The New GST Amendments as per the 23rd Council Meet

The New GST Amendments As Per The 23rd Council Meet

All eyes were in Guwahati as the GST Council convened its 23rd meet in the city on 9th and 10th November 2017. As expected, a lot of positive changes had been brought about in the existing GST rules, much to the delight of consumers and businessmen alike. Rate cuts have been made in various goods and services and even businessmen have been given relief in filing their tax returns. The new rates will be applicable from 15 Nov 2017 prospectively after notification. Here are the amendments which were made to the GST rules in the 23rd Council meet –

Rate Cuts

Significant rate cuts were made in the existing tax rate on goods and services. These cuts were made in all the tax brackets of 28%, 18%, 12% and 5%. Here are the changes –

  • Cuts in the 28% Tax Bracket :- With about 228 items in the 28% tax bracket, the Government has reduced it to 50. About 178 items’ rates were cut down from 28% to 18% leaving only luxury goods and sin products in the 28% bracket. Goods which saw a rate cut to 18% include chewing gums, marble flooring, detergents, toiletries, chocolate, plywood, cosmetics, etc. Items still in the 28% bracket include tobacco products, aerated drinks, automobiles, etc. Furthermore, wheat grinders and tanks and armoured vehicles had their tax rate cut from 28% to 12%.

  • Cuts in the 18% Tax Bracket :- Tax rate of various items in the 18% bracket have been slashed down to 12% and 5%. About 13 items like cotton and jute handbags, diabetic food, pasta, etc. saw a rate cut to 12%, 6 items like chikki, fly ash brick, khaja, etc. saw a rate cut to 5%.

  • Cuts in the 12% Tax Bracket : About 8 items in the 12% tax bracket have been moved to the 5% bracket like desiccated coconut coir products, idli dosa batter, etc.

  • Cuts in the 5% Tax Bracket : 6 items of the 5% tax bracket have been made tax-free. These items include frozen or dried fish, dried vegetables, etc.

Refer the entire revised list here (Link to the pdf with revised rate changes)

Existing Tax Rate on Goods and Services

GST on restaurants

With the new amendments, restaurants would be charged 5% GST without any Input Tax Credit (ITC) benefit. However, five-star and other starred restaurants where the room rent is Rs.7500 and above will be charged 18% GST. They can, however, avail the benefit of Input Tax Credit. Outdoor catering will attract 18% GST.

Late tax filing penalty

While, currently, the fine for filing your taxes late is Rs.200/day, with the new amendments, this late filing fee has been reduced to the following rates:

For taxpayers who have no tax liability, the fee has been reduced to Rs.20/day.

Tax Filing processes and forms

For tax filing rules, under the new mandate, individuals with an annual total turnover of up to Rs.1.5 crores can now file GSTR -1 quarterly while those with a higher turnover need to file it monthly. The due dates are as follows –

For taxpayers with turnover below Rs.1.5 crores

Period Revised Due date
July-September 31st December 2017
October – December 15th February 2018
January – March 30th April 2018

For taxpayers with turnover above Rs.1.5 crores

Period Revised Due date
July-October 31st December 2017
November 10th January 2018
December 10th February 2018
January 10th March 2018
February 10th April 2018
March 10th May 2018

For the time being, filling of Form GSTR2 and GSTR3 is not required for the previous period, only form GSTR-1 s to be filled for the entire period starting from July 2017. A committee of Officers will work out the time period required for filling Form GSTR-2 and GSTR-3. Taxpayers who were unable to file their GST returns in Form GSTR – 3B within the due date for July, August and September do not have to pay any late fee. Any fee already paid would be refunded to the Electronic Cash Ledger under the head ‘Tax’ and not ‘Fee’. This refund can be used for meeting future tax liabilities. The facility of manual filing of application for advance ruling is being launched for the current time period.

Due dates for filing required forms

The due dates of various forms have been extended and are as follows –

Form Tax period Revised Due date of filing
GST ITC -04 July-September 2017 31st December 2017
GSTR – 4 July-September 2017 24th December 2017
GSTR – 5 July 2017 11th December 2017
GSTR – 5A July 2017 15th December 2017
GSTR – 6 July 2017 31st December 2017
TRAN – 1 NA 31st December 2017

Rules for businessmen and traders

The levy for traders and industry in the composition scheme has been reduced to 1% of turnover. The Composition Scheme threshold has been raised to Rs.2 crores. Exporters exporting goods to Nepal and Bhutan who have been exempted from GST can avail Input Tax Credit on goods and services used to supply exempted services to both countries.

  • Manual Filing :- A facility for the manual filing of an application for an advance ruling is being introduced for the time being.

Foreign diplomatic missions/UN organizations

The Government would issue a centralized UIN to every Foreign Diplomatic Mission/UN Organization. All compliances for these agencies would then be done by the Central Government after coordinating with Ministry of External Affairs.

So, know these latest changes and keep yourself updated of the new developments.