of immovable property to the company/body corporate.

Only those services supplied by director of the company or Body corporate which are supplied by him as or in the capacity of director of that company or Body Corporate shall be taxable under RCM in the hands of the company or Body Corporate under Notification No.13/2017-CTR dated 28-06-2017.

Regularize matters relating to Traumma, spine and arthroplasty implants

The 50th gst council meeting 2023 has decided to regularize the matters related to trauma, spine and arthroplasty implants for the period prior to 18-07-2022 as is basis for genuine interpretational issues.

GST on Casinos Race Courses and Online Gaming

A Group of ministers submitted its report, and it was placed before the 50^th GST Council meeting 2023. Group of ministers has recommended that since no consensus could be reached on whether the activities of online gaming, horse racing and casinos should be taxed at 28% on the full-face value of bets placed or on the Gross Gaming revenue (GGR), the GST Council may decide. The GST Council has deliberated on the issues and has recommended the following:

Suitable amendments to be made to the law to include online gaming and horse racing in schedule III as taxable actionable claims.

All three namely casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28%

Tax will be applicable on the face value of the chips purchased in the case of casinos, on the full value of the bets placed with bookmaker/totalizator in the case of Horse Racing and on the full value of the bets placed in the case of online Gaming.

Our Analysis

At present there is litigation GST rate applicability on online gaming as the taxation framework for online gaming sector is based on “Skill” or “Chance “as well as the participation of real money in these online games.

Now to levy GST @28% in this sector, the government wants to amend Schedule-III to make online gaming, casino, and horse races taxable actionable claims

Rules for constitution and functioning of GST Appellate Tribunal

The 50th GST Council Meeting 2023 has directed for rules governing appointment and condition of president and members of the GST Appellate Tribunal for enabling smooth constitution and functioning of GST Appellate Tribunal.

The 50th GST Council Meeting 2023 has recommended the Chief Secretary of Maharashtra to be nominated as one of the members of search cum selection committee as per section 110(4) (b) (iii) of CGST Act, 2017 for numbers of state benches which will be decided in phase manner.

Furthermore, by council with effect from 01-08-2023 provisions of finance act, 2023 for GST Appellate tribunal may be notified.

Relaxations for GSTR-9 and 9C continued for 2022-23 also

GSTR-9 & 9C for FY 2022-23

It has been proposed that exemption to file GSTR-9 for taxpayers having aggregate turnover up to 2 crore rupees will be continued for FY 2022-23 to reduce the burden on small taxpayers.

Besides that, Council has also recommended relaxations provided in FY 2021-22 in various tables of FORM GSTR-9 and GSTR-9C will be continued for FY 2022-23.

ISD mechanism mandatory prospectively

It has been proposed in 50th gst council meeting 2023 to clarify the issue relating to Distribution of common input services procured from third parties to distinct person. As per the present GST law, for distribution of ITC procured from third party, Input service distribution registration is not mandatorily taken by the person.

The council has recommended that amendment may be made to in GST Law to make ISD mechanism mandatory prospectively for distribution of input tax credit of such common input services procured from third parties prospectively.

It is clarified that no GST on replacement of Parts and Repairs service by Manufacturer

It has been proposed in the council meeting about clarification on issues pertaining to the GST liability and liability to reverse the input tax credit in case of warranty replacement of parts and repair services during warranty period

It has been observed that the manufacturer does not charge any consideration from the customer for warranty replacement of parts and repair services during warranty period. Hence No GST will be levied on replacement of parts and /or repair service by manufacturer.

The 50th GST Council Meeting 2023 proposed to provide the recommendation regarding GST liability and reversal of ITC in such case. It has been proposed that no GST liability be accrued in case of warranty replacement of parts and repair services during warranty period due to free service provided by manufacturer. The manufacturer does not require to reverse the ITC.

TCS in the case of multiple ECO in single transaction|GST Council Meeting 2023

It has been recommended in GST Council meeting 2023 to clarify issue relating to TCS liability u/s 52 of CGST Act, 2017 in case where multiple E-Commerce Operators (ECOS) are involved in single transaction of supply of goods or services or both.

At present, it is the liability of E Commerce Operator to deduct the TCS and pay to the government. But there is confusion in cases where multiple e commerce operators are involved in a single transaction of supply of goods or services or both. Who shall be liable to deduct the TCS and pay the Government?

To remove such confusion the council has decided to clarify such things by issuing a circular

Clarifications for refund related issues

A. Accumulated ITC refund to the extent reflected in GSTR-2B only.

Consequent to amendment in rule 36(4) with effect from 01-01-2022 refund of accumulated ITC u/s 54(3) of CGST Act, 2017 for tax period to be restricted to ITC on inward supplies reflected in FORM GSTR-2B of the said tax period or any previous tax period.

ITC on inward supplies reflected in GSTR-2B are only eligible to claim for refund for said tax period or any previous tax period.

From the above it is pretty much clear that ITC as per books are eligible to claim a refund only if it reconciles with GSTR-2B.

B. Adjusted Turnover in rule 89(4) be calculated as per the explanation only

Consequent to explanation having been inserted in rule 8994) of CGST Rues vide Notification 14/2022 CT dated 05.07.2022, the value of export goods to be included while calculating ‘adjusted total turnover” in the formula under rule 89(4) will be determined as per the explanation.

Our analysis:

• As per Notification No.14/2022 dated 05-07-2022 states the value of export of goods for calculation of “adjusted total turnover “used in formula under rule 89(4) of CGST, Rules, 2017.

Notification states that Value of Exports goods shall be taken as,

FOB Value declared in shipping Bill or Bill of export form as the case may be.  

                                       Or

The value declared in tax invoice or Bill of supply.

Whichever is lower. Now it is clarified that value derived from the above format is liable to be considered in calculation of “adjusted total Turnover” for claiming refund as per rule 89(4) of CGST Rules, 2017

Our analysis:

Rule 96A deals with export of goods and services under Bond or LUT

Rule 96A has following condition for receipt of payment:

1. In case of Goods

Goods should be exported within 3 months of the date of issue of invoice.

2. In case of service

Payment should be received in foreign currency within 1 year of the date of issue of invoice.

In the case of goods, if the registered person has applied for a refund, and failed to export within three months, then in such case clarification will be issued by the Government for admissibility of refund.

In the case of services, if a registered person has applied for a refund but failed to receive foreign currency within one year from the date of issue of invoice then in such case clarification will be issued by the Government for admissibility of refund.

Changes in Tax Invoice by ECO or supplier of OIDAR to URD|GST Council Meeting 2023

The 50th gst council meeting decided to amend Clause (f) of Rule 46 of CGST Act, 2017 for easement to taxpayer. The council has proposed to change the Tax invoice details in case of supply of taxable services by or through an ECO or by a supplier of OIDAR services to unregistered person as under

Circulars proposed to be issued to remove ambiguity and legal disputes on various issues

A. E Invoice related issues

As per the Notification No.17/2022 –Central tax dated 01-08-2022, every registered person whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds 10 crore rupees required to prepare invoice as per rule 48(4) of CGST rules 2017 i.e., E invoice is required to generate.

Further amendment in above notification by Notification No.10/2023 –Central tax dated 10-05-2023 which requires to prepare E invoice in case of aggregate turnover in any preceding financial year from 2017-18 onwards exceeds 5 crore rupees effective from 01-08-2023.

The council has decided to issue circular to clarify issue relating to E invoice in case where supplies made to the Government Departments or establishments / Government agencies / local authorities /PSUs etc. registered only for the purpose of TDS.

B. Manner of Calculation of Interest u/s 50(3) of CGST Act,2017

Clarification regarding the Manner of Calculation of Interest amount liable to be paid u/s 50(3) of CGST Act, 2017 in respect of Wrongly availed and Utilized IGST credit interalia Wrong availment of IGST Credit, the balance of ITC in electronic credit ledger under head IGST, CGST and SGST taken together must be taken into the consideration while calculating interest as per Rule 88B of CGST Rules, 2017.

The 50th gst council meeting 2023 has decided to clarify the issue of security of subsidiaries held by holding company cannot treated as supply of services and not liable for GST.

It is the mere holding of securities, does not involve any supply so no GST will be applicable on the same.

D. Proposal to issue circular for verification of ITC in case of Difference between GSTR-3B & GSTR-2A for the FY 2019-20 and 2020-21.

The 50th GST Council Meeting 2023 has decided to issue the circular clarifying the procedure for verification of ITC in case of Difference in ITC availed in GSTR-3B and GSTR-2A for the FY 2019-20 and 2020-21.

Earlier the government issued circular No.183/15/2022 dated 27-12-2022 in 48^th GST Council meeting regarding procedure for verification of ITC in case of difference in ITC availed in GSTR-3B and ITC available in GSTR-2A for the FY 2017-18 and 2018-19.

Hence to provide relief to taxpayers the council has recommended such a circular to remove future litigation which may arise due to such a mismatch.

E. Special procedure to file manual appeal

It has been proposed in the 50th GST Council Meeting 2023 that special procedure is to be provided to file manual appeal for order passed by the officers in respect of TRAN-1 / TRAN -2 by registered person on the direction of Hon’ble Supreme Court in case of Union of India V/s Filco Trade Centre Pvt Limited.

In the reference to the above special procedure for filling of manual appeal Rule 108(1)(Appeal to appellate authority) and Rule 109(1)(Application to appellate authority) of CGST Rules,2017 are also to be amended by the Council

F. Extension of Amnesty schemes

The 50th GST Council Meeting 2023 recommended to extend amnesty scheme provided dated 31-03-2023 to GSTR-4, GSTR-9, GSTR-10 , revocation of cancellation and deemed withdrawal of assessment order issued u/s 62 of CGST Act,2017.

• Our Analysis

Government has provided amnesty scheme to provide relief to taxpayers provided amnesty are as follows:

For GSTR-4

Regarding waiver and reduction of late fees – to avail the amnesty scheme, composition dealer must file return for Quarter July-17 to march-19 or for the FY 2019-20 to 2021-22 by 01-04-2023 to 30-06-2023.

Now, this period 01-04-2023 to 30-06-2023 to furnish the GSTR-4 for above period is to be extended by 31-08-2023.

Composition Taxpayer can furnish the return for Quarter July-17 to march-19 or for the FY 2019-20 to 2021-22 by 31-08-2023 as per this 50th GST Council Meeting 2023.

Reduction of late fees – to avail the amnesty scheme benefit one has to file GSTR-9 by 01-04-2023 to 30-06-2023 for the period of 2017-18, 2018-19, 2019-20, 2020-21 or 2021-22.

Now, this period 01-04-2023 to 30-06-2023 to furnish GSTR-9 for the above FYS is to be extended by 31-08-2023 as per this 50th GST Council Meeting 2023

GSTR-9 for the period of 2017-18, 2018-19, 2019-20, 2020-21 or 2021-22 can filed up to 31-08-2023 as per this 50th GST Council Meeting 2023

For GSTR-10:

Waiver of late fees – to avail amnesty scheme benefit, one must file GSTR-10 by 01-06-2023 to 30-06-2023.

Now this period of 01-06-2023 to 30-06-2023 is to be extended by 31-08-2023 as per this 50th GST Council Meeting 2023

Deemed withdrawal of assessment orders:

assessment order shall deem to be withdrawn with condition that return furnished by registered person on or before 30-06-2023 along with interest u/s 50 and late fees u/s 47.

Now this period to furnish the return is to be extended by 31-08-2023 as per this 50th GST Council Meeting 2023

Registered person whose registration is cancelled u/s 29(2) (b) or (c) on or before 31-12-2022 and who failed to apply for revocation of cancellation of registration within specified time can apply for revocation of cancellation of registration by 30-06-2023.

Now this time for application of revocation is to be extended by 31-08-2023.

Registered person can apply for revocation of cancellation up to 31-08-2023

Due date to furnish returns in state of Manipur:

As per Notification No. 14/2023, 15/2023, and 16/2023 dated 19-06-2023 following due dates has been extended in state of Manipur.

Measures for streamlining Compliances in GST|GST Council Meeting 2023

A. E-way Bill Requirement for movement of Gold/Precious Stones

The 50th gst council 2023 has decided to insert Rule 138F in CGST Rules, 2017 which mandates the requirement to generate e-way bills for intra state movement of gold and precious stone under chapter 71 within their states.

B. Recommendations by GOM for Special Composition scheme

Based on the recommendations of GOM in 49^th GST Council Meeting 2023, following changes are proposed:

Issuance of notification u/s 148 of CGST Act, 2017 for manufacturer of tobacco, pan masala and other similar items for special procedure regarding registration of machines and for filling of special monthly returns.

Insertion of section 122A for Special penalty for non-registration of machines by manufacturers.

C. Section 123 of Finance Act, 2021 to be notified w.e.f. 01.10.2023

Section 123 of Finance Act, 2021 amended Section 16 of IGST Act, mentioning that notified person will be able for Zero Rated supply of notified goods or services on payment of Integrated Tax. But this Section still has not been notified.

Now Section 123 of the Finance Act 2021 is going to be notified w.e.f. 01-10-2023.

As well it has been recommended to issue notification u/s 16(4) of IGST Act 2017 to provide restriction on IGST refund route for exports of tobacco, pan masala and other similar items as well as mentha oil effective from 01-10-2023.

D. Amendment in CGST Rules regarding Registration

The 50th gst council meeting 2023 has proposed an amendment to strengthen the registration process and to deal more effectively with fake and fraudulent registrations in GST.

Rule 10A amendment: to provide bank details in name of PAN of the registered person within 30 days from grant of registrations or before filling of statement of outward supply u/s 37 of CGST Act in GSTR-1/IFF, whichever is earlier.

Rule 21A(2A) amendment: it is related to system-based suspension of registration who do not provide bank details under rule 10A within prescribed time limit.

Insertion of 3^rd proviso in Rule 21A (4): it is related to automatic revocation of system-based suspension on the compliance with rule 10A.

• Rule 59(6) amendment: the registered person may not be allowed to file GSTR-1 or using IFF on the failure to provide valid bank account number under Rule 10A.
• Rule 9 & Rule 25 amendment:

At present rule 25 states that physical verification can done in following situation

1. In case of not opting of aadhar authentication or failure of aadhar authentication
2. Due to any other reason after granting registration.

In the above cases aadhar authentication is done in presence of applicant.

Now, the 50th gst council meeting 2023 has proposed to change rule 25 of CGST Rules, 2017 by removing such condition of presence of applicants for physical verification.

In short, physical verification may be conducted without the presence of applicant at such place.

Risk-based biometric-based Aadhar Authentication

Pilot to be conducted in Union territory of Puducherry for risk based aadhar authentication of registration applicants. The Andhra Pradesh also expressed its intent to join this test after system ‘s readiness is tested in state of Gujarat and UT of Puducherry

E. Recovery of Tax and interest

1. Rule 88 C of CGST Rules 2017 states that when liabilities disclosed in GSTR-1 exceeds the liabilities disclosed in GSTR-3B system-based intimation will be sent to registered person as per 48^th GST Council meeting.
2. In the 50th GST council meeting 2023, it is recommended to insert Rule 142A and FORM GST DRC-01D to provide a manner of recovery of tax and interest for the amount that has not been paid or no satisfactory explanation is being received.

F. Mechanism to deal with mismatches between ITC disclosed in GSTR-3B and GSTR-2B.

The 50th gst council meeting 2023 has proposed inserting Rule 88D and FORM DRC-01C to reduce ITC Mismatches between GSTR-3B and GSTR-2B. It helps to reduce misuse of ITC in GST.

The 50th gst council meeting 2023 also recommended the mechanism for system-based intimation to taxpayers in case of excess availment of ITC in FORM GSTR-3B compared to GSTR-2B.

Taxpayers must explain the reasons for the said differences or take actions in respect of such differences.

G. Measures to improve discipline in filling GSTR-9/9A.

To improve accuracy and maintain discipline in filling return, Council has proposed to amend FORM GSTR-3A for issuing notice to registered taxpayers for failure in furnishing return of GSTR-9 & 9A by due date.

H. OIDAR Service Providers to give more information on GSTR-5A.

Council has decided to amend FORM GSTR-5A and Rule 64 of CGST Rules, 2017 which requires OIDAR service providers to provide the details regarding supplies made to registered person in India in his return in GSTR-5A.

This will help in tracking due payment of tax on RCM basis by registered person in India in respect to service received from OIDAR.

I. Explanation for Duty Free Shops for exempt supply.

The 50th GST Council Meeting 2023 has decided to be inserted Explanation-3 after rule 43 of CGST Act,2017 for any goods from Duty free shop at arrival terminal in international airports to incoming passengers to be included in value of exempt supplies for the purpose of reversal of ITC.

J. Compounding amount for offences under Section 132

Sub rule 3A to be inserted in rule 162 of CGST Rules, 2017 for prescribing compounding amount of offences u/s 132 of CGST Act, 2017.

K. Data shared on the Common Portal

The 50th gst council meeting 2023 has recommendation to insert rule 163 in CGST Rules, 2017 for manner and conditions for consent-based sharing of information of registered person available on the common portal with other systems.

The 50th gst council meeting 2023 has also recommended issuance of notification u/s 158A for notifying Account Aggregators as the systems with which information is to be shared by the common portal.

L. Place of supply

Council has decided to Insertion of Clause (ca) in sub section (1) of section 10 of IGST Act to clarify place of supply in case supply of goods to Unregistered person.

M. State level Coordination Committee

50th GST Council Meeting 2023 has proposed to form state level coordination committee which comprises of GST officers from both state and central GST administrations for knowledge sharing the GST matters and coordinated efforts towards administrative and preventive measures.

N. IT Systems Reforms

GOM has recommended various measures to control frauds in GST through system-based measures for strengthening registration process in GST, more use of third-party data for risk management and controlling flow of fake ITC down the supply chain.

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