Highlights of the new GST Amendments
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:
Annual returns for F.Y. 2021-22
- GSTR-9 and GSTR-9A are still not applicable to businesses with less annual sales than Rs. 2 crores for the fiscal year 2021–2022
- Once all pending returns have been filed, the suspension of GST registration will automatically be lifted.
- Proposals for significant changes to Form GSTR-3B will be made public to gather feedback and suggestions from stakeholders.
- The requirement for a proportionate ITC reversal on the supply of duty credit scrips is being eliminated.
- The deadline for issuing orders relating to claims related to the annual return due date for F.Y. 2017–18 has been extended until September 30, 2023, as per Section 73 of the CGST Act.
Amendments for E-commerce Suppliers
- The GST Council decided to offload e-commerce vendors’ compliance constraints.
- It enabled e-commerce suppliers to register under the composition scheme for intrastate supplies, easing their registration burden and lowering their tax liability.
- The new composition scheme for e-commerce suppliers for intrastate online sales will be implemented on January 1, 2023, after the IT system is in place.
- Interstate vendors using online marketplaces won’t be able to register as composition taxpayers.
Extensions of Deadlines for Taxpayers of Composition
- In contrast to the prior extension up to June 30, 2022, GSTR-4 for F.Y. 2021–2022 will now be exempt from late fines until July 28, 2022.
- The CMP-08 deadline has been pushed from July 18 to July 31, 2022, from April to June 2022 (Q1 of FY 2022-23).
Specific Changes in GST
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% |
GST Exemption is Withdrawn on The Following Services
- Transportation by rail or vessel of railway equipment and material.
- Storage or warehousing of commodities that attract tax
- Fumigation is a warehouse of agricultural produce.
- Services by the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA), Securities and Exchange Board of India (SEBI), Food Safety and Standards Authority of India (FSSAI), and Goods and Services Tax Network (GSTN).
- Renting of a residential dwelling to registered business entities.
- Cord blood banks provide services by way of the preservation of stem cells.
Changes in GST Rates for Goods
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% |
| Solar water heater and system | 5% | 12% |
| 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% |
Changes in GST Rates for Services
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% |
Taxes on Casino and Gaming
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.
Amendments to GST Returns
- Inverted duty structure: To help taxpayers who are also qualified for ITC on input services, a revision to the mechanism for determining refund amounts has been proposed and put into effect.
- Refund claims for Integrated GST (IGST): For exporters deemed risky and needing IGST refund verification by the GST authorities, a mechanism for online submission of such IGST refund claims to the jurisdictional GST authorities will be offered.
- Exclusion of time limit for filing refund claim: It is suggested to exclude the time limit from March 1, 2020, to February 28, 2022, from the computation of the limitation period for a refund claim to be filed by an applicant, as well as for issuing a demand or order regarding inaccurate refunds.
- Re-credit the incorrect refund amount to the electronic credit ledger: It is suggested that a new form, GST PMT-03A, be introduced to re-credit inaccurate refund amounts issued to taxpayers. In their electronic credit ledger, taxpayers can re-credit the sum of an incorrect refund that they have already given back.
- The unutilised ITC on zero-rated shipments will be refunded to electricity exporters.
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
Conclusion
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.
