Highlights:
1.
Services supplied by a director of a company to the
company in his personal capacity (such as supplying services by way of
renting of immovable property to the company) are not taxable under RCM. Only
those services supplied by a director of company, which are supplied by him in
the capacity of director of that company shall be taxable under RCM.
2.
It has been decided to clarify that the supply of food
and beverages in cinema halls is taxable as restaurant service as long as they
are supplied independently of the cinema exhibition service.
3.
Taxing Casinos, Race Courses and Online Gaming
The GoM, stated that since no consensus could be reached, the GST
Council will take the final decision on this matter. Thereby GST Council has
recommended the following:
- Suitable amendments to be made to law to include
online gaming and horse racing as taxable actionable claims.
- All three namely Casino, Horse Racing and Online
gaming to be taxed at the uniform rate of 28%.
- Tax will be applicable on the face value of the chips
purchased in the case of casinos, on the full value of the bets placed with
bookmaker/totalisator in the case of Horse Racing and on the full value of the
bets placed in case of the Online Gaming.
4.
The Council has recommended the Goods and Services
Tax Appellate Tribunal (Appointment and Conditions of Service of President
and Members) Rules, 2023. The Council also recommended that
provisions of Finance Act, 2023 pertaining to GST Appellate Tribunal
may be notified by the Centre with effect from 01.08.2023, so that the
same can be brought into operation at the earliest.
5.
Input Services Distributor (ISD) mechanism is not
mandatory for
distribution of input tax credit of common input services procured from
third parties.
6.
Clarification would be issued regarding taxability of internally
generated services provided by one distinct person to another distinct
person.
7.
Amendment may be made in GST law to make ISD
mechanism mandatory prospectively for distribution of input tax credit of
such common input services procured from third parties.
8.
Circular to be issued to provide clarity on various
issues pertaining
to the GST liability as well as the liability to reverse input tax credit in cases
involving warranty replacement of parts and repair services during the warranty
period.
9.
In respect of wrongly availed and utilized IGST
credit, clarifying inter alia that in cases of wrong availment of IGST credit,
the balance of input tax credit (ITC) in electronic credit ledger, under the
heads of IGST, CGST and SGST taken together, has to be taken in consideration
while calculating such interest liability as per rule 88B.
10.
Clarifying that mere holding of securities of a
subsidiary company by a holding company cannot be treated as a supply of
services and therefore, cannot be taxed under GST.
11.
Taxpayers will now have an alternate manual mechanism
to verify tax credits, where such tax credits are not appearing online. This
benefit was earlier available for FY 2017-18 and 2018-19; now, it has been
extended till 31.12.2021. This is welcome and would benefit thousands of
taxpayers, especially MSME’s.
12.
Special procedure to be provided to enable manual
filing of appeal against the orders passed by proper officers in respect of
TRAN-1/ TRAN-2 claims of the registered persons, filed in pursuance of the
directions of Hon’ble Supreme Court in case of the Union of India v/s Filco
Trade Centre Pvt. Ltd.
13.
Procedure for Recovery of Tax and Interest: Rule 88C mandated system-based
intimation to the registered person in cases where the output tax liability in
terms of FORM GSTR-1 exceeds the output tax liability disclosed in FORM
GSTR-3B. Now the Council provides insertion of a FORM GST DRC-01D to
provide for manner of recovery of the tax and interest in respect of the amount
intimated under rule 88C for which no satisfactory explanation is furnished.
14.
Mechanism to deal with differences in ITC between FORM
GSTR-2B and FORM GSTR-3B: The Council has recommended a mechanism for
system-based intimation to the taxpayers in respect of the excess availment of
ITC in FORM GSTR-3B vis a vis that made available in FORM GSTR-2B
above a certain threshold. For this purpose, rule 88D and FORM DRC-01C
to be inserted.
15.
Monthly return filings change for OIDAR service providers. They would
now provide the details of supplies made to registered persons in India in
their montly FORM GSTR-5A.
16.
The Council has recommended insertion of a new
clause to clarify the place of supply in respect of supply of goods to
unregistered persons. This may have some impact on companies undertaking
supplies of in B2C manner.
