When any new law came into the force, it also brings some challenges or difficulties like GST. Although GST was introduced with the intention to simplify tax treatment because GST has subsumed 17 different kinds of indirect taxes. However, they also have some issues related to compliance. When the problem arises in the business due to the compliances then after consideration of such issues, the GST Council made a recommendation in their meeting to the government. Once the government approves such recommendation, it becomes part of the law.
In this article, we will discuss the key highlights of the 36th GST Council meeting held on 27th July 2019 in which it has made the following recommendation:
1. Reduction in GST Rates
- On Supply of Electronic Cars: Modi government has always tried to promote the electronic vehicle, but due to its heavy cost, the demand for such a vehicle is comparatively is lower in the current Indian market. Hence, in a meeting, the GST council has made a recommendation to reduce the GST rate on the supply of electronic Vehicle from 12% to 5%.
- On Charger or Charging station: Like on supply of electronic cars, GST rates on its charger or charging station has also been reduced from 18% to 5%
- Exemption on hiring of electronic buses: As per Notification number of 12/2017 read with section 11 of CGST Act, 2017, government has specified some supplies which are exempted from GST in which as per the serial number 22, it stated that services given by way of hiring of motor vehicle to the state transport, which has the capacity of carrying more than 12 passengers, shall be exempted from the GST.
Similarly in the meeting, the GST council has made a suggestion to add this exemption to the hiring of electronic cars also.
In Simple words, GST Council has suggested that the services of hiring of electronic motor vehicle having the capacity of more than 12 passengers shall be exempted from GST.
This change has been applicable from 01.08.2019.
2. Extension of Due dates
- Opting of Composition Scheme: As per section 10 of CGST Act, 2017, if the turnover of the person in the last financial year is not more than 1.5 Crore and 75 Lakhs for some states, may opt composition scheme under which he may pay the taxes on a single rate without availing any Input Tax Credit. It also cannot charge GST on his outward supply.
The council has extended the date for opting the composition scheme to 30th September 2019 from 31st July 2019.
- Extension of filing of return for composition supplier: If the person is covered in the normal registration then he shall have to file various returns like GSTR-1, GSTR-3B, GSTR-9, etc. Similarly, the person who has opted for the composition scheme shall also require to file the return on a quarterly basis in which he shall have to disclose details of supply.
Such return shall be filed in GST CMP-08. GST Council has extended the due date for the period of April 2019 to June 2019 to 31.08.2019 from 31.07.2019.
These are the major recommendation which has been made in the 36th Council Meeting. Now, Lets us understand some of the recommendation made in the previous council meeting which becomes the part of the finance bill, 2019.
- Application of increase of limit for registration: As per the GST 32nd Council meeting, it was recommended that the limit for the applicability for the registration should be increased and from 20 Lakhs to 40 Lakhs. In the finance act, 2019, now it becomes the part of the law under which if the person is engaged in exclusively supply of goods, then the limit for the registration shall be Rs.40 Lakhs. If he is supplying both services and goods then the limit shall remain same i.e., Rs.20 Lakhs.
(Note: the limit shall be considered if he is making intrastate supply, because if he is making interstate supply of goods other than handicraft goods, then he shall be compulsorily required to get registered under GST as per section 24 of CGST Act, 2017).
- Mandatory to quote Aadhar number at the time of registration: As per Finance Act, it becomes compulsory for the person to quote Aadhar number at the time of registration. This becomes mandatory from retrospectively. In case of the registration a person other than the individual, the Aadhar number of Karta, Managing director, Trustee shall be required.
- Cross utilization of GST in E-cash Ledger: As per Section 49(3) of CGST Act, 2017, Earlier of the person has deposited the cash in E-cash ledger under the wrong head, then as per section 77 of CGST, 2017, he shall have to claim the refund for wrongly deposit of tax and redeposit the tax in the correct head. Although there was no interest charged for wrongly deposit but it becomes the hardship for the taxable person. Hence, as per the finance bill, 2019 if the cash has been deposit in the wrong head in E-cash ledger, then there will be an option available to him to move such amount in the appropriate Head.
(Note: Till now, this amendment is not yet applicable)
Key Highlights of the 36th Council Meeting:
- Reduction on GST rates in Electronic cars from 12% to 5%
- Reduction on GST rates in charger and electronic charging station of electronic cars has been reduced from 18% to 5%
- The exemption is given on services of hiring of electronic cars having the capacity of more than 12 passengers.
- Extension for filing of return for opting of composition scheme to 30.09.2019
- Filing of quarterly return of composition supplier in GST CMP 08 to 31.08.2019.
Other recommendations of the previous meeting which becomes the part of the finance bill 2019
- Registration limit increased from 20 lakhs to 40 lakhs for specified supplier
- Mandatory quotation of Aadhar number at the time of registration.