Major Takeaways from

53rd GST Council Meeting - 22nd June 2024

Khandhar Mehta & Shah

Chartered Accountants
Key Points

Relaxation in Conditions of Section 16(4) for availing Input Tax Credit (ITC)

Amnesty Scheme for waiver of Interest and Penalty for SCN issued u/s 73

No Interest on GST Paid from the balance in Electronic Cash Ledger (ECL)

Recommendations related to filing of GST Appeal

Changes in GST Rates of Services

Changes in GST Rates of Goods

Other Important Recommendations

Clarifications proposed
Relaxation in Conditions of Section 16(4) for availing ITC
Relaxation in Condition of Section 16(4) for availing ITC

Extension to avail ITC for Time limit to avail ITC for any tax invoice under Section 16(4) for FYs 2017-18,
2018-19, 2019-20 and 2020-21 is extended to 30th November 2021. This
FY 2017-18 to 2020-21 provision shall be applicable retrospectively from 1st July 2017.

GST Council recommended to allow conditional relaxation in time limit to claim

Benefit for GSTR-3B filed ITC u/s 16(4) in cases where returns for the period from the date of cancellation
after Revocation of of registration till the date of revocation of cancellation of the registration, are
Cancellation filed by the registered person within 30 days of the order of revocation. This
provision shall be applicable retrospectively from 1st July 2017.

Clarification on time limit GST Council recommended to clarify that where GST is payable under RCM by
the recipient on the supplies received from unregistered suppliers, the relevant
to avail ITC on GST paid financial year for the time limit to avail ITC as per Section 16(4) will be the
under RCM financial year in which the Self-invoice is generated by the recipient.
Extension to avail ITC for the FY 2017-18 to 2020-21

Original Last Date Extended Date

Financial Year
to avail ITC to avail ITC
2017-18 23-04-2019
2018-19 20-10-2019
30th November 2021
2019-20 24-10-2020
2020-21 24-10-2021

Example:

ITC of ITC Availed in Date of filing Original Last Date Extended Date Extended date benefit
Financial Year GSTR-3B of GSTR-3B to avail ITC to avail ITC for taking ITC u/s 16(4)
2017-18 Apr'19 20-05-2019 23-04-2019 30-11-2021 Available
2017-18 Apr'19 26-10-2019 23-04-2019 30-11-2021 Available
2020-21 Oct'21 25-10-2021 24-10-2021 30-11-2021 Available
2020-21 Oct'21 01-12-2021 24-10-2021 30-11-2021 Not Available
Benefit for GSTR-3B filed after Revocation of Cancellation
 Retrospective amendment effective from 1st July 2017 in Section 16(4) is recommended to allow conditional relaxation in cases where
returns for the period from the date of cancellation of registration till the date of revocation of cancellation of the registration, are filed
by the registered person within thirty days of the order of revocation.

 Example:

(1) GST registration of an entity was cancelled by the GST Department on 1st June 2024.
(2) Revocation order for this cancellation was received on 31st December 2024.
(3) According to Section 16(4), the last date to claim Input Tax Credit (ITC) for the Financial Year 2023-24 is 30th November 2024.
(4) However, as per this recommendation effective from 1st July 2017, the business can now claim ITC up to 30th January 2025,
provided the returns for that period are filed within 30 days from the order of revocation, i.e., by 30th January 2025.

Events Date
Registration Cancelled by Department 01-06-2024

Revocation Order received for Cancellation of GST Registration 31-12-2024

Original Last date to avail ITC u/s 16(4) for FY 2023-24 in above example 30-11-2024
Extended Last date to avail ITC u/s 16(4) for FY 2023-24 in above example 30-01-2025
Time Limit for Availing ITC of GST paid under RCM
 GST Council recommended to clarify clarifying that in cases where supplies are received from unregistered suppliers, and tax is
required to be paid by the recipient under RCM, the financial year relevant for calculating the time limit to avail input tax credit (ITC)
under section 16(4) of the CGST Act is the financial year in which the recipient issues the invoice.

 Example:

(1) XYZ Ltd. is a company engaged in the manufacture of auto components and makes various foreign payments.
(2) In April 2018, XYZ Ltd. received invoices from a foreign company. However, IGST payable under RCM was not paid
on these transactions.
(3) Upon discovery, IGST was paid in September 2020, and XYZ Ltd generated a self-invoice during the Financial Year 2020-21.
Now, XYZ Ltd. can claim ITC till due date for filing the return for September 2021 since the self-invoice was issued in FY 2020-21.

Event Date
XYZ Ltd. received invoices for import of services April - 2018
IGST payment made by M/s. XYZ Ltd. for the Invoice in Sept - 2020
Issued a self-supply invoice in FY 2020-21
ITC can be availed before the due date for filing the return of September 2021 20th October 2021
Amnesty Scheme for waiver of Interest & Penalty for
SCN issued u/s 73
Waiver of Interest and Penalty for 2017-18 to 2019-20
GST Council recommended to insert Section 128A in CGST Act : To provide conditional waiver of interest or
penalty or both, relating to demands raised under Section 73, for FY 2017-18 to FY 2019-20

Waiver of Interest and Penalty Applicable to

Notice issued u/s 73 of CGST Act, 2017 for the FY 2017-18, 2018-19 and 2019-20

Benefit Available under the Scheme

Waiver of Interest and Penalties

Conditions to be fulfilled
Tax demanded to be paid in full upto 31.03.2025
Note: Waiver u/s 128A will not be available to:
(i) the notices issued u/s. 74 and
(ii) for refund related demands (either u/s. 73 or u/s. 74)
Benefit of Amnesty Scheme in different Scenarios
Benefit of Amnesty Scheme in different Scenarios for SCN Issued u/s 73 and 74

Section 73 Section 74
Financial
Time Limit to Benefit of Time Limit to Benefit of
Year
Issue SCN Amnesty Scheme ? Issue SCN Amnesty Scheme ?
2017-18 30-09-2023 07-08-2024
2018-19 31-01-2024 Available 30-06-2025
(If Tax Paid upto 31.03.2025)
2019-20 31-05-2024 30-09-2025
2020-21 30-11-2024 Not Available 31-08-2026 Not Available
2021-22 30-09-2025 Not Available 30-06-2027
2022-23 30-09-2026 Not Available 30-06-2028
2023-24 30-09-2027 Not Available 30-06-2029

Note:
The benefit of amnesty scheme is not available for SCN related to erroneous refunds, even if SCN issued u/s 73.
No Interest on GST paid from the balance in
Electronic Cash Ledger (ECL)
GST Payment via Balance in ECL: No Interest
 To ease the interest burden of the taxpayers, GST Council recommends amendment in Rule 88B to not levy interest u/s 50 of CGST Act
in case of delayed filing of return, on the amount which is available in Electronic Cash Ledger (ECL) on the due date of filing of the said
return.

 Example: To understand the impact of the GST Council's recommendations on interest calculation, consider the following example.

Ms. XYZ Limited did not file GSTR-3B for the month of April 2024 on the due date i.e., 20-05-2024. The interest implications based on
the GST Council's recommendation are as follows if the GSTR-3B is filed on 31-05-2024:

# Particulars Case 1 Case 2

1 Balance in Electronic Cash Ledger on due date Rs. 50 Crore Rs. 40 Crore
2 GST Liability for the Month of April 2024 payable in Cash Rs. 80 Crore Rs. 35 Crore
3 Interest to be calculated on Rs. 30 Crore -
(Rs. 80 Crore less Rs. 50 Crore)
4 Delay in filing (In Days) 11 Days 11 Days
5 Interest @ 18% Rs. 16.27 Lacs N.A.
[30 Crore * 18% * 11/365]
Recommendations related to filing of GST Appeal
Reduction in Pre-deposit for filing of Appeals
Commissioner (Appeals) u/s 107 GST Tribunal u/s 112
#
(i.e., 1st Stage of Appeal) (i.e., 2nd Stage of Appeal)

Existing
percentage of 10% of GST demand Additional 20% of GST demand
[Maximum upto Rs. 50 crores (CGST + SGST / IGST)] [Maximum upto Rs. 100 crores (CGST + SGST / IGST)]
Pre-deposit

Proposed
percentage of 10% of GST demand Additional 10% of GST demand
[Maximum upto Rs. 40 crores (CGST + SGST / IGST)] [Maximum upto Rs. 40 crores (CGST + SGST / IGST)]
Pre-deposit
Reduction in Pre-deposit for filings of Appeals
 Example : GST Department issued an order demanding GST, Interest and Penalty as under and the appellant is
contesting Tax demanded, Interest as well as penalty levied:
# Particulars CGST SGST TOTAL
1 Tax Amount 210 Crores 210 Crores 420 Crores
2 Interest 10 Crores 10 Crores 20 Crores
3 Penalty u/s 74 210 Crores 210 Crores 420 Crores
4 Total Demand 430 Crores 430 Crores 860 Crores

 Mandatory pre-deposit for filing of appeal at the specific levels can be summarized as below :

# Particulars Existing % of Pre-deposit Proposed % of Pre-deposit

Rs.42 Crores Rs.40 Crores
If Appeal is to be filed u/s 107 before
1 [Lower of: 10% of 420 crores or [Lower of: 10% of 420 crores or
Commissioner (Appeals) (i.e., 1st Stage of Appeal)
Maximum Rs.50 crores] Maximum Rs.40 crores]
Rs.84 Crores Rs.40 Crores
If Appeal is to be filed u/s 112 before the GST [Lower of: 20% of 420 crores or [Lower of: 10% of 420 crores or
2
Tribunal (i.e., 2nd Stage of Appeal) Maximum Rs.100 crores] Maximum Rs.40 crores]
Recommendations related to Appeal filing procedure
Other Recommendations

 GST Council recommends amending provisions of CGST Act to provide that the three-month period for filing
appeals in GST Appellate Tribunal will start from a date to be notified by the Government

 Government to prescribe a mechanism for adjusting an amount paid through DRC-03 against the amount to be
paid as pre-deposit for appeal.

 Amendments in Section 73 and Section 74 of CGST Act, 2017 and insertion of a new Section 74A in CGST Act, to
provide for common time limit for issuance of demand notices and orders irrespective of whether case involves
fraud, suppression, willful misstatement etc., or not.

 Time limit to avail the benefit of reduced penalty, by paying the tax demanded along with interest, has been
recommended to be increased from 30 days to 60 days.
Other changes proposed
Monetary Limit to be prescribed for filing of appeal by department as under:

Authority Monetary Limits

GST Appellate Tribunal 20 Lakhs
High Court 1 Crore
Supreme Court 2 Crore

Section 11A to be inserted in CGST Act, 2017:

 This will give the Government the power, based on the recommendations of the GST Council, to waive the recovery of
GST that was not levied or was under-levied due to common trade practices.

(In Simple Words, If businesses did not pay enough GST or did not pay GST at all because they were following common
practices in the industry, the Government will have the authority to officially waive the requirement to recover these
unpaid taxes. This means businesses won't be penalized for not paying GST in situations where it was a common
practice not to do so, as long as the GST Council agrees.)
Changes in GST Rates of Services
GST Applicability of Hostel / PG Services

GST Council recommends exemptions for providing relief to students and working professionals provided that 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 (Proposed to apply from retrospective basis).

Period
From Retrospective
# Description From 01-07-2017
Accommodation Service 18-07-2022 Exemption wef
to 17-07-2022
onwards 18.07.2022
Room Rent per month per person upto Rs. 20,000/-
1 Exempt 12% Exempt
for Minimum continuous period of 90 Days
Room Rent per month per person more than Rs. 20,000/-
2 Exempt 12% 12%
for Minimum continuous period of 90 Days
Changes in Rate of Services
Change in Rate of Services proposed in relation to Railway, Banking and Real Estate Industry:

Industry Category Description Taxability

Sale of platform tickets, retiring rooms/waiting
General Public Services rooms, cloak room services, and battery-operated Exempt
car services
Railway Industry Transactions between two railway entities /
Intra-Railway transactions Exempt
corporation etc.
Services by SPVs to Indian Infrastructure use during concession periods and
Exempt
Railways maintenance services
Sharing of incentive by acquiring bank with other
stakeholders under the Incentive scheme for Not Taxable under
Banking Industry Sharing of incentives
promotion of RuPay Debit Cards and low-value Schedule - III
BHIM-UPI transactions
Real Estate Industry Statutory collections by Real Estate Regulatory Authority (RERA) Exempt
Changes in Rate of Services – Insurance Industry

Category Description Classification/Notification Effective Dates

Premiums apportioned between

‘No Supply’ under Schedule III of the
Co-insurance premiums lead insurers and co-insurers in -
CGST Act, 2017
coinsurance agreements

Ceding commission/re- Transactions involving commission ‘No Supply’ under Schedule III of the
-
insurance commission between insurers and reinsurers CGST Act, 2017

Reinsurance services for Sr. Nos. 35 & 36, Notification No. 01.07.2017 to
Services regularized
specified insurance schemes 12/2017 24.01.2018

Reinsurance services for

01.07.2017 to
government-paid premium Services regularized Sr. No. 40, Notification No. 12/2017
26.07.2018
schemes
Retrocession (re-insurance of
Eligible for exemption Sr. No. 36A, Notification No. 12/2017 -
re-insurance)
Changes in GST Rates of Goods
Changes in Rate of Goods
Reduction in GST Rate of Goods :

Sr. Description of Goods Existing Rate Proposed Rate

Imports of Parts, components, testing equipment, tools and tool-kits of
1 aircrafts (irrespective of their HSN classification) to provide a fillip to Any Rate 5%
MRO activities subject to specified conditions.
2 All milk cans (of steel, iron and aluminium) irrespective of their use 18% 12%
Carton, boxes and cases of both corrugated and non-corrugated paper
3 18% 12%
or paperboard ((HSN 4819 10; 4819 20)

Clarifications provided for GST Rate of Goods :

Sr. Description of Goods

1 All solar cookers whether single or dual energy source, will attract 12% GST.
Poultry keeping Machinery attracting 12% GST to specifically incorporate “parts of Poultry keeping
2
Machinery” and to regularize past practice on ‘as is where is’ basis.
All types of sprinklers including fire water sprinklers will attract 12% GST and to regularize the past practice
3
on ‘as is where is’ basis.
Exemptions on below goods have been provided/extended

1. Import of research equipment/buoys imported under the Research Moored Array for African-Asian-Australian
Monsoon Analysis and Prediction (RAMA) programme subject to specified conditions

2. Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorized operations w.e.f. 01.07.2017.

3. Rectified Spirit/Extra Neutral Alcohol (ENA) is not subject to GST when it is used to manufacture alcoholic liquors
for human consumption. This recommendation involves amending sub-section (1) of Section 9 of the CGST Act,
2017, to explicitly exclude ENA from GST in this context.

4. Related to Defence sector :

 Compensation cess on supply of aerated beverages and energy drinks to authorized customers by Unit Run
Canteens under Ministry of Defence
 Imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces.
 Imports of specified items for defence forces for a further period of five years till 30th June, 2029.
Other Important Recommendations
GSTR-1A - A New functionality in return filing system

 GST Council has recommended to introduce a new optional facility of filing of FORM GSTR-1A.

 This facility allows taxpayers to amend / add details in FORM GSTR-1 filed for a specific tax period, if necessary,
before filing the return in FORM GSTR-3B for that period.

 This option will enable taxpayers to add any missed supply details for the current tax period or amend already
declared in FORM GSTR-1 (including those declared in the IFF for the first and second months of a quarter for
quarterly taxpayers). This ensures that the correct liability is auto-populated in FORM GSTR-3B.

Optional filing to Add/ amend

Outward supply particulars
Filing of GSTR-1 Filing of GSTR-1A
11th 12th - 20th

Auto-population of Outward Auto-population of amended

supply Filing of GSTR-3B or additional supply
20th
Exemption for Filing of Annual Return (GSTR-9/9A)

The Council recommended that filing of annual return in FORM GSTR-9/9A for the FY 2023-24 may be exempted for
taxpayers having aggregate annual turnover upto two crore rupees.

2017-18 2018-19 2019-20 2020-21 2021-22 to 2023-24

Turnover
GSTR-9 GSTR-9C GSTR-9 GSTR-9C GSTR-9 GSTR-9C GSTR-9 GSTR-9C GSTR-9 GSTR-9C
≤ 2 Cr. × - × - × - × - × -
2-5 Cr. ✓ ✓ ✓ × ✓ × ✓ × ✓ ×
> 5 Cr. ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
GSTR-9C
CA/CWA Certification CA/CWA Certification CA/CWA Certification Self-Certification Self-Certification
Certification
05-02-2020/
Due Date 31-12-2020 31-03-2021 28-02-2022 31st Dec of Next FY
07-02-2020
GST applicability on Corporate Guarantee
Personal Guarantee Corporate Clarifications issued in Council Meeting
by Directors Guarantee
 The Rule for valuation of Corporate guarantee i.e.,
Rule 28(2) shall be applicable w.e.f. 26.10.2023.
Whether
Whether
consideration paid or  The said valuation Rule shall not be applicable in
consideration paid?
not the following cases:

1. In case of export of services where corporate

Value of supply shall be higher guarantee is provided to a related Indian
No Yes
of 1% Guarantee Amount OR company to related company outside India.
Actual Consideration Charged
2. In case corporate guarantee is provided to
related company in India where full ITC is
available to recipient company
Value of Supply Value of supply shall GST Payable
may be ZERO be consideration paid @ 18%
In both the above exceptions, transaction value
declared by supplier of service (may be NIL) shall
No GST be considered for the valuation purpose in GST.
Payable
Import of service in case by Foreign Affiliate

Service Provider Service Recipient ITC available Invoice issued GST Valuation
Value declared shall be considered as
Outside India In India Yes Yes
open market value i.e., proviso Rule 28(1)
Nil value shall be considered as open
Outside India In India Yes No
market value i.e., proviso to Rule 28(1)
Outside India In India No Yes Value shall be calculated considering
Outside India In India No No Rule 28(1) i.e., open market value
Other Important Recommendations

1. Any new application for Anti-profiteering can be filed upto 31-03-2025.

2. It is proposed to change the due date for filing of Form GSTR-4 by Composition Taxpayer from 30th Apr to 30th June.

3. Allow additional refund in case of upward revision in price of goods subsequent to export.

4. Rolling out of bio-metric based Aadhaar authentication on All-India basis in phased wise manner.

5. Threshold limit for reporting of B2C inter-state supply invoice-wise in GSTR-1 has recommended to reduce Rs. 1 Lakh
from Rs. 2.5 Lakhs.

6. TDS deductor has required to file monthly GSTR-7 even if no Tax has been deducted in the month. No late fees shall
be payable in case of delayed filing of Nil GSTR-7.
Clarifications proposed
Certain matters on which Clarifications are proposed

1. Clarification on taxability of re-imbursement of securities/shares as ESOP/ESPP/RSU provided by a company to its

employees

2. Clarification on requirement of reversal of input tax credit in respect of amount of premium in Life Insurance
services, which is not included in the taxable value as per Rule 32(4) of CGST Rules.

3. Clarification on taxability of wreck and salvage values in motor insurance claims

4. Clarification in respect of Warranty/ Extended Warranty provided by Manufacturers to the end customers

5. Clarification regarding availability of input tax credit on repair expenses incurred by the insurance companies in
case of reimbursement mode of settlement of motor vehicle insurance claims.

6. Clarification on taxability of loans granted between related person or between group companies.

7. Clarification on time of supply on Annuity Payments under HAM Projects.

Contd…

8. Clarification regarding 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.

9. Clarification relating to place of supply of goods supplied to unregistered persons, where delivery address is
different from the billing address

10. Clarification on 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 input tax credit has been reversed
by the recipient on the said amount.

11. Clarifications on various issues pertaining to special procedure for the manufacturers of the specified
commodities, like pan masala, tobacco etc.

12. Council recommended to clarify that place of supply of Custodial services supplied by Indian Banks to Foreign
Portfolio Investors is determinable as per Section 13(2) of the IGST Act, 2017.
 Khandhar Mehta & Shah
Chartered Accountants
Phone: +91 79 26461526
Email: [email protected]; [email protected]

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Off C G Road, Navrangpura,
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Gujarat - India

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Gujarat - India

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The information contained herein is intended for general guidance only. It shall not be used as a substitute of professional advice. Before acting on any
matters contained herein, reference should be made to press releases, circulars or any other publications issued by respective authorities. Khandhar Mehta &
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