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21st GST Council meeting – Major decisions

11th September, 2017

The GST Council met in Hyderabad on 9th September 2017 to discuss and decide on various issues including extension of date for filing GST returns.

Date of filing GST returns extended

GST Council approved extension in date of filing GST returns, considering the difficulties faced while filing returns.  According to the revised schedule, due date for filing GSTR-1, GSTR-2, GSTR-3 and GSTR-6 for the month  of July 2017 has been changed to 10th Oct, 31st Oct, 10th Nov and 13th Oct respectively.

Due dates for filing these returns for subsequent period will however be notified later. Meanwhile, filing of the monthly summary return in Form GSTR-3B will be continued for the months of August to December, 2017.

Reduction in rates

GST Council has recommended reduction in rate of certain services and over 40 goods.  Such reduction in rate to 12% is broadly in relation to household goods, including tableware, kitchenware etc., of wood or porcelain.

For medical-grade sterile disposable plastic gloves, computer monitors up-to 20 inch, plastic raincoats, the rate will be reduced to 18%.

Cotton seed oil cakes, broom and brushes consisting of twigs or other vegetable material with or without handle, and khadi fabric sold through outlets of Khadi and Village Industries Commission, will be exempted from GST.

GST on branded food items

The Council has recommended amendment to the framework for applicability of GST on branded food products to prevent manufacturers from avoiding payment of 5% GST by deregistering their trademark, as unbranded food items are exempt from GST.

Accordingly, GST at rate of 5% will be levied on foods products which on May 15, 2017 had a registered trademark or, if the item had a trademark or name on which it is entitled to maintain an actionable claim.

Compensation cess on motor vehicles

The Council has increased the rate of Compensation Cess on mid segment cars (engine capacity less than 1500cc) to 17%, on large cars (engine capacity above 1500cc) to 20% and on Sports Utility Vehicles (SUVs) to 22%.

It may be noted that no increase in compensation cess has been recommended on small cars (both petrol and diesel), and on hybrid cars and hybrid SUVs.

Registration exemption for certain persons making inter-State supply

The Council has decided to allow threshold exemption from registration to persons making inter-State supplies of taxable handicraft goods where the aggregate turnover of such persons does not exceed Rs 20 lakhs (Rs. 10 lakh for special category States). To avail this exemption the person must have a Permanent Account Number and e-way bill should be generated on movement of these goods irrespective of the consignment value.

Further, job worker making inter-State supply of taxable job work services to a registered person are also allowed the threshold exemption from registration provided they generate e-way bill on movement of goods irrespective of the value of consignment. Job work relating to jewellery which is exempted from e-way bill provisions will not be covered under this exemption.

Composition Scheme window

The window to opt for composition scheme is open till 30th September 2017 for a registered person and such registered person shall be permitted to avail the benefit of composition scheme with effect from 1st October, 2017.

Committees on GST

GST council decided to constitute a committee of Group of Ministers to monitor and resolve the issues pertaining to IT in GST implementation. The Council also decided to form a committee comprising of officers of Centre and State to examine issues relating to exports.
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