Recommendations Made During 31stMeeting of the GST Council Held Regarding (Download PDF)

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The GST Council in its 31st Meeting on 22nd Dec. 2018 held at New Delhi has recommended to rationalize the 28 % tax rate slab by reducing rates for various items. Further, GST Council has clarified various issues relating to GST Returns, Refunds, HSN Codes, ITC, etc. and has extended due dates for various GST Returns.

Image Of Policy Recommendations

Image Of Policy Recommendations

Image Of Policy Recommendations

The decisions of the GST Council have been presented in this note for easy understanding. The same would be given effect to through Gazette notifications/circulars which shall have force of law.

Reduction in GST Rates/Exemptions on Services:

  • GST rate on cinema tickets above Rs. 100 shall be reduced from 28 % to 18 % and on cinema tickets up to Rs. 100 from 18 % to 12%.

  • GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18 % to 12%

  • Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.

  • Services supplied by rehabilitation professionals recognised under Rehabilitation Council of India Act, 1992at medical establishments, educational institutions, rehabilitation centers established by Central Government/State Government or Union Territories or entity registered under section 12AA of the Income-tax Act shall be exempted.

  • Services provided by GTA to Government departments/local authorities which have taken registration only for the purpose of deducting tax under Section 51 shall be excluded from payment of tax under RCM and the same shall be exempted.

  • Exemption on services provided by Central or State Government or Union Territory Government to their undertakings or PSUs by way of guaranteeing loans taken by them from financial institutions is being extended to guaranteeing of such loans taken from banks.

  • Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i. e. 5 % with ITC of input services).

Rationalization

  • Parliament and State legislatures shall be extended the same tax treatment with regard to payment of tax under RCM (reverse charge mechanism) as available to Central and State Governments.

  • Security services (supply of security personnel) provided to a registered person, except Government Departments which have taken registration for TDS and entities registered under composition scheme, shall be put under RCM.

  • Services provided by unregistered Business Facilitator (BF) to a bank and agent of Business correspondent (BC) toa BC shall be put under RCM.

GST Rate Reduction on Goods Which Were Attracting GST Rate of 28%:

28 % to 18%

  • Pulleys, transmission shafts and cranks, gear boxes etc. , falling under HS Code 8483

  • Monitors and TVs of up to screen size of 32 inches

  • Re-treaded or used pneumatic tyres of rubber;

  • Power banks of lithium ion batteries. Lithium ion batteries are already at 18%. This will bring parity in GST rate of power bank and lithium ion battery.

  • Digital cameras and video camera recorders

  • Video game consoles and other games and sports requisites falling under HS code 9504.

28 % to 5%

Parts and accessories for the carriages fordisabled persons

GST Rate Reduction on Other Goods

18 % to 12%

  • Cork roughly squared or debagged

  • Articles of natural cork

  • Agglomerated cork

18 % to 5%

Marble rubble

12 % to 5%

  • Natural cork

  • Walking Stick

  • Fly ash Blocks

12 % to Nil:

Music Books

5 % to Nil

  • Vegetables, (uncooked or cooked by steaming or boiling in water), frozen, branded and put in a unit container

  • Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption.

Miscellaneous

  • Exemption from GST on supply of gold by Nominated Agencies to exporters of article of gold Jewellery.

  • Exemption from GST on proceeds received by Government from auction of gifts received by President, Prime Minister, Governor or Chief Minister of a State and public servants, the proceeds of which is used for public or charitable cause.

  • Exemption from IGST/Compensation cess on vehicles imported for temporary purposes under the Customs Convention on the Temporary importation of Private Road Vehicles (carnet de passages-en-douane).

  • Rate of 5%/18 % to be applied based on transaction value of footwear

  • Uniform GST rate of 12 % on Flexible Intermediate Bulk Container (FIBC) from existing 5%/12% (depending on the value)

GST on Solar Power Generating Plant and Other Renewable Energy Plants

  • GST rate of 5 % rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84,85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.

  • Certain disputes have arisen regarding GST rates where specified goods attracting 5 % GST are supplied along with services of construction etc and other goods for solar power plant.

  • To resolve the dispute the Council has recommended that in all such cases, the 70 % of the gross value shall be deemed as the value of supply of said goods attracting 5 % rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

Clarifications:

  1. Sprinkler system consisting of nozzles, lateral and other components would attract 12 % GST rate under S. No. 195B of notification No. 1/2017-Central Tax (Rate) dated 28.6. 2018

  2. Movement of Rigs, Tools & Spares and all goods on wheels on own account where such movement is not intended for further supply of such goods but for the provision of service does not involve a supply (e. g. , movement of testing equipment etc. ) and is not be liable to GST.

  3. The goods with description Bagasse Board [whether plain or laminated] falling under Chapter 44 attract GST at the rate of 12%.

  4. Concessional GST rate of 5 % applies to the LPG supplied in bulk to an OMC by refiners/fractioners for bottling for further supply to household domestic consumers.

  5. While animal/cattle/aquatic/poultry feed are exempt vide S. No. 102 of notification No. 2/2017-Central Tax (Rate), this exemption would not apply to their inputs such as fish meal, meat bone meal, bran, sharps, oil cakes of various oil seeds etc.

  6. Manure of determination of classification of vitamins, provitamins etc. as animal feed supplements

  7. Sattu or Chattuafalling under HS code 1106 and attracts the applicable GST rate.

  8. Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP falls under HS code 3923 and attract 18 % GST rate.

  9. 18 % GST is applicable on wood logs including the wood in rough/log used for pulping.

  10. Turbo charger is classified under heading 8414 and attracts 18 % GST and not 5 % GST.

  11. Fabric even if embroidered or has stitching of lace and tikki etc. , and even if sold in three piece fabric as ladies suit set, will be classifiable as fabric and would attract 5 % GST.

  12. Scope of concessional rate of 5 % GST rate for specified equipment for waste to energy plant.

- Published/Last Modified on: February 6, 2019

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