The 48th Meeting of the GST Council was held on 17th December 2022 through Video Conference, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. Council had made recommendations and clarifications on certain provisions, the important ones out of which are as follows-
 

♦ Reversal of input-tax-credit
The GST Council has recommended the amendment of Rule 37(1) of the CGST Rules, 2017, with retrospective effect from 1st October 2022, in terms of the second proviso to Section 16 of the CGST Act, this amendment will provide for the reversal of input tax credit (ITC) only proportionate to that amount not paid to the supplier in regard to the value of the supply, including the tax payable.
The Council also recommended inserting Rule 37 under CGST Rules, 2017, to prescribe the mechanism for the reversal of ITC by a taxpayer in the event of non- payment Of the tax amount by the supplier within the specified date and the mechanism for re-availing of such ITC if the supplier pays tax subsequently. This will help ease compliance under Section of the CGST Act, 2017.
 

♦ GST Rate of Ethyl alcohol supplied to refineries for blending with motor spirit (petrol) has been reduced from 18 per cent to 5 per cent. Supply Of Mentha arvensis Will now be included under Reverse Charge Mechanism.
 

♦ Clarification on RCM on service pf Residential Dwellings
No GST is payable where the residential dwelling is rented to a registered person if it is rented it in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business.
 

♦ Decriminalization under GST:
The Council has recommended to:
1. raise the minimum threshold of tax amount for launching prosecution under GST from Rs, One Crore to Rs. Two Crores, except for the offence of issuance of invoices without supply Of goods or services or both
2. reduce the compounding amount from the present range of 50% to 150% of tax amount to the range of to 100%
3. DecriminaIize certain offences specified under clause
(g), (j) and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.
– obstruction or preventing any officer in discharge of his duties
– deliberate tempering of material evidence
– failure to supply the information.
 

♦ Referred to unregistered persons
There is no procedure for claim of refund of tax borne by the unregistered buyers in cases where the contract/ agreement for supply Of services, like construction Of flat/house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is over, The Council recommended amendment in CGST Rules, 2017, along with issuance Of a circular, to prescribe the
procedure for filing application of refund by the unregistered buyers in such cases.

Facilitate E- Commerce for micro enterprises
GST Council in its 47th meeting had granted in-principal approval for allowing unregistered suppliers and composition taxpayers to make intra-state supply.
of goods through E-commerce Operators (ECOs), subject to certain conditions.
 

♦ Schedule III Items
Paras 7, 8(a) and 8(b) were inserted in Schedule III of CGST Act, 2017 with effect from 01.02.2019 to keep certain transactions/ activities, such as supplies of goods from a place outside the taxable territory to another place outside the taxable territory, high sea sales and supply of warehoused goods before their home clearance, outside the
purview of GST. In order to remove the doubts and ambiguities regarding taxability of such transactions/ activities during the period 01.07.2017 to 31.01.2019. the Council has recommended to make the said paras effective from 01.07.2017. However, no refund of tax paid shall be available in cases where any tax has already been paid in
respect of such transactions/ activities during the period 01.072017 to 31.01.2019.
 

♦ Proportionate Reversal on account of dues to Vendors
The Council has recommended to amend sub-rule (1) of rule 37 of CGST Rules, 2017 retrospectively with effect from 01.10.2022 to provide for reversal of input tax credit, in terms of second proviso to section 16 of CGST Act, only proportionate to the amount not paid to the supplier vis a vis the value of the supply, including tax payable.
 

♦ Re- availment of ITC reversed on account of non- payment of Tax by Vendors

The Council recommended to insert Rule 37A in CGST Rules, 2017 to prescribe the mechanism for reversal of input tax credit by a registered person in the event of non-payment of tax by the supplier by a specified date and mechanism for re-availment of such credit if the supplier pays tax subsequently.
 

♦ Treatment of Statutory Dues under GST law for matters under Insolvency & Bankruptcy Code 2016

Circular to be issued for clarifying the issue of treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalized under Insolvency and Bankruptcy Code, 2016. Rule 161 of CGST Rules, 2017 and FORM GST DRC-25 also to be amended for facilitating the same.
 

♦ Clarification on Place of Supply of services in relation to Transportation of Goods.
Circular to be issued for clarifying the issues pertaining to the place of supply Of services of transportation of goods in terms of the proviso to sub-section (8) of section 12 of the IGST Act, 2017 and availability of input tax credit to the recipient of such supply. It has also been recommended that proviso to sub-section (8) of section 12 of the IGST Act, 2017 may be omitted.
 

♦ Procedure on verification of ITC mismatch on account of GSTR-2B
Procedure for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19. (The same was issued by the State of Maharashtra & we expect the same will be made applicable for all states & bringing uniformity in verification process)