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The finance minister conducted a GST Council Meeting on June 28th and 29th, 2022. The council made several significant amendments in the meeting, ranging from GST return filings to GST rate changes. Below are highlights of the new GST amendments made in the discussion:
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Earlier, GST was not applied to certain food products and grains when they were not branded. The Legal Metrological Act’s exemption range has been revised to exclude prepackaged and pre-labelled retail packets, such as curd, lassi, and buttermilk. The products listed below are not entirely exempted from compliance.
| Particulars | Before Change | After Change |
|---|---|---|
| Cheques, loose or in book form | NIL | 18% |
| Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans, and globes printed | NIL | 12% |
| Parts of goods of heading 8801 | NIL | 18% |
Given below are the GST rate changes for goods:
| Particulars | Before Change | After Change |
|---|---|---|
| Printing, writing, or drawing ink | 12% | 18% |
| Power-driven pumps are primarily designed for handling water. For example, centrifugal pumps, deep tube-well turbine pumps, submersible pumps, and bicycle pumps | 12% | 18% |
| LED lamps, lights, and fixtures, and their metal printed circuits board | 12% | 18% |
| Drawing and marking out instruments | 12% | 18% |
| Prepared/finished leather, chamois leather, composition leather | 5% | 12% |
| Orthopaedic appliances − splints and other fracture appliances, artificial parts of the body, or other appliances that are worn or carried, or implanted in the body to compensate for a defect or disability, intraocular lens | 12% | 5% |
| Ostomy appliances | 12% | 5% |
| Tetra packs (aseptic packaging paper) | 12% | 18% |
| Cut and polished diamonds | 0.25% | 1.50% |
| IGST on specified defence items imported by private entities or vendors when the end-user is the Defense forces of India | Applicable rate | NIL |
| Cheques, loose or in book form | NIL | 18% |
| Petroleum/coal bed methane | 5% | 12% |
| E-waste | 5% | 18% |
| Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans, and globes | NIL | 12% |
Given below are the chnage in GST rates for services:
| Particulars | Before Change | After Change |
|---|---|---|
| Services supplied by the foreman to chit fund | 12% | 18% |
| Job work in relation to the processing of hides, skins, and leather | 5% | 12% |
| Job work in relation to the manufacture of leather goods and footwear | 5% | 12% |
| Job work in relation to the manufacture of clay bricks | 5% | 12% |
| Works contract for roads, bridges, railways, metro, effluent treatment plant, etc. | 12% | 18% |
| Works contract service supplied to Central and State governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals, etc. and its sub-contracting | 12% | 18% |
| Works contract service supplied to Central and State governments and local authorities involving predominantly earthwork and its sub-contracting | 5% | 12% |
| Transport of goods and passengers by ropeways | 18% | 5% (with ITC for services) |
| Renting of truck/ goods carriage where the cost of fuel is included | 18% | 12% |
Despite reports that skill games and casinos would be subject to a flat 28% GST tax, the council decided to postpone making a decision until their next meeting in August 2022. The GST Council has instructed the Group of Ministers (GoM) to reexamine the topic of casinos and online gaming and report back to the GST Council.
As a result, the most recent decision of the 47th GST Council meeting is a combination of several GST rate increases and a few rate reductions. Primarily compliance improvements to the system
The year 2024 has seen several important updates in GST laws, aimed at enhancing compliance and streamlining taxation processes:
E-Invoice Mandate Expansion:
Businesses with an annual turnover of ₹5 crore or more are now required to issue e-invoices, further reducing errors and enhancing transparency.
Penalty for Non-Compliance:
Stricter penalties for non-filing of GST returns have been introduced, including auto-restriction of input tax credit for continuous non-compliance.
Simplification of GST Returns:
GSTN has introduced user-friendly changes in GSTR-3B and GSTR-1 filing processes, making compliance easier for small and medium enterprises.
Clarifications on ITC:
Detailed clarifications were issued on ITC eligibility, especially concerning blocked credits and reversal conditions, to minimize disputes.
Introduction of New GST Tribunal Framework:
The GST Appellate Tribunals have been set up to address appeals more efficiently, ensuring faster resolution of disputes.
These updates are expected to enhance ease of doing business and improve tax compliance. Businesses must stay updated to avoid penalties and optimize tax benefits.
2023 brought several significant updates to GST laws to enhance efficiency and compliance:
Lower Threshold for E-Invoicing:
E-invoicing was made mandatory for businesses with a turnover of ₹10 crore or more, extending digital compliance to more taxpayers.
Amendments to GST Rates:
The GST Council revised rates on specific goods and services, aiming to rationalize taxation and promote economic growth.
Simplification of Composition Scheme:
The composition scheme saw relaxed conditions, benefiting small taxpayers by reducing compliance burdens.
Scrutiny of Returns:
Automated scrutiny of GST returns was introduced, focusing on mismatches between GSTR-1, GSTR-3B, and GSTR-2A.
Mandatory Aadhaar Authentication:
Aadhaar authentication was made mandatory for GST registration to prevent fraudulent activities.
Enhanced Penalty Provisions:
Stricter penalties were implemented for e-way bill violations and non-compliance with GST rules.
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These updates highlighted the government’s focus on digital transformation and robust compliance mechanisms. Businesses benefited from reduced complexities but were required to adapt quickly to avoid penalties.
The recent amendments to the GST act have brought about significant changes in the way the businesses in India operate. The introduction of the new return filing system and the simplification of the annual return filing process are some of the key highlights of the amendments. The move towards a single cash ledger system and the implementation of the e-invoicing system have also been major steps towards improving GST compliance and reducing the burden on taxpayers. Overall, the amendments are expected to streamline the GST regime and make it more efficient, while ensuring greater transparency and accountability in the tax system.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.