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Recommendations Of 53rd GST Council Meeting admin July 4, 2024

Recommendations Of 53rd GST Council Meeting

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Recommendations of 53rd GST Council Meeting

This is to update you that the 53rd meeting of the GST council was concluded on 22 June 2024 in New Delhi. The key recommendations made by the Council in the meeting are summarized below for your ready reference:

1. Reduction in TCS Rate: 
TCS Rate to be reduced from current 1% to 0.5% of net taxable supplies for supplies made by ECOs (Electronic Commerce Operators)

2. Waiver of interest and/or penalty for demand raised u/s 73 FY 2017-18, 2018-19, and 2019-20- 
CGST Act to be amended to provide for waiver of interest or penalties or both in relation to demands raised under Section 73 (non-fraud cases only) for the FY 2017-18, 2018-19, and 2019-20 provided the tax demanded has been paid in full before 31 March, 2025.

Please note that such waiver does not cover demands relating to erroneous refunds.

3. Common time limit for issuance of demand notices and orders-
CGST Act to be amended to provide for the following:
  •  A common time limit for issuance of demand notices and demand orders irrespective of whether case involves fraud, suppression, willful misstatement etc., or not ( for FY 2024-25 onwards)
  • The time limit for taxpayers to avail the benefit of reduced penalties to be extended from the current 30 days to 60 days by paying the tax and interest demanded.
4. Extension in time limit to avail ITC for FY 2017-18, 2018-19, 2019-20 and 2020-21-
Retrospective amendment to be made in the law to extend the time limit to avail ITC, through any GSTR-3B return filed up to 30 November 2021 for the FY 2017-18, 2018-19, 2019-20 and 2020-21.

5.Time limit for availment of ITC on reverse charge procurements-
To provide clarification in cases of reverse charge procurements from unregistered suppliers, the relevant financial year for calculation of time limit for availment of ITC under the provisions of section 16(4) of CGST Act is the financial year in which the self invoice is raised by the recipient.

6. Import of services by a related domestic entity from its foreign affiliate-
Clarification to be issued in respect of valuation of import of services by a related domestic entity from its foreign affiliate- In cases where full ITC is available to the related domestic entity, the value declared in the invoice may be deemed as the open market value.

Further, in cases where the related domestic entity has not issued any invoice for services provided by the foreign affiliate, the value of such services may be deemed to be declared as Nil and the same shall be deemed to be the open market value (provided full ITC is available to the related domestic entity).

7. Interest on delayed filing of returns- 
Interest not to be levied in case where the amount is available in the Electronic Cash Ledger on the due date of filing GSTR-3B (and is debited while filing the said return), in case there is a delay in filing of such GSTR-3B.

8. Time for filing appeals in GST Appellate Tribunal-
A period of three-months to be allowed for filing appeals before the Appellate Tribunal starting from a date to be notified for any order passed before issuance of the relevant notification.

9. Fixing monetary limits for filing appeals under GST-
For filing of appeals by the department before GST Appellate Tribunal, High Court, and Supreme Court, the following monetary limits have been recommended:
•             Tribunal: INR 20 lakhs
•             High Court: INR 1 crore
•             Supreme Court: INR 2 crore

10. Reduction in amount of pre-deposit for appeals under GST-      
  • The maximum amount for filing an appeal with the appellate authority to be reduced from INR 25 crores under CGST and SGST each to INR 20 crores under CGST and SGST each.
  • Further, the amount of pre-deposit for filing appeal with the Appellate Tribunal to be reduced from 20% (with a maximum amount of INR 50 crores under CGST and SGST each)  to 10 % (with a maximum of INR 20 crores under CGST and SGST each).
11. Valuation of corporate guarantee arrangements between related persons- 
Rule 28(2) of CGST Rules and circular no. Circular No. 204/16/2023-GST dated 27 October 2023 to be amended retrospectively to provide for non-applicability of valuation rules in case of corporate guarantee arrangements between related persons in the following scenarios:
·       Exports of services by way of providing corporate guarantees,
·       In cases where the recipient is eligible for full input tax credit.

12. Biometric based Aadhaar Authentication-
Nationwide Rollout of biometric-based Aadhaar authentication for GST registration applications in a phased manner.

13. Other key recommendations-  
  • CGST Act to be amended retrospectively w.e.f. 1 October 2023 to clarify that penal provision u/s 122(1B) is applicable only for those e-commerce operators, who are required to collect tax under section 52 of CGST Act, and not for other e-commerce operators.
  • Insertion of new Section 11A in the CGST Act to give powers to the Government, on the recommendations of the Council, to allow regularization of non-levy or short levy of GST, where tax was being short paid or not paid due to common trade practices.
  • Rules to be amended  and a circular to be issued to prescribe a mechanism for adjustment of payment of demand through FORM GST DRC-03 against pre-deposit to be made for filing appeal.
  • CGST Act to be amended to introduce sunset clause for anti-profiteering and handling of anti profiteering cases by Principal bench of GST Appellate Tribunal (GSTAT). The sun-set date of 01 April 2025 for receipt of any new application regarding anti-profiteering.
  • A new return in Form GSTR-1A to be introduced to allow amendments/adjustments in GSTR-1 for a tax period and/ or to declare additional details, before filing of return in GSTR-3B for the said tax period and freezing of outward liability of GSTR-3B basis GSTR-1 filed by the taxpayer
  • To exempt filing of annual return for FY 2023-24 for taxpayers having aggregate annual turnover up to INR 2 crores.
  • Reduction in threshold for reporting of invoice-wise B2C inter-State supplies in Table 5 of GSTR-1 from INR 2.5 lakhs to INR 1 lakh.
  • A mechanism for claiming refund of additional IGST paid on account of upward revision in price of the goods subsequent to their export to be prescribed.
  • It has been proposed that the invoice-wise details may be required to be furnished in the FORM GSTR-7 return (TDS return).
14. Issues on which clarifications to be issued-         
  • Taxability of reimbursement of securities/shares as ESOP/ESPP/RSU provided by a company to its employees.
  • Warranty/ Extended Warranty provided by Manufacturers to the end customers.
  • Taxability of loans granted between related person or between group companies.
  • Time of supply in respect of allotment of Spectrum to Telecom companies in cases where payment of license fee and Spectrum usage charges is to be made in instalments.
  • Place of supply in cases where goods are supplied to unregistered persons, where delivery address is different from the billing address.
Mechanism for providing evidence by the suppliers for compliance of the conditions of Section 15(3)(b)(ii) of CGST Act, 2017 in respect of post-sale discounts, to the effect that ITC has been reversed by the recipient on the said amount

15. Recommendations relating to GST Rates on Goods/ Services-     ·
  • Milk cans whether of steel, iron and aluminum to attract 12% GST irrespective of their use.
  • GST rate on ‘carton, boxes and cases of both corrugated and non-corrugated paper or paper-board’ to be reduced from 18% to 12%.((HSN 4819 10, 4819 20)
  • Solar cookers to attract 12% GST rate whether single source or dual source
  • To regularize the past practice on ‘as is where is’ basis in view of genuine interpretational issues, it is clarified that all sprinklers including fire water sprinklers will attract 12% GST.
  • To exempt Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorized operations w.e.f. 01 July 2017.
  • To create a separate entry in notification No. 12/2017-CT(R) dated 28.06.2017 under heading 9963 to exempt accommodation services having value of supply of accommodation up to Rs. 20,000/- per month per person subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days. To extend similar benefit for past cases as well.

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