37th GST Council Meeting held on 20th Sep 2019 Recommendations

37th GST Council Meeting held on 20th Sep 2019 Recommendations

Change in GST Rates

The council has recommended to change GST tariff rate for hotels as follows:

Transaction value per unit per day up to Rs.1000/- Nil rate, from Rs.1000/- to Rs.7500/- 12% and above Rs. 7500/- tax at 18%.

This will have direct impact on consumers by benefiting in the lower taxes.

To reduce outdoor catering having tariff rate up to Rs.7501/- to 5% without ITC above Rs. 7501/- will remain 18% with ITC.

This will boost small catering services.

Exemption on export freight by air or sea till 30.09.2020.

Further it was recommended to exempt services provided by an intermediary, when supplier or recipient both are located outside India. This will help boosting supply of such services outside India by Indian businesses. This may need some clarification / change in section 13 of IGST Act.

Council has recommended to reduce GST on Job Work Service in relation to diamonds from 5% to 1.5%. This will have a positive impact on the industry and exports. It will also save working capital to quite an extent thus reduction in costs.

To allow registered authors to pay GST as forward charge and not as RCM. This will probably help in proper payment & accounting and increase in revenue.

Rates of few more items have been reduced and in some cases increased.

Recommended to for Reduction:

  • Slide Fasteners 18 to 12%
  • Wet grinders 12 to 5%
  • Plates & Cups made of flowers, bark leaves 5 to Nil
  • Dried Tamarind 5 to Nil
  • Cut and diamond semi precious stones 3 to 0.25%

Recommended to for Increase:

  • Goods falling under chapter 86 railway wagons, coaches,
  • Caffeinated Beverages 18 to 28% plus 12% cess
  • In auto sector nothing much has been done to give impetus to the industry except cess has been reduce to 1% from 15% for more than 10 persons but less than 13 persons. Auto sector not much has been done because of reduction in Direct Corporate Tax by FM in the morning same day which was a big booster for all industries.
  • Aerated Drink manufacturers will not be allowed to register under Composition scheme.
  • Above rate change effect has been recommended from 1st Oct 2019. Notifications shall be released for the same.

Annual Returns by Composition and Regular Dealers

GST Council recommended in the meeting relaxation in filing Annual Return by MSME for FY 2017-18 & 2018-19 by Composition Dealers Return 9A. A great relief for small businesses.

For Regular dealers for the same tax period with Turnover up to Rupees Two Crores made optional to file GSTR9 Annual Return.

This will reduce the hardship faced by them initially in understanding the intricacies of the return. This will also help them in giving more time to business and not worry about filing GST annual returns.

Also changes in Annual return have been recommended to make it easier for individuals to file.

Looking at the overall recommendations, I feel they are positive to the industry and small businesses.

Source PIB GOI

Copy of Press Release Notes issued by the Ministry of Finance can be viewed by clicking at the links provided below:

1.GST rates on Goods

2.GST rates on Services

3.Law related Changes

Disclaimer: All views are personal and shall not be taken as opinion or statement of Law.

CA Suresh Jain is a practicing Chartered Accountant and Corporate & Institutions Consultant & Trainer in GST. Can be approached on [email protected]

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