Key recommendations made in the 52nd GST Council Meeting held on 07-10-2023
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Taxability of Corporate & Personal guarantee
Taxability of Corporate & Personal guarantee offered by directors to the bank against the credit limits/loans being sanctioned to the company and Corporate Guarantee provided by related persons including guarantees by holding company to its subsidiary company to be clarified via Circular:
Amnesty Scheme
Amnesty Scheme to be introduced for filing of appeals against demand orders (passed on or before 31st March 2023) where an appeal could not be filed within the allowable period and the appeal was rejected solely on the ground of delayed filing. In all such cases, filing of an appeal shall be allowed against such orders up to 31st January 2024 upon payment of pre-deposit @ 12.5% of demand in dispute. Out of 12.5%, 20% i.e. 2.5% of tax in dispute must be paid by debiting an electronic cash ledger.
(Besides the benefit of the amnesty scheme, this also indicates the possibility of payment of pre-deposit using an electronic credit ledger)
Clarification to be issued concerning the Place of Supply
(i) Supply of service of transportation of goods, including by mail or courier, where the location of the supplier or the location of the recipient of services is outside India;
(ii) Supply of advertising services;
(iii) Supply of the co-location services.
Clarification to be issued relating to the export of services
To clarify the admissibility of export remittances received in the Special INR Vostro account, as permitted by RBI, for a consideration of a supply of services to qualify as export of services.
Allowing supplies to SEZ units/developers for authorized operations through the IGST refund route (i.e. supply on payment of IGST and claiming subsequent refund) by making a suitable amendment in Notification 01/2023-Integrated Tax dated 31.07.2023.
Service Exemption
Entries at Sl. No. 3 and 3A of notification No. 12/2017-CTR dated 28.06.2017 exempts pure and composite services provided to Central/State/UT governments and local authorities in relation to any function entrusted to Panchayat/ Municipality under Article 243G and 243W of the Constitution of India. The GST Council has recommended to retain the existing exemption entries with no change.
Further, the GST Council has also recommended exempting services of water supply, public health, sanitation conservancy, solid waste management, and slum improvement and up-gradation supplied to Governmental Authorities.
Clarification to be issued:
To clarify, District Mineral Foundations Trusts (DMFT) set up by the State Governments across the country in mineral mining areas are Governmental Authorities and thus eligible for the same exemptions from GST as available to any other Governmental Authority.
Supply of all goods and services by Indian Railways shall be taxed under the Forward Charge Mechanism to enable them to avail of ITC.
Other measures:
Recommended amendments in eligibility conditions of Judicial Member and President of the GST Appellate Tribunal;
The cross charge and ISD provisions recommended in the 50th GST Council Meeting will be given effect by making suitable amendments to the GST provisions. (ISD Recommendation – Distribution of ITC in respect of input services procured by Head Office (HO) from a third party but attributable to both HO and Branch Office (BO) or exclusively to one or more BOs).