25th GST Council Meet Highlights : List of all Rules & Rate Changes

The 25th GST Council Meet was held on 18th January 2018 in Vigyan Bhawan, New Delhi.

Rate changes, Exemptions and other proposals made shall be given effect once the Notifications are issued for the same.

Key Decisions Taken in the 25th GST Council Meet:

1. Late fee reduction:

• For GSTR-1, GSTR-5, GSTR-5A  and GSTR-6 the late fees is reduced to Rs. 50 per day
• In case of Nil return filed for GSTR-1, GSTR-5, GSTR-5A late fee is reduced to Rs. 20 per day

2. Cancellation of registration by voluntary registrants can be applied before expiry of 1 year from the date of registration

3.Cancellation of registration (REG – 29) by migrated taxpayers extended till 31st March 2018.

4. On successful implementation of e-Way bills, the E-way bill portal to be shifted  to ewaybillgst.gov.in

5. Certain modification to e-way bill rules to be notified soon.

6. Recommendations made by Handicraft committee has been accepted by the council: The rates are to be worked out later.

7.  GST Rates for 29 Goods and 53 Services have been reduced. These rates will come into effect from 25th January 2018.

GST Rate Changes for Goods:

Nil Rated Goods:

1. Vibhuti
2. Parts and accessories for the manufacture of hearing aids.
3. De-oiled rice bran

Rates reduced from 28% to 18%

1. Old and used motor vehicles [medium and large cars and SUVs] with a condition that No ITC is availed

2. Public transport Buses that run on Biofuel

Rates reduced from 28% to 12%

For Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed

Rates reduced from 18% to 12%

1. Sugar boiled Confectionery
2. Drinking water packed in 20 litres bottles
3. Biodiesel
4. Drip irrigation system including laterals, sprinklers
5. Mechanical Sprayer
6. Certain listed Bio-pesticides (12 in nos)
7. Fertilizer grade Phosphoric acid
8. Bamboo wood building joinery

Rate reduced from 18% to 5%

1. LPG supplied to  Household Domestic Consumers
2. Raw materials and Consumables needed for Launch vehicles, Satellites and Payloads (Both CGST and IGST Rates)
3. Tamarind Kernel Powder
4. Mehendi paste in cones

Rates reduced from 12% to 5%

1. Articles of straw, of esparto or of other plaiting materials
2. Velvet fabric [with a condition that no refund is claimed on ITC]

Rates reduced from 3% to 0.25%

Diamonds and precious stones

GST Rate increased from 12% to 18%

Cigarette filter rods

Rate increased from 0% to 5%

Rice bran (other than de-oiled rice bran)

Compensation cess is reduced to 0% for following motor vehicles :

1. Old and used motor vehicles [medium and large cars and SUVs]with a condition that No ITC is availed

2. Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed

3. Vehicle that is cleared as an ambulance (having all accessories necessary in ambulance)

4. 10-13 seater Buses and ambulances subject to specified conditions

GST Rate Changes for Services:

GST newly applicable on following:

• GST Rate at 5%  on small housekeeping service providers, notified under section 9 (5) of GST Act, who provide housekeeping service through ECO,  without availing ITC
• GST Rate at 28% on actionable claim in the form of chance to win in betting and gambling including horse racing

Rate reduced from 28% to 18%

Services by way of admission to theme parks, water parks, joy rides, merry-go-rounds, go-karting and ballet

Rate reduced from 18% to 12%

1. Transportation of petroleum crude and petroleum products with ITC Credit.

2. Metro and monorail projects (construction, erection, commissioning or installation of original works)

3. Works Contract Services by Sub-contractor to the Main contractor under the following scenario:

Where the main contractor provides WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity at the rate of 12%

Note: Similarly, GST Rate for Sub-contract services to the main contractor shall attract 5% where the Main contractor is providing services to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity at the rate of 5%

4. Common Effluent Treatment Plants services for treatment of effluents

5. Mining or exploration services of petroleum crude and natural gas and for drilling services in respect of the said goods

Rate reduced from 18% to 5%

1. Tailoring Services
2. Transportation of petroleum crude and petroleum products without ITC Credit.
3.  Job-work services for manufacture of leather goods(Chapter 42) and footwear (Chapter 64)

Services Exemption List & related changes

Following Services are exempted :

• Providing information under RTI Act, 2005 from GST.
• Legal services provided to Government, Local Authority, Governmental Authority and Government Entity.
• Transportation of goods from India to a place outside India by air or sea until  30th September 2018:
• Life Insurance to personnel of Coast Guard (under the Group Insurance Scheme of the Central Government) by the Naval Insurance Group Fund, retrospectively w.e.f. 1.7.2017
• Dollar-denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or any financial regulatory authority, to a person outside India
• Pure services provided to Government entity by a Panchayat/ Municipality. Composite supply involving predominantly supply of services (i.e. up to 25% of the supply of goods) is also exempted.
• Lease of land:

1. By government or local authority to governmental authority or government entity
2. Supply as a part of specified composite supply of construction of flats, etc

• Admission to, or conduct of examination provided to all educational institutions including any service of conducting entrance examinations  on collection of entrance fees
• Reinsurance services in respect of following insurance schemes :
  1. General insurance business provided under schemes such as  Pradhan Mantri Suraksha Bima Yojna and others listed in Notification 12/2017-CGST Rate
  2. Life insurance business provided under schemes such as Pradhan Mantri Jan Dhan Yojana and others listed in Notification 12/2017-CGST Rate
• Services by way of fumigation in a warehouse of agricultural produce
• Services of admission to planetarium where consideration charged is below Rs.500
• Subscription of online educational journals/periodicals by educational institutions who provide degree recognized by any law
• Renting of transport vehicles to a person providing services of transportation to an educational institution (students, faculty, and staff) providing education upto higher secondary or equivalent.
• Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-20 World Cup in case the said event is hosted by India.

Changes in Exemption limits in the following cases:

• The exemption limit of Rs 5,000 per month per member in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution is enhanced to Rs 7500/-.
• The exemption limit of the amount of cover of Rs. 50,000 enhanced to Rs. 2 lakhs in respect of services of life insurance business provided under life microinsurance product approved by IRDAI
• The exemption limit of Rs.250 for services with respect to all the theatrical performances like Music, Dance, Drama, Orchestra, Folk or Classical Arts and all other such activities  in any Indian language in theatre increased 500 per person

Others Recommendations to Note:

• To allow ITC of input services in the same line of business at the GST rate of 5% in case of tour operator service
• To extend the period of Viability Gap Funding (VGF) with respect to the construction of RCS Airports from 1 to 3 years from the date of commencement of RCS Udan Airport.
• Proposal to not to include the Value of deposits, loans or advances on which interest or discount is earned in the Value of exempt supply under sub-section (2) of section 17 (Not applicable to Banking company, Financial Institutions, NBFC extending deposits, loans or advances)
• To defer the liability to pay GST in case of TDR against consideration in the form of construction service and on construction service against consideration in the form of TDR to the time when the possession or right in the property is transferred to the land owner by entering into a conveyance deed or similar instrument (eg. allotment letter). No deferment in point of taxation in respect of cash component.
• Changes in Valuation of Lottery, Betting and gambling Services:
  1. To insert a provision that the value of lottery shall be 100/112 or 100/128 of the price of lottery ticket earlier notified.
  2. To insert a provision that the Value of supply of Betting & Gambling shall be 100 % of the face value of the bet or the amount paid into the totalizator.
• Recommendations made regarding Reverse Charge Mechanism
  1. To include Renting of Immovable property by government or local authority to a registered person under reverse Charge while renting of immovable property by government or local authority to unregistered person shall continue under forward charge
  2. To define insurance agent in the reverse charge notification to have the same meaning as assigned to it in clause (10) of section 2 of the Insurance Act, 1938, so that corporate agents get excluded from reverse charge

Clarifications made:

GST Rate Clarifications are given for the following goods:

1.  GST at 18% to be charged only on the net quantity of “Poly Butylene Feed Stock & Liquefied Petroleum Gas” retained for the manufacture of “Poly Isobutylene or Propylene or di-butyl para cresol” subject to specified conditions.

2. With Respect to Rail coach industry:

• GST at 5% on Chapter 86 Goods (with condition that no Refund of unutilized ITC)
• GST to attract at applicable rates for the rest of the Goods supplies to Indian Railways

3. With Respect to Coal Rejects falling under HSN Code 2701:

• GST at 5%
• Compensation Cess at Rs 400 Per Metric Ton

Details of the previous GST Council Meets – GST News and Announcements