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A Complete Guide of GST Updates in June 2022

  • Posted By SuperCA
  • On 01 July

A Complete Guide of GST Updates in June 2022

All About GST Updates

The 47th GST Council’s meeting was held in Chandigarh on 28th and 29th June 2022 under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. This week marked half a decade of the country's biggest reform in the indirect tax system and at the same also marked several recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure.

The GST Act came into operation in 2016 and its implementation of the same began on July 1, 2017. A variety of indirect taxes previously levied by central and state governments like VAT, Service Tax, Local Body Tax, Central Excise duty, Central Sales Tax Purchase Tax, Luxury Tax, Entry Tax, Octroi, etc. have been compiled and accumulated under GST.

Key Highlights of the 47th Council Meeting

➤ Amendments in GSTR-3B Monthly Return have been allowed. Further, auto-population of most details in Form GSTR-3B and annual returns in Form GSTR-9 has been permitted for better compliance and ease in compliance. A proposal for comprehensive alterations in GSTR-3B will be placed before the public for seeking input.
➤ GSTR 9 shall continue with some relaxations and modifications.GSTR-9 and GSTR-9A will continue to not be applicable to those with threshold turnover below Rs.2 crore for FY 2021-22.
➤ States headed by the opposition have pushed for either an extension of the GST compensation system or an increase in the states' percentage of revenue from the present 50%. In the meeting, the Council accepted the interim report on rate rationalization, which included correcting the inverted duty structure and eliminating the tax exemption on some items in order to simplify the rate structure, from the group of state finance ministers led by Karnataka Chief Minister Basavaraj S Bommai. 
➤  The GOM has proposed removing the GST exemption from a certain variety of services.
➤  While permitting states to issue an e-way bill for the intra-state movement of gold and precious stones, authorities said the GST Council authorized modifications to tax rates on specific items and services. Along with approving a GOM report on high-risk taxpayers to avoid cheating, the Council, presided over by Finance Minister Nirmala Sitharaman and made up of state equivalents, also approved a number of compliance processes for GSTregistered enterprises.

Extension of deadline to composition taxpayers

➤  GSTR-4 for FY 2021-22 to get a waiver of late fee for filing up to 28th July 2022 as against earlier extension of up to 30th June 2022.
➤  CMP-08 deadline for Apr-Jun 2022 (Q1 of FY 2022-23) to get an extension up to 30th July 2022 from 18th July 2022.

Relief to e-commerce suppliers

➤  GST Council agreed to ease compliance bottlenecks for e-commerce suppliers.
➤ E-commerce suppliers have been allowed to register under the composition scheme for intrastate supplies easing their registration hassles and for reducing tax outgo. The new composition scheme for e-commerce suppliers for intrastate online sales will be implemented on 1st Jan 2023 once the IT system is set up.
➤  It means that such intrastate e-commerce suppliers will no longer need to obtain mandatory GST registration if their turnover does not exceed the limit of Rs.40 lakh (goods) or Rs.20 lakh (services) or such lower limits defined for some states/UTs.
➤  However, interstate suppliers on e-commerce platforms shall have to obtain registration irrespective of turnover, compulsorily.

Changes related to GST Tax Rates

The following rates will come into effect from 18th July 2022 subject to CBIC notification-

 

Description of goods or services

Old Rate

New Rate

Solar water heaters and systems

5%

12%

Prepared/ finished/chamois/ composition leathers

5%

12%

Job work in relation to -

Processing of hides, skins, leather/Making of leather products including footwear/Manufacturing of clay brick

5%

12%

Earthwork works contracts and subcontracts to the Central and state governments, Union Territories, and local authorities

5%

12%

Pawan Chakki being air-based atta chakki, wet grinder, cleaning, sorting or grading machines for seeds and grain pulses, and milling machines or cereal making machines, etc;

5%

18%

Drawing, printing, and writing Ink

12%

18%

Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc

12%

18%

Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps

12%

18%

Milking machines and dairy machinery, cleaning, sorting or grading machines and its parts for eggs, fruit or other agri produce

12%

18%

LED Lamps, lights and fixture, their metal printed circuits board;

12%

18%

Marking out and drawing instruments

12%

18%

Services by foreman to chit fund

12%

18%

Works contract for railways, metro, roads, bridges, effluent treatment plant, crematorium, etc.

12%

18%

Works contract supplied to central and state governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. & sub-contractor thereof

12%

18%

Cut and Polished diamonds

0.25%

1.50%

Tetra Pack (Aseptic Packaging Paper)

12%

18%

Tar (From coal, or coal gasification plants, or producer gas plants and coke oven plants)

5%

18%

Import of tablets called Diethylcarbamazine (DEC) free of cost for National Filariasis Elimination Programme (IGST)

5%

Nil

Import of particular defense items by private businesses or suppliers for end-consumption of Defense (IGST)

Applicable rates

Nil

Ostomy Appliances

12%

5%

Orthopedic appliances such as intraocular lens, artificial parts of the body, splints and other fracture appliances, other appliances which are worn or carried, or body implants, to compensate for a defect or disability

12%

5%

Transport of goods and passengers by ropeways (with ITC of services)

18%

5%

Renting of truck or goods carriage including the fuel cost

18%

12%

 

Taxing of various Goods/Services which were earlier Exempted

Description of goods or services

Old Rate

New Rate

Earlier fully exempted, now withdrawn

Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed

Nil

12%

Cheques, lose or in book form

Nil

18%

Parts of goods of heading 8801

Nil

18%

Air transportation of passengers to and from north-eastern states and Bagdogra now restricted to economy class

Nil

Condition added

Transportation by rail or a vessel of railway equipment and material, storage or warehousing of commodities attracting tax such as copra, nuts, spices, jaggery, cotton, etc, fumigation in a warehouse of agri produce, services by RBI, IRDA, SEBI, FSSAI, and GSTN, renting of residential dwelling to GST-registered businesses, and services by the cord blood banks for preserving stem cells

Nil

Applicable rate

GST surcharge on room rent (excluding ICU) for hospitalized patients when those costs exceed Rs 5,000 per day.

 

 

 

Nil

5%

Common bio-medical waste treatment facilities for treating or disposing biomedical waste shall be taxed with availability of ITC, like CETPs

Nil

12%

Hotel lodging costing less than Rs 1,000 per day.

Nil

12%

Training or coaching in recreational activities on arts or culture, or sports other than by individuals

Nil

Applicable rate

Good/Services Earlier partially exempted.

Petroleum/ Coal bed methane

5%

12%

e-Waste

5%

18%

Scientific and technical instruments to public funded research institutes

5%

Applicable rate

 
Conclusion

Considered to be India's most comprehensive indirect tax reform in decades, GST is based on the principle of 'one nation, one market, one tax'. However, five years down the GST lane, there are certain challenges yet to be addressed. The GST regime in the last 5 years has moved forward with alacrity but it is still a long way to go to achieve its full potential of GST. Currently, a large part of the economy is still not covered by the new tax régime. Hence, the mechanism needs to be tweaked with changing times.

 

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