Dear All,

The Goods and Services Tax (‘GST’) Council in its 54th meeting held on 9 September 2024 has made certain recommendations with respect to changes relating to GST rates, measures for facilitation of trade and streamlining compliances under GST.

We have hereinbelow summarized the key recommendations of the meeting:

1.     GST Council has recommended for insertion of Rule 164 in the CGST Rules and issuance of circular and forms for providing procedures and clarifications for claiming the benefit of waiver of interest and penalty for the financial years (‘FY’) 2017-18, 2018-19, 2019-20 with respect to tax demand under Section 73. Further, it has been clarified that Section 128A inserted earlier for enabling such waiver may be made effective from 1 November 2024.

2.     GST Council has recommended special procedure for enabling rectification of the orders already issued under Sections 73, 74, 107 and 108 of the CGST Act for raising demands of ITC claimed beyond the time limits prescribed under Section 16(4). This recommendation was required to give effect to Sections 16(5) and 16(6) inserted in the CGST Act for providing that the time limit for availment of ITC for the FYs 2017-18, 2018-19, 2019-20 and 2020-21 shall be 30 November 2021.

3.     GST Council has recommended rolling out of B2C e-invoicing for its potential benefit to retail sector. It is recommended to be rolled out on a voluntary basis in selected sectors and States.

4.     Clarification to be issued through circulars on following issues for bringing clarity on certain trade issues and reduced litigations :

• Place of supply of advertising services provided by Indian advertising companies to foreign entities
• Availability of ITC on demo vehicles by automobile dealers
• Place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India.

5.     The following key amendments have also been recommended regarding taxability or rate applicable to certain goods/services:

• GST rates applicable on certain food items and other goods to be reduced
• Taxability of metal scarp and renting of commercial property to be changed from forward charge to reverse charge when supplied by an unregistered person to a registered person
• Preferential location charges (‘PLC’)  paid before issuance of completion certificate shall form part of composite supply where supply of construction services is the main service and PLC is naturally bundled, In such cases, PLC would be eligible for the same tax treatment as the main supply (i.e., construction services)
• Ancillary service provided by a Goods Transport Agency (like loading/ unloading, transhipment, temporary warehousing etc.) shall be treated as composite supply if provided in the course of services for transportation of goods.

The notifications and circulars in respect to the recommendations of the GST council meeting are expected to be issued soon.