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Confidential Agenda for 55th GST Council Meeting 21st December, 2024 Volume - I GST Council Secretariat New Delhi 5th Floor, Tower-II, Jeevan Bharti Building, New Delhi 15th November, 2024 OFFICE MEMORANDUM Subject: Notice for the 55th GST Council Meeting to be held on 21st December, 2024-reg The undersigned is directed to refer to the above subject and to convey that the 55th Meeting of the GST Council will be held on 21st December, 2024 at Jaisalmer, Rajasthan. The schedule of the meeting is as follows:- Saturday, 21st December, 2024, from 11.00 A.M. onwards 2. In addition, an Officers’ Meeting will be held on 20th December, 2024 at Jaisalmer, Rajasthan as per the following schedule: Friday, 20th December, 2024 from 10.00 A.M. onwards 3. The venue of the meeting, agenda items and other details for the 55th Meeting of the GST Council and officers’ Meeting will be communicated in due course of time. 4. Kindly convey the invitation to the Hon’ble Member of the GST Council to attend the 55th Meeting of the GST Council. Sd/- (Sanjay Malhotra) Secretary to the Govt. of India and ex-officio Secretary to the GST Council Tel: 011 23092653 Copy to: 1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting. 2. PS to the Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting. 3. The Chief Secretaries of all the State Governments, Union Territories of Delhi, Puducherry and Jammu and Kashmir with the request to intimate the Minister in charge of Finance/Taxation or any other Minister nominated by the State Government as a Member of the GST Council about the above said meeting. 4. Chairman, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the Council. 5. CEO, GST Network TABLE OF CONTENTS (VOLUME-I) Sl. No. Agenda Item Page No. 1. Confirmation of Minutes of the 54th GST Council Meeting held on 9th September, 2024 9-177 2. Ratification of Notifications, Circulars and GIC Decisions by the GST Council 178-189 3. Issues recommended by the Law Committee for the consideration of the GST Council 190 i)Amendment in Section 17(5)(d) of Central Goods and Services Tax Act, 2017 consequent to judgement of Hon’ble Supreme Court dated 03.10.2024 in the case of M/s Safari Retreats Pvt. Ltd. 190-196 ii)Amendment in Schedule III of the Central Goods and Services Tax, 2017 (CGST Act, 2017) regarding supply of goods warehoused in a Free Trade and Warehousing Zone (FTWZ)/Special Economic Zone (SEZ) before clearance to Domestic Tariff Area/for Exports. 197-201 iii)Amendment in Central Goods and Services Tax Act, 2017 for incorporation of provisions relating to Track and Trace Mechanism for specified commodities. 202-207 iv)Amendment in sub-section (5) of section 9 of Central Goods and Services Act, 2017 for providing clarity regarding determination of tax liability of the electronic commerce operator in respect of specified services. 208-220 v)Clarification regarding requirement of reversal of input tax credit by electronic commerce operators in respect of supplies made under section 9(5) of CGST Act, 2017. 221-227 vi)Amendment in Rule 89 of CGST Rules, 2017 for providing the scope and computation of the refund on account of inverted duty structure as provided in sub-section (3) of section 54 of CGST Act, 2017. 228-234 vii)Miscellaneous proposals for amendment in CGST Act, 2017 235 I. Amendment in sub-section (6) of section 107 and sub-section (8) of section 112 of CGST Act, 2017 to provide for payment of pre-deposit for filing an appeal in respect of an order passed which involves only penalty amount. 235-239 II. Agenda regarding removal of levy of late fee under sub-section (1) of section 47 of the CGST Act, 2017 in respect of furnishing of details of outward supplies in FORM GSTR-1. 240-243 III. Amendment in Section 2(69)(c) of CGST Act, 2017 to insert an Explanation regarding definitions of Local Fund and Municipal Fund. 244-245 IV. Amendment in provisions pertaining to Input Services Distributor mechanism under CGST Act, 2017 and CGST Rules, 2017. 245-247 viii) Miscellaneous proposals for amendment in CGST Rules, 2017 248 I. Provision for grant of Temporary Identification Number by Tax Officers to persons not liable to be registered otherwise. 248-255 II. Agenda for allowing amendment in the field ‘category of registered person’ for taxpayers who opted composition levy through FORM CMP-02. 255-257 III. Agenda on requirement of signature or digital signature of the supplier or his authorized representative in respect of e-invoice. 257-261 ix) Clarification on availability of Input tax credit as per clause (b) of sub-section (2) of section 16 of CGST Act in respect of goods which have been delivered by the supplier at his (supplier’s) place of business. 262-269 x) Clarification regarding mentioning of correct details of name of the State of the un-registered recipient as well as correct declaration of place of supply in respect of supply of 'Online Services’. 270-277 xi) Issues pertaining to taxability of Vouchers under GST. 278-291 xii) Amendment in section 13(8)(b) of the IGST Act, 2017 in respect of place of supply of intermediary services. 292-299 xiii) Clarification regarding applicability of late fee for delay in furnishing of FORM GSTR-9C. 300-308 xiv) Amendment in CGST Act, 2017 and CGST Rules, 2017 in respect of functionality of Invoice Management System (IMS) 309-332 xv) Concept note for implementing different categories of GST registration based on Risk Assessment and aligning the Registration Process with passing on of Input Tax Credit 333-336 4. Recommendations of the Fitment Committee for the consideration of the GST Council 337 a)Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to goods (13 issues) - Annexure-I 338-348 b)Issues where no change has been proposed by the Fitment Committee in relation to goods (4 issues) - Annexure- II 349-353 c)Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to services (15 issues) - Annexure- IV 354-406 d) Issues where no change has been proposed by the Fitment Committee in relation to services (3 issues) - Annexure-V 407-413 e)Issues which have been proposed by the Fitment Committee for deferring in relation to services (2 issues) - Annexure-VI 414-418 f)Issue on which Fitment Committee has not made any recommendations and decision may be taken by GST Council (1 issue) - Annexure-VII 419-420 5. Closure of Group of Ministers (GoM) on Analysis of Revenue from GST 421 6. Recommendations of the 22nd meeting of the IT Grievance Redressal Committee for approval/decision of the GST Council 422-501 Discussion on Agenda Items Agenda Item 1: Confirmation of Minutes of the 54th Meeting of the GST Council held on 9th September, 2024 The 54th meeting of the GST Council was held on 09th September, 2024 under the Chairpersonship of the Hon’ble Union Finance Minister, Smt. Nirmala Sitharaman at Sushma Swaraj Bhawan, New Delhi. The list of Hon’ble Members of the Council who attended the meeting is at Annexure-1. The list of the officers of the Centre, States, Union Territories, GST Council Secretariat and GSTN who attended the meeting is at Annexure-2. 1.2 The following agenda items were listed for discussion in the 54th meeting of the GST Council: S.No. Agenda Item 1. Confirmation of Minutes of the 53rd GST Council Meeting held on 22nd June, 2024 2. Deemed ratification by the GST Council of the Notifications and Circulars issued by the Central Government and decisions of GST Implementation Committee for the information of the Council. 3. Issues recommended by the Law Committee for the consideration of the GST Council i) Clarification on refund of IGST paid on exports under rule 96(10) of the CGST Rules, 2017 and amendments in Rule 89 and Rule 96 of CGST Rules, 2017 ii) Clarification on the place of supply of advertising services provided to foreign entities iii) Amendment in CGST Rules, 2017 I Consequential Amendment in Form REG-20 & REG-31 due to amendment in Rules 10A, 21 (h) and 21(i) II Agenda to modify FORM INS-01 on account of replacement of IPC, 1860 with BNS, 2023 III Consequential rule and form amendments subsequent to insertion of Section 74A of CGST Act, 2017 iv) Clarification regarding the availability of Input Tax Credit on demo vehicles by the dealers of the vehicle manufacturers v) Providing a mechanism for implementing sub-sections (5) and (6) of Section 16 of the CGST Act, 2017. vi) Clarification on the place of supply in case of data hosting services provided by service providers located in India to cloud computing service providers located outside India. vii) Consequential amendments required in CGST Rules, 2017 and relevant forms subsequent to insertion of Section 128A and clarification on various related issues 4. Recommendations of the Fitment Committee for the consideration of the GST Council a) Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to goods (5 issues) – Annexure-I b) Issues where no change has been proposed by the Fitment Committee in relation to goods (7 issues) – Annexure-II c) Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to services (20 issues) – Annexure-IV d) Issues where no change has been proposed by the Fitment Committee in relation to services (15 issues)– Annexure-V e) Issues which have been proposed by the Fitment Committee for deferring in relation to services (9 issues)- Annexure-VI f) Agenda note on review of 51st GST Council meeting’s recommendation to amend GST laws to provide clarity on the taxation of supplies in casinos, horse racing and online gaming. g) Issuance of circular clarifying the scope of the phrase ' as is where is basis' h) Report of Committee of Officers on Taxation of Extra-Neutral Alcohol under GST for the past period (from 1.7.2017 to 20.10.2023) i) Status update on Group of Ministers (GoM) on Rate Rationalization j) Status update on Group of Ministers (GoM) on boosting real estate sector under GST regime 5. Recommendations of the 21st meeting of the IT Grievance Redressal Committee for approval/ decision of the GST Council 6. Performance Report of the Competition Commission of India (CCI), State Level Screening Committee (SLSC) and DG (Anti- Profiteering) for 1st quarter of the F.Y 2024-25 along with Performance Report of Standing Committee (SC) for 3rd quarter and 4th quarter of F.Y. 2023-24 and 1st quarter of F.Y 2024-25 for the information of the Council. 7. Issues recommended by GSTN (a) Integration of UPI, Credit Cards and Debit Card Payment Option by Accounting Authorities (b) B2C e-Invoicing Pilot Project (c) Enhancement in the existing GST Return Architecture 8. (a) Review of revenue position under Goods and Services Tax (b) Status update on Compensation Cess (c) IGST Settlement (d) GST Appellate Tribunal - Issues for approval (e) Sharing of personally Identifiable Information of Taxpayers with other Ministries/ Departments 9. Ad-hoc Exemptions Orders issued under Section 25(2) of the Customs Act, 1962 to be placed before the GST Council for information. 10. Any other agenda item with the permission of the Chairperson 1.3 The Secretary to the GST Council (hereinafter called ‘The Secretary’), welcomed all the Hon’ble Members of the Council and participating officers to the 54th meeting of the GST Council. He extended greetings to Smt. Aditi Tatkare, Hon’ble Minister for Women & Child Development, Maharashtra to her first GST Council meeting. 1.4 The Secretary informed the Council that the agenda for 54th Council meeting was discussed in detail during the Officers’ Meeting on the previous day which would immensely benefit the Council in its deliberations. 1.5 The Secretary sought permission of the Chair to begin deliberations on each item of the agenda 2. Agenda item 1: Confirmation of Minutes of the 53rd GST Council Meeting held on 22nd June, 2024 2.1Joint Secretary, GST Council Secretariat (GSTCS) informed the Council that the draft minutes of the 53rd GST Council meeting were circulated to all the States. She stated that during the Officers’ Meeting held on 08th September, 2024 certain changes to the draft minutes were suggested by the state of Tamil Nadu and GST Policy Wing, CBIC which were agreed to and accordingly an Addendum to the Agenda for the 54th GST Council Meeting had been circulated during the Council meeting. 2.2The Council took note of the changes proposed through the Addendum to the minutes of the 53rd GST Council meeting. The Secretary requested the Council to adopt the minutes of the 53rd meeting of the GST Council. Decision: The Council adopted the Minutes of the 53rd meeting of the GST Council held on 22nd June, 2024. 3. Agenda Item 2: Deemed ratification by the GST Council of the Notifications and Circulars issued by the Central Government and decisions of GST Implementation Committee for the information of the Council 3.1 The Secretary took up the next item of agenda pertaining to the deemed ratification by the GST Council of the Notifications and Circulars issued by the Central Government and decisions of GST Implementation Committee for the information of the Council. 3.2 Pr. Commissioner, GST Policy Wing stated that based on recommendations of the 53rd GST Council Meeting, 5 Central Tax Notifications, 3 Central Tax (Rate) Notifications, 1 Integrated Tax Notification, 3 Integrated Tax (Rate) Notifications, 1 Union Territory Tax Notification, 3 Union Territory Tax (Rate) Notifications and 1 Compensation Cess (Rate) Notification had been issued from 14.06.2024 till 17.08.2024. Further, 22 Circulars under the CGST Act had been issued during the said period. 3.3 The Secretary requested the Council to ratify the Notifications and Circulars issued. Decision: The Council ratified the Notifications and Circulars issued and took note of the decisions of the GST Implementation Committee. Agenda Item 3: Issues recommended by the Law Committee for the consideration of the GST Council The Secretary took up the next agenda which were issues recommended by the Law Committee for the consideration of the GST Council. He informed that these agendas were discussed in detail in the Officers’ meeting held on 08th September,2024 and that there was an agreement among the officers on most of the issues. Agenda Item 3(i): Clarification on refund of IGST paid on exports under rule 96(10) of the CGST Rules, 2017 and amendments in Rule 89 and Rule 96 of CGST Rules, 2017. 4.1 Pr. Commissioner, GST Policy Wing stated that representations have been received from trade and industry requesting for clarification on restriction imposed vide rule 96(10) of the Central Goods & Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules) in respect of availment of the refund of IGST on goods exported if benefits of certain concessional/exemption notifications have been availed on inputs/raw materials imported or procured domestically. 4.2 Pr. Commissioner, GST Policy Wing informed that the Law committee had deliberated on the following two issues: Issue 1: Regularization of refund of IGST in cases where the exporters had imported certain inputs without payment of integrated taxes and compensation cess by availing the benefits under notification No. 78/2017- Customs dated 13.10.2017 or notification No. 79/2017-Customs dated 13.10.2017 and are now ready to pay the said IGST and compensation cess amount, along with interest: The Law Committee recommended that a clarification may be issued through a Circular that in such cases, where the inputs were initially imported without payment of integrated tax and compensation cess by availing benefits under notification No. 78/2017-Customs dated 13.10.2017 or notification No. 79/2017- Customs dated 13.10.2017, but subsequently, IGST and compensation cess on such imported inputs is paid at a later date, along with interest, and the Bill of Entry in respect of the import of the said inputs is got reassessed through the jurisdictional Customs authorities to this effect, then the refunds of IGST sanctioned may be considered to be regularized in light of the explanation to rule 96 (10) of CGST Rules. Issue 2: Review of the provisions of rule 96 (10) & rule 89 (4A) and rule 89 (4B) of CGST Rules: The Law Committee observed that operation of rule 96(10) is leading to unnecessary complications without any intended benefit being served and therefore recommended that rule 96(10), rule 89(4A) & rule 89(4B) of the CGST Rules,2017 may be omitted with prospective effect and that consequential amendments in clause (b) of sub-rule (4B) of rule 86, clause B, clause C and clause E of sub-rule (4) of rule 89 and Explanation (a) to sub-rule (5) of rule 89 of CGST Rules may be made. The Law Committee also recommended that after the proposed deletion of rule 89(4A) and 89(4B) of CGST Rules, 2017, in the cases where the benefit of concessional/ exemption notifications which were specified in rule 96 (10) or rule 89 (4A) or (4B) had been availed on inputs imported or procured domestically, the refund on account of exports can be claimed through the IGST refund route under rule 96 of the CGST Rules, 2017 or as refund of accumulated Input Tax Credit (ITC) under rule 89(4) of CGST Rules. Decision-The Council agreed with the recommendations of the Law Committee to omit rule 96(10), rule 89(4A) & rule 89(4B) and forthe consequential amendment in clause (b) of sub-rule (4B) of rule 86, clause B, clause C and clause E of sub-rule (4) of rule 89 and Explanation (a) to sub- rule (5) of rule 89 of CGST, Rules, 2017 along with proposed circular. Agenda Item 3(ii): Clarification on the place of supply of advertising services provided to foreign entities. 4.3 Pr. Commissioner, GST Policy Wing informed that representations have been received from trade and industry requesting for clarification regarding place of supply of the advertising services being provided by Indian advertising companies/agencies to foreign entities, as they are denied export benefits considering the place of supply of the said services as within India. 4.4 He informed that the Law Committee broadly examined the following issues and recommended as follows: Issue No 1: Whether the advertising company can be considered as an intermediary between the foreign client and the media owners in terms of section 2(13) of IGST Act, 2017 thereby resulting in determination of place of supply under section 13(8)(b) of the IGST Act, 2017? The advertising company is involved in the main supply of advertising services, including resale of media space to the foreign client, on principal-to-principal basis as detailed above and does not appear to fulfil the criteria of “intermediary” under section 2(13) of the IGST Act and the said circular dated 20.09.2021. Thus, the advertising company cannot be considered as “intermediary” in such a scenario and accordingly, the place of supply in the instant matter cannot be determined as per section 13(8)(b) of the IGST Act. However, in cases where advertising company acts merely as an agent of foreign client for arranging media space from media owner, and does not provide services on principal-to-principal basis, the advertising company would be treated as “intermediary” in accordance with section 2(13) of IGST Act and place of supply of such services provided by the advertising company would be determinable as per section 13(8)(b) of IGST Act, i.e., the place of location of the advertising company. Issue No 2: Whether the representative of foreign client in India or the target audience of the advertisement in India can be considered as “recipient” of the services being supplied by the advertising company under section 2(93) of CGST Act, 2017? As, the foreign client is liable to pay the consideration to advertising company for the supply of advertising services, the recipient of the advertising services provided by the advertising company is the foreign client, and not the Indian representative of the foreign client based in India or the target audience of the advertisements in India as per section 2(93) of CGST Act, 2017. Issue No 3: Whether the advertising services provided by the advertising companies to foreign clients can be considered as performance-based services as per section 13(3) of the IGST Act, 2017? The services being provided by the advertising company are neither in respect of goods being made physically available by the recipient of services, nor require physical presence of the recipient with the advertising company for availing such services, and accordingly, such services cannot be considered as performance based services under section 13(3) of IGST Act. Accordingly, the place of supply of such advertising services does not appear to be covered under any of the provisions of sub-sections (3) to (13) of the Section 13 of the IGST Act, 2017, and therefore, place of supply of the such advertising services shall be the location of the said foreign client, i.e., outside India, as per Section 13(2) of IGST Act, 2017. Decision: The Council agreed with the recommendation of the Law Committee with regard to clarification on the place of supply of advertising services provided to foreign entities along with the proposed circular. Agenda Item 3(iii): Amendment in CGST Rules, 2017. Agenda 3(iii) (I) : Consequential Amendment in Form REG-20 & REG-31 due to amendments in Rules 10A, 21 (h) and 21(i) of CGST Rules, 2017. 4.5 Pr. Commissioner, GST Policy Wing stated that the Law Committee has recommended amendments in FORM GST REG-20 & FORM GST REG-31 to align the same with the current GST Act/Rules. 4.6 He informed that in the discussions during the Officers’ meeting, the State of Punjab has suggested that in the relevant GST Rules for FORM REG-20, the number of days within which the bank details have to be submitted by the registered person may be reduced from the existing 30 days to 15 days post registration. However, such changes need amendment to the rules and it would be examined in detail by the Law Committee. He, therefore, had requested the State of Punjab to submit a proposal in this regard to the Law Committee for examination. 4.7 Pr. Commissioner, GST Policy Wing further informed that during the officers’ meeting, the State of Tamil Nadu has suggested that in FORM GST REG-31, the words ‘jurisdictional officer’ and ‘jurisdictional tax officer’ may be replaced with the words ‘jurisdictional proper officer’ in order to align the same with the Act. He stated that the changes suggested by the state of Tamil Nadu would require changes at several places and correcting at one place would not serve the purpose. However, as the anomaly has been brought to the notice, in order to ensure standardization and uniformity, the issue will be examined separately by the Law Committee in detail and shall be brought before the Council as soon as it is examined. Decision: The Council agreed with the proposed amendments recommended by Law Committee in FORM GST REG-20 and FORM GST REG-3.1. The issues raised by the states of Tamil Nadu and Punjab to be examined separately. Agenda 3(iii) (II) : Amendment in FORM INS-01 in the light of enactment of Bharatiya Nyaya Sanhita (BNS), 2023 4.8 Pr. Commissioner, GST Policy Wing informed that the Law Committee proposed amendment in FORM GST INS-01 to replace the references to various sections of the Indian Penal Code (IPC), 1860 in the said form with that of Bharatiya Nyaya Sanhita (BNS), 2023 and recommended that the proposed changes in Form GST INS-01 are necessary to reflect the provisions of BNS, 2023. Decision: The Council agreed with the proposed amendments recommended by Law Committee in Form GST INS-0. Agenda 3(iii) (III): Amendment in Rules and Forms due to insertion of section 74A in CGST Act, 2017 4.9 Pr. Commissioner, GST Policy Wing informed that subsequent to the insertion of Section 74A in the CGST Act, 2017, the Law Committee recommended consequential amendments in rule 36(3), rule 88B(1), rule 88D(3), rule 96B(1), rule 121 and rule 142 of the CGST Rules, 2017 and FORM GST DRC-01A. 4.10 The Law Committee also recommended that in the dropdown option for “Section / sub-section under which SCN is being issued” in FORM GST DRC-01 on the common portal, options for ‘Issuance of demand under section 74A(1) read with section 74A(5)(i)’ and also for ‘Issuance of demand under section 74A(1) read with section 74A(5)(ii)’ may be provided, so that the data regarding the number and notices issued under section 74A invoking charges of fraud, willful misstatement, suppression of facts etc. and those not invoking those charges is readily available for MIS. Decision: The Council agreed with the recommendations of the Law Committee along with proposed amendments in rule 36(3), rule 88B(1), rule 88D(3), rule 96B(1), rule 121 and rule 142 of the CGST Rules, 2017 and FORM GST DRC-01A. Agenda Item 3(iv): Clarification on availability of input tax credit in respect of Demo vehicles. 4.11 Pr. Commissioner, GST Policy Wing stated that representations have been received from trade and industry for issuance of clarification regarding availability of input tax credit (ITC) on Demo vehicles, as divergent views have been taken in multiple advance rulings due to varied interpretation of provisions of sub-clause (A) of clause (a) of section 17(5) of CGST Act, 2017 on the same matter. 4.12 The issue was deliberated by the Law Committee and it recommended to clarify the following issues through issuance of a Circular: 1.Availability of input tax credit on Demo vehicles, which are motor vehicles for transportation of passengers having approved seating capacity of not more than 13 persons (including the driver), in terms of clause(a) of section 17(5) of CGST Act. 2.Availability of input tax credit on Demo vehicles in respect of capitalization of such vehicles in books of account by the authorized dealers. 4.13 The Law Committee recommended that when demo vehicles are used by authorized dealers to provide trial run and to demonstrate features of the vehicles to potential buyers with the aim of promoting the sale of similar motor vehicles, they may be considered as being used for the purpose of making a "further supply of such motor vehicles." As a result, input tax credit on demo vehicles is not blocked for dealers under clause (a) of section 17(5) of the CGST Act, as it is excluded from such blockage in terms of sub-clause (A) of the said clause. However, if the dealer merely acts as an agent or service provider for the vehicle manufacturer, offering marketing services or providing test drive facilities to potential customers on behalf of the manufacturer without directly engaging in the sale or purchase of vehicles, in such cases the dealer is not making the supply of motor vehicles on his own account. Therefore, the demo vehicles purchased by the dealer cannot be considered as being used for making a "further supply of such motor vehicles." Accordingly, the Law Committee has recommended that in such cases, input tax credit on Demo vehicles would not be available to the dealer, in accordance with section 17(5)(a) of the CGST Act. 4.14 The Law committee has also opined that availability of input tax credit on Demo vehicles is not affected by way of capitalization of such vehicles in the books of account of the authorized dealers, subject to other provisions of the Act i.e. section 16(3) of CGST Act, 2017. 4.15 Pr. Commissioner, GST Policy Wing further stated that during the Officers’ meeting held on 08.09.2024, it was generally agreed that there may be a need for a comprehensive review of the provisions under Section 17(5) of the CGST Act, which pertain to the blocking of input tax credit (ITC). While this review is not required immediately, the need for it has been highlighted by multiple requests and observations. Decision: The Council agreed with the recommendations of the Law Committee with regard to clarification on availability of input tax credit in respect of Demo vehicles along with the proposed Circular. Agenda Item 3(v): Implementation of provisions of sub-section (5) and sub- section (6) in section 16 of CGST Act. 4.16 Pr. Commissioner, GST Policy Wing stated that the GST Council in its 53rd meeting recommended to retrospectively amend section 16 of the CGST Act, 2017 with effect from 01.07.2017: a)to provide that the time limit to avail input tax credit under Section 16(4) of CGST Act, through any FORM GSTR 3B filed till 30/11/2021 for the financial years 2017-18, 2018-19, 2019-20 and 2020-21, be deemed to be 30.11.2021 and b)to allow for relaxation of conditions under Section 16(4) of the Act, in cases where the returns for the period from the date of cancellation of registration/effective date of cancellation of registration till the date of revocation of cancellation of registration are filed after revocation of cancellation of registration. It was also recommended that no refund of tax already paid, or input tax reversed would be allowed on account of these retrospective amendments. 4.17 He further informed that in order to implement the above recommendations of the Council, sub-section (5) and sub-section (6) have been inserted in section 16 of CGST Act, 2017 vide section 118 and 150 of the Finance (No. 2) Act, 2024. These provisions are, however, yet to be notified. 4.18 Pr. Commissioner, GST Policy Wing stated that several representations have been received from trade and industry requesting for clarification in respect of various issues pertaining to availment of benefit of the said amendments in section 16 of CGST Act, to the taxpayers against whom demands have been issued alleging wrong availment of input tax credit in contravention of provisions of sub-section (4) of section 16 of CGST Act, who are now entitled to avail the said input tax credit as per the retrospectively inserted provisions of sub-section (5) or sub-section (6) of section 16 of the CGST Act. It has further been requested that in respect of cases where the appeals have either not been filed against demand orders/ appellate orders or the time to file appeal against the said orders has already expired, the benefit of the inserted provisions may be made available without the need for filing appeals, or without requirement of payment of pre- deposit for filing appeals for vacating the demands already created. It has been represented that denial of benefit in cases where time for filing of appeals is already over, or demanding pre-deposit for filing appeals in such cases would defeat the purpose of said relief being provided through the said sub-sections and would not only result in locking of the funds of the taxpayers but would also result in subsequent workload of tax officers in processing the refund applications in respect of such pre-deposits paid. 4.19 Law Committee examined the issue and observed that different scenarios may emerge where relief under sub-section (5) or sub-section (6) of section 16 of CGST Act may be available to the taxpayers and to implement the said provision, Law Committee made the following recommendations: a.As provisions of sub-section (5) and sub-section (6) of section 16 of the CGST Act are to come into force retrospectively with effect from 1st July, 2017, section 118 and 150 of the Finance (No. 2) Act, 2024, may be notified by the Central Government at the earliest with the recommendations of the Council. Whenever the States will notify the concerned provisions in their respective SGST Acts, the same will also come into effect from 1st July, 2017. This will help in early implementation of the intended relief being provided to the taxpayers through the insertion of said provisions. b.In respect of cases, where demand notice has not been issued; or where demand notice has been issued but order has not been passed by the adjudicating authority; or where order has been passed by the adjudicating authority and appeal has been filed but no appeal order has been passed; or where order has been passed by the adjudicating authority and revision proceedings have been initiated but no order has been passed by the revisional authority, the concerned proper officer/ adjudicating officer/ appellate authority/ revisional authority may decide the case by taking into consideration the said provisions of sub-section (5) and sub-section (6) of section 16 of CGST Act. c.In respect of cases, where demand order has been issued confirming the demand but where no appeal has been filed with the appellate authority yet, or where appeal order has been issued by the appellate authority or order has been issued by the revisional authority but no appeal has been filed with Appellate Tribunal yet, and the benefit of sub-section (5) and sub-section (6) of section 16 of CGST Act is now available, a special procedure for rectification of the said orders under section 148 of the CGST Act to be followed by such class of taxable persons may be notified. The said special procedure may provide for filing of such application for rectification of order within a period of six months from the date of issuance of the said notification and the proper officer may be required to take a decision on the said application for rectification and issue the order within a period of three months from the date of filing of application for rectification, as far as possible. Whenever the States will notify the said provisions of sub-section (5) and sub-section (6) of section 16 in their respective SGST Acts, they will also notify the said special procedure under section 148 of their respective SGST Acts with effect from the date on which the Centre had issued the said notification. d.A circular clarifying the action to be taken by the tax authorities and/ or by the taxpayers may be issued after issuance of the notification under section 148 of the CGST Act mentioned above. e.An MIS may be made available by GSTN for tax authorities inter alia including the number of cases where rectification application filed, number of cases where application is disposed of and number of cases where the application is pending for more than three months, enabling them to monitor the progress of the action taken by the tax officers in respect of the applications for rectification filed under the above special procedure. 4.20 The Hon’ble Member from Delhi emphasized that the recent amendment will present significant challenges for the state, as over 100,000 notices issued for the years 2017-18 and 2018-19 will now require rectification. This will result in a considerable administrative burden. 4.21 Pr. Commissioner, GST Policy Wing clarified that this issue was discussed in detail during the last meeting. Several states had issued notices, but the amendment was brought to provide relief to taxpayers who faced difficulties due to a lack of knowledge about the time limits during the initial years of implementation of GST. The Pr. Commissioner emphasized that this relief is not intended to be permanent. 4.22 The Hon’ble Member from Uttar Pradesh also observed that since the matter had been deliberated and discussed in detail in the last GST Council meeting and had attained finality, therefore, the same may not be re-opened. 4.23 Pr. Commissioner, GST Policy Wing further informed that officer from State of Bihar had inquired whether rectifications could be made in cases where amount of ITC has already been recovered, to which it was clarified that while there is no restriction on rectifying an order, a refund of the tax that has already been paid or recovered is not available. 4.24 Pr. Commissioner, GST Policy Wing also informed that the State of Andhra Pradesh has suggested an addition to the proposed circular concerning refunds. Currently, the draft of proposed circular states that refunds of tax already paid or ITC already reversed are not available under Section 150 of the Finance (No.2) Act, 2024. However, there is uncertainty about whether this restriction also applies to pre-deposit amounts paid while filing of an appeal, especially if the appeal is decided in favour of the taxpayer due to the new provisions. So it was decided that the following clarification be added at the end of paragraph four of the draft circular as detailed in agenda note, “However, it is clarified that said restriction on refund under section 150 of the Finance (No. 2) Act, 2024 will not apply to the refund of an amount paid as pre-deposit by the taxpayer as per sub-section (6) of section 107 or sub-section (8) of section 112 of the CGST Act, at the time of filing of an appeal, where such appeals are decided in favour of the said taxpayer.” Decision: The Council agreed with the recommendations of the Law Committee along with the proposed notifications and Circular including the amendment as proposed by the State of Andhra Pradesh. GSTN to provide MIS to enable tracking of applications for rectification. Agenda Item 3(vi): Clarification on place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India. 4.25 Pr. Commissioner, GST Policy Wing stated that representations have been received from the trade and industry seeking clarification on the place of supply of data hosting services provided by service providers located in India to clients (cloud computing service providers) located outside India. 4.26 The Law Committee examined the issue and recommended to clarify that: (a)Data hosting services provided by data hosting service provider to its overseas cloud computing service providers cannot be considered as intermediary services and hence, the place of supply of the same cannot be determined as per section 13(8) (b) of IGST Act. (b)Data hosting services provided by data hosting service provider to the said cloud computing service providers cannot be considered in relation to the goods “made available” by the said cloud computing service providers to the data hosting service provider in India and hence, the place of supply of the same cannot be determined under section 13(3) (a) of the IGST Act. (c)Data hosting services cannot be considered as services provided directly in relation to immovable property or physical premises and hence, the place of supply of such services cannot be determined under section 13(4) of IGST Act. (d)The place of supply for the data hosting services provided by the data hosting service provider in India to overseas cloud computing service providers does not fit into any specific provisions outlined in sections 13(3) to 13(13) of the IGST Act. Therefore, according to the default provision under section 13(2) of the IGST Act, the place of supply is determined to be the location of the recipient of the services. Where the cloud computing service providers receiving the data hosting services are located outside India, the place of supply is considered to be outside India according to section 13(2) of the IGST Act. (e)The supply of data hosting services being provided by data hosting service provider located in India to an overseas cloud computing entity can be considered as export of services, subject to the fulfilment of the other conditions mentioned in section 2(6) of IGST Act. Decision: The Council agreed with the recommendations of the Law Committee with regard to clarification on place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India along with the proposed Circular. Agenda Item 3(vii): Consequential amendments required in CGST Rules, 2017 and relevant forms subsequent to insertion of Section 128A and clarification on various related issues. 4.27 Pr. Commissioner, GST Policy Wing stated that the GST Council in its 53rd meeting held on 22nd June 2024, had recommended insertion of Section 128A in the CGST Act, 2017 to provide for a waiver of interest or penalty or both, relating to tax demands under Section 73 pertaining to FYs 2017-18, 2018-19 and 2019-20. Section 146 of Finance (No.2) Act, 2024 provides for the same. Subsequent to the insertion of said section, corresponding rules are required to be inserted in Central Goods and Services Tax Rules, 2017, along with new forms in order to implement the same. 4.28 The Law Committee in its meetings held on 09.08.2024, 23.08.2024, 29.08.2024 and 02.09.2024 discussed the procedure for implementation of Section 128A of CGST Act in detail and recommended to insert Rule 164 in CGST Rules, as detailed in the agenda note. The Law Committee also recommended insertion of eight new Forms viz. FORM GST SPL -01, FORM GST SPL -02, FORM GST SPL -03, FORM GST SPL -04, FORM GST SPL -05, FORM GST SPL -05A, FORM GST SPL -06 and FORM GST SPL-07 in CGST Rules, 2017, as detailed in the agenda note. Further, the Law Committee also recommended issuance of a circular to clarify the procedure to be followed by the taxpayers and the tax officers in order to avail and implement the benefit provided under Section 128A of the CGST Act. The Law Committee also recommended for issuance of the notification under sub-section (1) of Section 128A of CGST Act in order to provide for a date on or before which the payment of tax may be made by different class of registered persons, to avail the benefit of waiver of interest or penalty or both provided under Section 128A of the CGST Act. Pr. Commissioner, GST Policy Wing informed that in the Officers’ meeting it was proposed that this date should be finalized as 31.03.2025. He informed that in order to implement Section 128A, it must be officially notified. The Council will need to set an effective date for this provision as well as the other provisions of the Finance Act. It was agreed in the Officers’ meeting held on 08.09.2024 to recommend notifying Section 128A of the CGST Act with effect from 01.11.2024 for both the Centre and States. Decision: The Council agreed with the recommendations of the Law Committee for implementation of section 128A along with the proposed notifications, Circular and Forms and the decision in the Officers’ meeting regarding date for the notifying related provisions of the Finance Act. Agenda Item 4: Recommendations of the Fitment Committee for the consideration of the GST Council. 5.1 The Secretary introduced the agenda item relating to the recommendations of the Fitment Committee and requested the Joint Secretary, Tax Research Unit-I (TRU-I) to present the agenda. 5.2 Joint Secretary, TRU-I stated that the Fitment Committee agenda was summarized in five Annexures (I, II, IV, V and VI) wherein total 56 issues (12 issues related to Goods and 44 issues related to Services) were recommended. She stated that the Fitment Committee had recommended making changes in the rate or issue of clarification in case of 06 issues and no change was recommended in respect of 07 issues in case of goods. In case of services, there were a total of 44 agenda items, out of which the Fitment Committee had recommended making changes in the rate or issue of clarification in case of 20 items and no change has been recommended in respect of 15 items and 09 items have been deferred for the examination. Agenda Item 4(a) Thereafter, Joint Secretary, TRU-I presented the agendas pertaining to the recommendations of the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to goods. 5.3 The first item for the consideration of the Council was a request to clarify whether Roof Mounted Package Unit air conditioners for railways are classifiable under HS 8607 as railway parts or under HS 8415 as air conditioning machines. The applicable GST rate on parts of railway under HS 8607 is 18% while air conditioning machines are classified under HS 8415 and attract 28% GST rate. Fitment Committee had recommended that there is no ambiguity in classification but in order to make it explicitly clear recommended the issue of clarification that Roof Mounted air conditioners for railways would be classified under HS 8415 attracting a GST rate of 28%. Decision: The Council approved the recommendation of the Fitment Committee to issue a clarification that Roof Mounted Package Unit air conditioners for railways would be classified under HS 8415 attracting a GST rate of 28%. 5.4 Joint Secretary, TRU-I presented the agenda item pertaining to classification of car seats as to whether the same are classifiable under HS 9401 or 8708. Fitment Committee recommended that there is no ambiguity in the GST rate of car seats which are classifiable under HS 9401 attracting 18% while seats for two-wheeler motor vehicles would fall under HS 8708 and attract 28%. However, to ensure parity, Fitment Committee recommended that prospectively car seats should attract a rate of 28%. Decision: The Council approved the recommendation of the Fitment Committee that there is no ambiguity in the GST rate of car seats which are classifiable under HS 9401 attracting 18% while seats for two wheeler motor vehicles would fall under HS 8708 and attract 28% GST. The Council also approved the recommendation to tax car seats at 28% prospectively. 5.5 Joint Secretary, TRU-I presented the agenda item pertaining to extruded snack pellets. She stated that based on the recommendations of the GST Council in the 48th meeting, it was clarified that snack pellets, manufactured through a process of extrusion, are classifiable under HS 1905 attracting a GST rate of 18%. Based on the recommendation of the GST Council in its 50th meeting, the GST rate on uncooked or unfried snack pellets was reduced to 5%. The issue was whether the supply of extruded snack pellets in ready to eat form are covered under the category of namkeens as there is no definition of namkeens and there are disputes because of different rates on extruded or expanded snack pellets and namkeens. There are diverse practices in the field. Therefore, to avoid disptues, the Fitment Committee recommended to reduce the rate on extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30, from 18% to 12% at par with namkeens, bhujia, mixture, chabena (pre-packaged and labelled) and similar edible preparations in ready for consumption form which are classifiable under HS 2106 90. The GST rate of 5% will continue on un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion. The Fitment Committee also recommended to clarify that the reduced GST rate of 12% on extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30 is applicable prospectively. While the proposal was being discussed in the Officers’ meeting, there were requests from certain states that there is a need to look at the whole food sector to reduce complexities and to simplify the issues therein. If the Council approves, the same would be referred to the Fitment Committee to look at the entire food sector holistically. 5.6 The Hon’ble Member from Karnataka stated that he supports the suggestion but would like to advise the Fitment Committee to discuss the issue of food sector in the GoM also. He agreed in principle to the recommendation of the Fitment Committee but the same needs to be looked at from a health point of view also. He stated that under the broad category of namkeens, there are a wide variety of packaged foods. There are Indian namkeens, and whether they are healthy or not, and whether there is a need for a preferential treatment needs to be looked into, but it might be a sentimental issue as people are attached to Indian Namkeens. However, treating all packaged foods which have ill effects on our health and giving them the benefit of a reasonable rate, if not a lower rate, is definitely not advisable. So, the Hon’ble Member requested the Council that the need for simplification -should not end up supporting consumption of these highly addictive products which are injurious to health - and most of the consumers are in the younger age brackets and it is having a huge impact on the health of our society. The rise in juvenile diabetes, obesity and its consequent effects on the overall society and economy cannot be quantified. So, the request is to treat this within the broader idea of simplification but not to pass on any favourable consideration to foods which have ill effect on the health especially of the younger generation and which are of an addictive nature. These products have made their way into every village, nook and corner, roadside shops and even into the deepest corners of Ladakh’s trekking routes. So, their reach is quite humongous and we need to be mindful of their impact on the society. 5.7 Hon’ble Chairperson stated that she agreed with the Hon’ble Member from Karnataka and said that rather than taxing based on whether food items are pre- packaged or not, they could be taxed on the basis of whether they are essential or non-essential in nature. Non-essential food products could be taxed at a higher rate. Therefore, on this particular issue there are so many different calibrations which may be necessary from health, from consumption point of view and also every pre-packaged food may or may not to be essential. It is now becoming essential for many of the urban households to rely on pre-packaged food, but yet health consciousness is a factor. So keeping all this in mind the suggestion of Hon’ble Member from Karnataka is for a Group of Ministers to also look into it. However, since the GoM exists already, the Fitment Committee should take these points which have been highlighted for taking decision on the same. 5.8 The Hon’ble Member from Uttar Pradesh welcomed the proposal of the Fitment Committee and stated that the question here is whether extruded or expanded snack pellets are to be taxed at 5% or 12% or 18%. The submission of the Hon’ble Member from Karnataka on the ill effects of packaged food on health needs to be looked into by the FSSAI. On the other hand, the issue before the Fitment Committee is the tax rate on such food products. His submission was that chana, layi and chura which are very commonly used by people who are below poverty line, should be taxed at a lower rate. He stated that overall the guiding principle for taxation should be uniformity. Additionally, if there are health concerns, the same should be looked into by FSSAI for resolving the same. He requested for a reduced rate for gram or chana when packaged and labelled, by having a separate category for the same. 5.9 The Hon’ble Member from Kerala stated that for a detailed discussion on food items, including discussion on their impact on the health of the consumers, there is already a GoM where such issues could be discussed. The Hon’ble Member further stated that the basic issue is that all items could not be bracketed in the same category and his suggestion was that the GoM take up these issues for discussion. 5.10 The Hon’ble Member from West Bengal expressed agreement with the Hon’ble Members from Kerala and Uttar Pradesh, and stated that this has to be looked into from different angles. She stated that the health issue is very important, but simultaneously items like chura, chana etc. can be looked into with a different tax perspective also. The Hon’ble Member desired a detailed discussion on the same and the recommendations to be placed before the Council. 5.11 The Hon’ble Member from Meghalaya stated that he agreed with the opinions which had been expressed by the rest of the Members on the aspect of health and taxation. He stated that the Council should also take into consideration the health impact of products, but the question also arises as to who is the competent authority to certify whether a particular food item is healthy or not. He stated that sometimes, it might also be the case that some products are healthy, but are manufactured in a wrong or unhealthy way and with spurious/unhealthy/wrong ingredients. He opined that there are many angles to the entire classification of what is healthy and what is not. He stated that he was in agreement with the opinion of Hon’ble Member from Kerala that there is need for a competent authority to look into all these issues and these are way too complicated for the GST Council to look into. Since the GoM has been set up, it may approach the competent authorities that can classify food products into what is healthy and what is not, not only in terms of the ingredients of the product, but also the process by which it is made. He stated that the GoM would be the proper authority and they can consult the necessary competent agencies to determine whether or not a food product has an adverse health impact. 5.12 The Hon’ble Chairperson stated that the CBIC had approached the FSSAI for guidance on issue of which food items are healthy, that an attempt has already been made to approach FSSAI as the competent authority which was referred to by the Hon’ble Members from Meghalaya and Uttar Pradesh. The same would be placed before the Council as soon as a reply is received, and the Fitment Committee and the GOM can benefit from it. 5.13 The Secretary said these observations have been taken into account and the approval of the Council for these particular items viz. extruded or expanded snack pellets is being sought. 5.14 Joint Secretary, TRU-I stated that there is a request to regularize the matter for the past on extruded products in ready-to-eat form. She stated that the same had been discussed in the Officers’ meeting and the officers felt that this matter should be sent back to the Fitment Committee for examination. 5.15 The Secretary stated that the Fitment Committee can examine whether or not there is a need to regularize the matters for the past. Decision: The Council agreed to the recommendation of the Fitment Committee to reduce the rate on extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30, from 18% to 12% at par with namkeens, bhujia, mixture, chabena (pre- packaged and labelled) and similar edible preparations in ready for consumption form which are classifiable under HS 2106 90. The GST rate of 5% will continue on un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion. The Council also recommended to clarify that the reduced GST rate of 12% on extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30 is applicable prospectively. It also recommended that the GoM on Rate Rationalization will look in into the issue of food items holistically with the help of reply from FSSAI and place the recommendations before the Council. Further, the Council recommended that the Fitment Committee may examine the issue of regularizing the matters for the past period. 5.16 Joint Secretary, TRU-I presented the agenda item on metal scrap. She informed the Council that the issue had been discussed in the 45th and 47th Council meetings Fitment Committee after examination has recommended to introduce RCM on supply of metal scrap from unregistered person to registered person and also to introduce TDS at 2% on supply of metal scrap from registered person to registered person. The RCM is being recommended subject to the condition that the supplier will take registration as and when it crosses the threshold and also that the recipient who is liable to pay under RCM shall pay tax even though the supplier is under the threshold.. However, two additional issues were raised for further examination by the Fitment Committee: reducing the GST rate on scrap from 18% to 5%, and making E-way bills mandatory for all scrap supplies, regardless of value. These suggestions were based on requests from Tamil Nadu, Punjab, and Telangana. 5.17 The Hon’ble Member from Punjab informed that they had proposed to introduce 5% under RCM with ITC along with 2% TDS. The proposal also included implementation of e-way bill on all such B2B transactions. 5.18 The Secretary informed that keeping in mind request from Punjab, the pending issues will also be taken up by the Fitment Committee. 5.19 The Hon’ble Member from Uttar Pradesh expressed that there is no justification for reducing the rate, as it would create multiple issues. They were in favour of retaining the GST rate at 18%. 5.20 The Hon’ble Member from Karnataka expressed agreement with views of the Hon’ble Member from Uttar Pradesh. 5.21 The Hon’ble Member from Andhra Pradesh supported the views of the Hon’ble Member from Uttar Pradesh and added that the decision is a positive step which they fully endorse. Decision: The Council approved the recommendation of the Fitment Committee to introduce TDS @2% on supply of metal scrap by registered person to registered person (B to B) and RCM on supply of metal scrap by unregistered person to registered person. The Council recommended that mandatory generation of e-Way bills for supply of scrap be studied further by the Fitment Committee. 5.22 Joint Secretary, TRU-I presented the next agenda item. She stated that a request was received from the Ministry of Health and Family Welfare to reduce the GST rate from 12% to 5% on three drugs viz. Trastuzumab Deruxtecan, Osimertinib and Durvalumab used in the treatment of lung cancer, biliary tract cancer and breast cancer. In the July 2024–25 budget, these drugs were fully exempted from customs duty. The Fitment Committee recommended to reduce the GST rate from 12% to 5% which was agreed in the Officers’ meeting. Decision: The Council approved the recommendation of the Fitment Committee to reduce the GST rate from 12% to 5% on all the three drugs namely Trastuzumab Deruxtecan, Osimertinib and Durvalumab. 5.23 Joint Secretary, TRU-I presented the agenda item for issuing a clarification on the scope of regularization done on 'as is where is' basis. The Council has generally recommended regularization in cases where there were genuine doubts, ambiguity in the language of the notification, or diverse interpretations leading to disputes. The Fitment Committee recommended issuing a circular to clarify the scope of regularisation done on 'as is where is' basis. Decision: The Council approved the issuance of a Circular to clarify the scope of regularisation done on ‘as is where is’ basis. Agenda item 4(b): Issues where no change has been proposed by the Fitment Committee in relation to goods 5.24 JS, TRU-I stated that requests have been received to issue a clarification on the rate of paper sacks for the period prior to September 30, 2021. Previously, there was a dispute regarding corrugated and non-corrugated boxes, as they attracted differential rates of 12% and 18%, which were later harmonized to 18%. In the 53rd GST Council meeting, the rate of these boxes was reduced to 12%. As there had never been any doubt or ambiguity regarding the rate on paper sacks which have always attracted a GST rate of 18%, the Fitment Committee recommended maintaining status quo. 5.25 The Hon’ble Minister from Maharashtra informed that along with several other states, they have implemented a ban on plastic bags to promote eco-friendly and environmentally friendly alternatives. She further noted that as part of this initiative, they are encouraging the use of paper sacks and paper bags across various municipal corporations and urban areas. In the 53rd GST Council meeting, a recommendation was made to reduce the GST rate on corrugated boxes made of paperboard to 12%. In line with this, she requested that the GST rate on paper sacks also be reduced to 12%. She emphasized that such a reduction would further the goal of increasing the use of paper sacks and paper bags over plastic alternatives in urban and semi-urban areas, thus supporting eco-friendly and environmentally friendly materials and products. She urged the Fitment Committee to consider this request. 5.26 The Secretary noted that while the initial request was for clarification regarding the past period, if the current request is for a prospective exemption, the same can be referred to the Fitment Committee. 5.27 The Hon’ble Chairperson stated that the decision for the past period should remain unchanged to avoid confusion with previous decisions. She further stated that for the prospective period, whether a complete exemption or a reduction to 12% is appropriate will need further review and urged Fitment Committee to examine it. However, subject to the Council’s view, the Chairperson suggested refraining from making changes retrospectively and instead allowing the Fitment Committee to evaluate for the prospective period. Maharashtra was requested to send detailed proposal. 5.28 The Hon’ble Member from Meghalaya stated that in addition to what the Hon’ble Minister from Maharashtra mentioned, they are also promoting biodegradable bags made from starch. He also informed that numerous industries are being set up for these bags, which while resembling plastic, are actually made from starch and decompose automatically within 90 days. The Hon’ble Member emphasized that this category should be included in the proposal under examination. 5.29 The Hon’ble Chairperson suggested assigning a separate HSN code for the bio-friendly category of bags and urged the Hon’ble Member from Meghalaya to provide the necessary details. Decision: Fitment Committee recommended to maintain status quo on paper bags and recommended that for the prospective period the rate be reviewed by the Fitment Committee with inputs from the states of Maharashtra and Meghalaya. 5.30 Joint Secretary, TRU-I presented the agenda item regarding request to increase the GST rate on agro-shade nets from 5% to 12 %. She informed the Council that the matter of inverted duty structure on textiles was taken up in the 45th GST Council meeting, but in the 46th Council meeting the issue was deferred and recommended to the GoM on Rate Rationalization. She said that the Fitment Committee recommended maintaining status quo, as report of the GoM on Rate Rationalization is awaited. This had been agreed to in the Officer's meeting. Decision: The Council approved the recommendation of the Fitment Committee for maintaining status quo on the GST rate on agro-shade nets. 5.31 Joint Secretary, TRU-I presented the agenda item regarding clarification of applicable rate of GST on Compressed Bio-Gas (CBG). She informed that the issue of GST rate on biogas was deferred in the 37th GST Council meeting held in 2019. Further she informed that there is no separate entry for CBG and GST rate on biogas is 5%. So, the rate is the same for CBG and as on date there is no ambiguity regarding the rate. The taxpayers are already paying 5%, so it is a non- issue now. This was agreed to in the Officers' meeting. Decision: The Council approved the recommendation of the Fitment Committee that no clarification is required on the applicable rate of GST on compressed bio-gas (CBG). 5.32 The Joint Secretary, TRU-I presented the agenda item pertaining to reduction of rate of GST on feedstock like reformate, DHDT, VGO, etc. from 18% to 5%. She informed that this issue was also discussed in 47th GST Council meeting and the Council had felt that there is no significant revenue implication as far as OMC's are concerned and recommended not to accept the request for rate reduction. Fitment Committee also recommended maintaining status quo and it was agreed to in the Officers' meeting. Decision: The Council approved the recommendation of the Fitment Committee to maintain status quo with regard to rate of GST on feedstock like reformates, VGO, DHDT feed, SRGO etc. 5.33 Joint Secretary, TRU-I presented the agenda item pertaining to reduction in GST rate on cathode coating and separators of lithium-ion battery. She stated that since cathodes and separators are present in all batteries including Lead- acid, Nickel- cadmium, Nickel-Metal Hydride, etc. , Fitment Committee has recommended to maintain status quo as it would lead to an end use based exemption Decision: The Council approved the recommendation of the Fitment Committee to maintain status quo on GST rates for cathode coating and separators of lithium-ion battery. 5.34 Joint Secretary, TRU-I presented the agenda item pertaining to reduction in GST rates on parts used in manufacture of EVs from 18% or 28% to 5%. Fitment Committee had recommended to maintain status quo because this would have introduced inversion in the supply chain of such EV parts. She informed that Andhra Pradesh had made a request to reduce the GST rate to 5 % and that the proposal would be sent by Andhra Pradesh. This may be examined by Fitment Committee separately. 5.35 The Hon’ble Member from Andhra Pradesh informed that they reiterate the submission made by them. He stated that in line with the Hon’ble Prime Minister's stress on the Renewable energies, Andhra Pradesh is proposing an EV policy. The Hon’ble Member requested for reduction in the tax structure on EVs along with the charging stations and stated that they would be sending a detailed proposal to the Fitment Committee. The Hon’ble member from Andhra Pradesh requested the GST council to consider the whole proposal. Decision: In light of the request from Andhra Pradesh the Council recommended that the matter may be examined by Fitment Committee after receipt of detailed proposal from Andhra Pradesh. 5.36 JS, TRU-I presented the agenda item pertaining to request for reduction in GST rate on braided elastics from 12% to 5% on par with woven and knitted elastic. She stated that this was discussed in the Fitment Committee and Fitment Committee had recommended maintaining status quo as this will create further inversion in tax structure. Further she informed that this was agreed to in the Officers’ meeting and that Gujarat had requested to consider reducing the GST rate from 12% to 5%, whereby it was pointed out to him that this would result in refund of accumulated ITC. 5.37 The Hon’ble Member from Gujarat suggested bringing about parity and emphasized that this would support small-scale units and MSMEs. He further suggested that the rate of tax on braided elastic tapes needs to be brought down to 5 % from 12 %, as in the case of woven and knitted elastic tapes. He requested the Council to send this issue back to the Fitment Committee for the reconsideration of reduction in tax rate without refund of input tax credit accumulated on account of the inverted duty structure. 5.38 The Secretary explained that the braided elastic does not fall under the Chapter where woven and knitted elastic are classified. However, parity as sought by Gujarat would lead to duty inversion due to higher input tax. 5.39 Joint Secretary, TRU-I explained that woven elastic tapes are categorized under woven fabrics, where rate of tax is 5%. However, the braided elastic is classified in different chapter under ‘rubber thread having textile covering’ which can be used in textile items as well as in various items including sports goods. She further stated that if Council agrees, the request of Gujarat may be re- examined by the Fitment Committee. 5.40 The Hon’ble Member from U.P added that the braided elastics are made from rubber and that duty reduction is not recommended. 5.41 The Secretary stated that the rate as recommended by the Fitment Committee may be accepted as reflected in overall sense of the House. Decision: The Council approved the recommendation of the Fitment Committee to maintain status quo on the GST rate on braided elastic tapes. Agenda Item 4(c): JS, TRU-I then presented the agenda items pertaining to services as mentioned in Annexure-IV of the Agenda item no. 4 (total 20 issues, as per Volume-I and Volume III respectively). She presented the recommendations made by the Fitment Committee in this regard, either for changing the rate of GST or for clarifying the applicable rate of GST on the concerned services. 5.42 The first item presented for discussion in Annexure-IV of the Agenda item 4 of Volume-I was to clarify that GST @ 5% is applicable on helicopter services for pilgrims. JS, TRU-I informed that this issue has arisen as notices have been issued to helicopter service operators demanding 18% GST. She further informed that in the officer’s meeting, it was recommended that a separate entry be created for notifying rate of 5% on transport of passengers by helicopter on seat share basis. Therefore, as per the discussions in the Officers’ meeting, separate entry related to passenger transport by helicopter on seat share basis may be inserted in notification No. 11/2017-CTR. It was also recommended to clarify that services other than transport of passengers by helicopter on seat share basis i.e., for charter operations will continue to attract GST at 18%. Decision: The Council approved the recommendation of the Fitment Committee pertaining to notifying rate of 5% on transport of passengers by helicopter on seat share basis and clarifying that charter operations continue to attract GST at 18%. 5.43 The next agenda item presented by JS, TRU-I was ‘to clarify whether incidental/ ancillary services such as loading, unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency (GTA) service, being composite supply, or these services are to be treated as separate independent supplies’. She informed that the Fitment Committee had recommended to clarify that when ancillary/incidental services are provided by GTA in the course of transportation of goods by road and the GTA also issues consignment note, the service will constitute a composite supply and all such ancillary/incidental services like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc. will be treated as part of the composite supply. However, if such services are not provided in relation to transportation of goods and invoiced separately, then these services will not be treated as composite supply and will be treated as standalone services. Decision: The Council approved the recommendation of the Fitment Committee pertaining to clarifying whether incidental/ ancillary services such as loading, unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency (GTA) service, being composite supply, or these services are to be treated as separate independent supplies. 5.44 The next agenda item presented by JS, TRU-I was to clarify if Ro-Ro service (Truck on Train) is used for the transportation of milk, no GST is leviable on the empty tankers returning after delivery of milk. She stated that the Fitment Committee had recommended clarifying by way of letter to the concerned authority that the transport of empty tankers returning after delivery of milk is taxable and not exempt. Exemption on the said transport of empty tankers returning after delivery of milk was not recommended. Decision: The Council approved the recommendation of the Fitment Committee to not exempt GST on transport of empty tankers (Ro-Ro service: Truck on train) returning after delivery of milk. 5.45 JS, TRU-I presented the agenda item pertaining to either exempt electric vehicle (EV) charging services at public charging stations or to clarify that the activity of charging electric vehicles (EVs) in a charging station essentially involves supply of electricity and therefore should be chargeable at the same rate applicable to supply of electricity. JS, TRU-I informed that during the deliberations on the issue in the officer’s meeting held on 08.09.2024, on the request of the State of Andhra Pradesh it has been recommended to defer the matter for further re-examination by the Fitment Committee. Decision: The Council approved the recommendation to defer the agenda item for further re-examination. 5.46 JS, TRU-I presented the agenda item pertaining to issue of corrigendum to t h e Circular No. 34/8/2018- GST dated 01.03.2018 in respect of taxation of ancillary services of transmission and distribution of electricity such as: (i) application fees for providing electricity connection, (ii) rental charges against electricity meter, (iii) testing fees for meters/ transformers/capacitors, (iv) labour charges from customers for shifting of meters/service lines & (v) charges for duplicate bills etc. She stated that the Fitment Committee had recommended to partially modify the Circular No. 34/8/2018- GST dated 01.03.2018, clarifying that supply of above-mentioned services which are incidental, ancillary or integral to the supply of transmission and distribution of electricity by transmission and distribution utilities to their consumers, when provided as a composite supply are exempt. It was also informed by JS, TRU-I that the Fitment Committee has also suggested that the Special Leave Petition (SLP) pending in the Hon’ble Supreme Court on this issue may be withdrawn once the clarification is issued. 5.47 The Hon'b1e Member from Punjab stated that these services should not be treated as a composite supply and ancillary services such as rental charges against electricity meter etc. should instead be taxed as separate supply. The Hon'b1e Member also suggested that if the Council decides to proceed with the modification, it should apply only prospectively as applying it retrospectively will have revenue implications for the States. 5.48 The Hon'b1e Member from Andhra Pradesh, however, requested that the modification be applied retrospectively. 5.49 The Hon'b1e Member from Uttar Pradesh also supported a prospective application, citing potential complications otherwise. 5.50 The Hon'b1e Member from Andhra Pradesh noted that the matter is still under judicial consideration. The Hon’ble Chairperson inquired about Andhra Pradesh's position in court, to which the Hon’ble Member from Andhra Pradesh replied that they had not collected GST but some parties have contested that these services are not liable for GST. 5.51 The Hon’ble Chairperson summarised that the consensus was not to apply the modification retrospectively but to implement it prospectively, aligning with the suggestions from Hon'b1e Member from Punjab and Hon'b1e Member from Uttar Pradesh. She confirmed that the modification would not be applied retrospectively but implemented prospectively. The State of Andhra Pradesh's case would be addressed accordingly, as the decision aligns with their stated position. 5.52 The Secretary stated that the modification would be applied prospectively, with past collections regularized on an "as is where is" basis. 5.53 Member (Tax Policy), CBIC added that the implementation should be prospective and could be done by way of exemption. The past period can be regularised on ‘as is where is’ basis through clarification. Decision: The Council recommended to create a separate entry in exemption notification No. 12/2017-CTR dated 28.06.2017 for exempting supply of services by way of providing metering equipment on rent, testing for meters/ transformers/capacitors etc., releasing electricity connection, shifting of meters/service lines, issuing duplicate bills etc., which are incidental or ancillary to the supply of transmission and distribution of electricity by electricity transmission and distribution utilities to their consumers. The Council also recommended to regularize the past period on ‘as is where is’ basis. 5.54 JS, TRU-I presented the agenda item pertaining ‘to clarify the applicability of GST on the affiliation fee collected by universities from affiliated colleges’ in respect of which the Fitment Committee had recommended to clarify by way of circular that the affiliation services provided by universities to their colleges are not covered within the ambit of exemptions provided to educational institutions in the Notification No. 12/2017-CT(R) dated 28.06.2017 and GST at the rate of 18% is applicable on the affiliation services provided by the universities. Decision: The Council approved the recommendation of the Fitment Committee pertaining to clarifying the applicability of GST on the affiliation fee collected by universities from affiliated colleges. 5.55 JS, TRU-I presented the agenda item pertaining to clarifying the applicability of GST on the affiliation fees charged by Central and State Educational Boards/council in respect of which the Fitment Committee had recommended to regularize the collection of GST on affiliation fee charged by State/Central educational boards to schools on ‘as is where is’ basis for the period from 01.07.2017 to 17.06.2021 i.e., the date of issuance of Circular no. 151/07/2021 clarifying that accreditation services of boards are taxable at the rate of 18% and to exempt affiliation services provided by State/Central educational boards to Government schools prospectively. In the Officers’ meeting it was also recommended that exemption may be extended to educational councils and similar bodies in the States. Decision: The Council approved the recommendation of the Fitment Committee to regularize the collection of GST on affiliation fee charged by State/Central educational boards/councils and other similar boards to schools on ‘as is where is’ basis for the period from 01.07.2017 to 17.06.2021 and to exempt affiliation services provided by State/Central educational boards/councils and other similar boards to Government schools prospectively. 5.56 JS, TRU-I presented the agenda item pertaining ‘to clarify the applicability of GST on approved flying training courses conducted by Flying Training Organizations (FTOs) approved by DGCA’. She stated that Fitment Committee had recommended to clarify by way of a circular that approved flying training courses conducted by DGCA approved Flying Training Organizations (FTO) are exempt from GST. 5.57 The Hon'b1e Member from Punjab suggested that flying training courses other than those given to first time students should not be exempted and proposed that an age criterion may be introduced to determine eligibility for such exemptions. 5.58 The Secretary then requested the State of Punjab to send a proposal in this regard. He noted that these services are generally for reskilling purposes, often involving defense personnel who have retired at a young age, which should be considered during deliberations. 5.59 The Hon'ble Member from Chhattisgarh expressed the view that GST should be exempted for everyone, given the importance of aviation being a growing sector requiring higher degree of skills. 5.60 The Secretary requested the state of Chhattisgarh to submit its proposal separately. He further clarified that the Fitment Committee had only examined the exemptions as per the notifications issued and assessed whether these courses are covered by the existing exemption. He also asked other states to give other proposals, if any, to the Fitment Committee, which would then review and present them before the Council for further deliberation. 5.61 The Hon'ble Member from Karnataka raised the point that while training programs are classified under education, such broad classification leads to non- core education being grouped with educational services, thus extending favorable treatment beyond its intended scope. He stated that Karnataka supported the exemption for certain educational services but suggested a thorough examination to distinguish between core and non-core education, so that some of the activities which are not core education may be treated differently. Decision: The Council approved the recommendation of the Fitment Committee to clarify by way of a circular that approved flying training courses conducted by Flying Training Organisations (FTOs) approved by DGCA are exempt from GST. 5.62 JS, TRU-I presented the agenda item pertaining to replace ‘National Council for Vocational Training’ (NCVT) with ‘National Council for Vocational Education and Training’ (NCVET) in the Notification No. 12/2017-CT(R) dated 28.06.2017 and include the services provided by the recognized Awarding Bodies, Assessment Agencies, Training Bodies and Skill Related Information Providers approved by NCVET in the exempted list’. She stated that this agenda is more of a technical nature as NCVET has taken the place of NCVT. The Fitment Committee had recommended that amendments are required in Sl. Nos. 69, 71 and para 2(h) of Notification No. 12/2017-CT(R) dated 28.06.2017 to align the said entries with the revised vocational education and training framework set up under the NCVET and exemption to NSDC in its present form may be continued. The proposal of MSDE in relation to exempting activities of Skill Related Information Providers (SRIPs) may not be accepted since no such exemption exists currently. Decision: The Council approved the recommendation of the Fitment Committee for amending Sl. Nos. 69, 71 and para 2(h) of Notification No. 12/2017-CT(R) dated 28.06.2017 to align the said entries with the revised vocational education and training framework set up under the NCVET and continuation of exemption to NSDC in its present form. 5.63 JS, TRU-I presented the agenda item pertaining to clarifying for the period prior to 01.10.2021, the GST rate applicable on the services provided by the film distributor or sub-distributor to exhibitions for distributing films for exhibitions is @ 12%. 5.64 She informed the Council that representations have been received to clarify regarding the GST liability for the period from 01.07.2017 to 01.10.2021 on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers. Field formations have viewed that such transaction is classifiable under SAC 9996 and attracts GST at the rate of 18%. 5.65 Prior to 1st October 2021, GST at the rate of 18% was leviable on “Motion Picture, videotape and television programme distribution services” under Heading 9996 whereas 12% rate of GST was leviable on “temporary or permanent transfer or permitting the use or enjoyment of intellectual property right in respect of goods other than IT technology software” under Heading 9973. It was observed that both entries apparently covered services by way of licensing of rights to broadcast or show films. This issue was discussed in the 45th GST Council meeting held on 17.09.2021 wherein, the Council recommended to keep a uniform rate of 18% on both these entries with effect from 01.10.2021. 5.66 She informed that the Fitment Committee had examined the issue and recommended regularizing payment of GST on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers on ‘as is where is’ basis from 01.07.2017 to 30.09.2021. Decision: The Council approved the recommendation of the Fitment Committee to regularize the payment of GST on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers on ‘as is where is’ basis from 01.07.2017 to 30.09.2021. 5.67 JS, TRU-I presented the agenda item pertaining to clarifying the taxability on Preferential Location Charges (PLC) collected along with consideration for sale/ transfer of constructed/ under-constructed residential/commercial/industrial properties. Allowing choice of location of apartment is integral part of supply of construction services and therefore, location charge is nothing but part of consideration charged for supply of construction services before issuance of completion certificate. Being charged along with supply of construction services for the apartment, the same attract GST at same rate as of construction services before issuance of completion certificate. 5.68 The Hon'ble Member from Punjab suggested that Preferential Location Charges should be taxed as separate services and should not be treated as part of a composite supply where construction services are the main service. 5.69 The Hon'ble Member from Chhattisgarh stated that taxing PLC separately would further complicate matters. 5.70 The Hon'ble Member from Uttar Pradesh supported the Fitment Committee's recommendation. 5.71 The Secretary acknowledged the complexity of the issue, noting that if PLC is not considered part of a composite supply with construction services, it could raise confusion about GST chargeability itself. He informed that the Fitment Committee has examined the issue and is of the view that since PLC charges are naturally bundled with the construction services, therefore are eligible for same tax treatment as the main supply i.e., the construction service. He stated that there was consensus and urged the Council Members, including Punjab, to support the Fitment Committee's recommendation to treat PLC as part of the composite supply to avoid potential legal challenges. Decision: The Council approved the recommendation of the Fitment Committee to clarify that Location charges or Preferential Location Charges (PLC) paid along with the consideration for the construction services of residential/commercial/industrial complex before issuance of completion certificate forms part of composite supply where supply of construction services is the main service and PLC is naturally bundled with it and are eligible for same tax treatment as the main supply i.e., construction service. 5.72 JS, TRU-II presented the agenda item about ascertaining the value of land for arriving the value of construction services in case of sale of commercial / residential apartments. He stated that Fitment Committee had recommended to draft Valuation Rules to ascertain the value of land for deciding the value of construction services in sale of commercial/residential apartments to be based on the notified circle rates wherever available or where the circle rates are not available, then the value of land may be deemed. 5.73 The Secretary explained that GST is charged on construction services, but when a flat is sold, the charges for construction services are typically not shown separately rather the price include both land and construction costs. Currently, a deeming provision treats one-third of the cost of such flat/apartment as the land value. However, this does not account for variations in land value, particularly in posh or expensive areas, where land value can exceed one-third of the total value, sometimes reaching two-thirds or even up to 75%. This discrepancy has led to legal challenges, and the Hon’ble Gujarat High Court has struck down this valuation rule, necessitating a review of valuation rules in this regard. 5.74 The Hon’ble Member from Goa suggested that the issue is covered under the Terms of Reference (ToR) of the Group of Ministers (GoM) on the Real Estate Sector, which had recently conducted a meeting and next meeting is scheduled soon. Given the different circle rates in each state, he recommended that the issue be discussed further within the GoM for a more focused and appropriate resolution. 5.75 The Secretary acknowledged the suggestion and also noted that the issue has been pending for a long time and was brought to the Council after extensive examination by the Fitment Committee, but if Council agrees, it may be examined by the GoM. Decision: The Council agreed that the matter may be referred to the existing GoM on boosting the Real Estate Sector. 5.76 The JS, TRU-I presented the agenda item pertaining ‘to levy GST on renting of commercial property by unregistered person to registered person on Reverse Charge Mechanism (RCM) basis’. She informed that Fitment Committee had recommended to bring renting of commercial property by unregistered person to registered person under RCM. Decision: The Council approved the recommendation of the Fitment Committee to bring renting of commercial property by unregistered person to registered person under RCM. 5.77 JS, TRU-I presented the agenda item pertaining to clarifying the applicability of GST on sale of participating interest in case of farm-in farm out contracts in oil and gas exploration sector. She informed the Council that the issue was deliberated in the Officers meeting held on 09.09.2024 and it has been recommended to re-examine the matter in light of fresh representation received from the Ministry of Petroleum and Natural Gas. 5.78 The Hon’ble Member from Assam stated that their economy is heavily reliant on oil and natural gas. Given that the Fitment Committee had already clarified the taxability of farm-in and farm-out transactions, she suggested maintaining the position that these transactions should be subject to 18% GST. 5.79 The Revenue Secretary responded that when the Fitment Committee re- examines the issue, they will consider whether these transactions should be exempt or not, and will take Assam's views into account during their deliberations. Decision: The Council agreed to defer the issue for further examinations by the Fitment Committee. 5.80 JS, TRU-I presented the agenda item pertaining to clarifying whether exemption under entry at Sr. No. 34 of notification No. 12/2017-CTR dated 28.06.2017 is available to payment aggregators for transactions transacted through credit card, debit card, charge card or other payment cards over digital networks up to Rs. 2000/-. She stated that Fitment Committee had recommended to clarify that the services provided by payment aggregators in relation to the transaction transacted through credit card, debit card, charge card or other payment cards over digital networks up to Rs. 2000/- are not eligible for exemption under entry at Sl. No. 34 of the notification No.12/2017-CTR dated 28.06.2017 and are taxable. 5.81 The Hon’ble Member from Delhi expressed the view that the exemption for digital payments up to Rs. 2000/- should also apply to payment gateways and payment aggregators. It was argued that many small businesses and startups operate almost exclusively online, using these payment gateways or payment aggregators. Imposing GST on payment gateways/payment aggregators would ultimately impact these businesses, which could be detrimental for these small businesses and startups. 5.82 The Hon’ble Member from Punjab supported the views of the Hon’ble Member from Delhi. 5.83 The Secretary then clarified that the Fitment Committee was tasked with providing clarification about the eligibility of the existing exemption to such payment aggregators, not to consider a new exemption. It was also noted that some payment aggregators, like PayTM, Google Pay and Amazon Pay, have already paid GST, making it difficult to justify exempting those who have not. 5.84 The Hon’ble Member from Delhi then stated that while large enterprises like Amazon have their own payment gateways, smaller businesses rely on these third-party payment gateways/aggregators for online transactions. Taxing transactions under Rs. 2000/- on these aggregators would contradict the broader goal of promoting digital and cashless transactions. The Hon’ble Member from Delhi suggested that the matter should be reconsidered by the Fitment Committee, a GOM, or concerned policy wing, to ensure that the exemption applies to these payment aggregators as well. 5.85 The Hon’ble Member from Karnataka acknowledged the concerns but stated that the current regime should continue as it provides visibility into online transactions of goods and services. He stated that it brings some visibility into what is happening in such online transaction of goods and services. He opined that if we exempt it, that visibility and trail will be lost. He stated that he is not averse to encouraging digital payments and he welcomes it, if there is a way in which it can be done. He stressed the importance of maintaining this visibility and suggested that any examination of the exemption should consider both revenue implications and the value of visibility in these transactions. 5.86 The Hon’ble Member from Delhi then stated that the key issue is the disparity in treatment between card transactions, which are exempt, and those made through payment aggregators, which are not. This disparity affects small businesses and start-ups the most. The Hon’ble Member from Delhi suggested that either no transactions under Rs. 2000/- should be exempt, or the exemption should also apply to these payment aggregators as well, to maintain parity. 5.87 The Hon’ble Member from Uttar Pradesh supported Karnataka's view, emphasizing the significant revenue implications and volume of transactions involved and said that it should be examined broadly. 5.88 The Hon’ble Member from Meghalaya concurred with Karnataka’s views, noting that introducing the exemption would further complicate the situation. The Hon’ble Member emphasized the importance of maintaining the trail of information, as highlighted by Karnataka, considering it a valid point. Additionally, the Hon’ble Member acknowledged the significant revenue implications as mentioned by Karnataka. Therefore, the Hon’ble Member aligned with the opinions and suggestions of Karnataka and UP, concluding that the exemption in this category should not be pursued. 5.89 The Hon’ble Member from Gujarat and West Bengal also agreed with Karnataka’s stance, stressing the importance of considering revenue collections. 5.90 The Hon’ble Member from Karnataka acknowledged concerns raised by Delhi regarding parity and emphasised need for parity between different modes of a same activity. He suggested that the Council Secretariat should examine how parity could be established without losing the current benefits of visibility and transparency. 5.91 The Secretary concluded by noting that there is a request to examine the need for parity, keeping in mind the importance of data visibility and revenue considerations. Decision: The Council approved the recommendation that the Fitment Committee shall reexamine the matter considering all the factors discussed. 5.92 JS, TRU-I presented the agenda item pertaining to clarifying whether concession amount paid to NHAI by concessionaire for grant of rights under Toll Operate and Transfer Model (TOT) is liable to GST or not, as toll is exempt under Notification- 12/2017 - Central Tax (Rate) dated 28.06.2017. She informed that Fitment Committee had recommended to clarify that the concession amount paid to NHAI by concessionaire is taxable and not covered under entry at Sl. No. 23 of Notification No. 12/2017-CT(R). However, the matter was being deferred for re- examination after discussions in the officers’ meeting on 08.09.2024. 5.93 The Hon’ble Member from Uttar Pradesh said that present system should continue. 5.94 The Hon’ble Member from Karnataka stated that they somewhat agree with the Hon’ble Member from Uttar Pradesh, particularly in principle. They expressed concern about selectively granting exemptions to specific agencies, which might not be the most appropriate approach. Karnataka emphasized that the discussion isn't about taxing tolls themselves, as those have already been exempted. Instead, the focus is on taxing the service provided by the toll operator. The Hon’ble Member drew a parallel with the earlier discussion on electricity, where the supply of electricity is exempt, but services like EV charging are taxable. Similarly, in this case, Hon’ble Member stated that it's not the toll itself that is to be taxed, but the business service provided by the toll operator. He maintained that, as a matter of principle, the toll should remain untaxed, while the service aspect (regarding concession amount) provided by the toll operator should be taxable. 5.95 The Additional Secretary, DoR highlighted that there are two types of concession agreements: one for new roads and another for maintaining and collecting tolls for existing roads. The issue arose when enforcement actions began, and GST was imposed on these services. Fitment Committee discussed the issue, and concluded that while tolls are exempt, GST is applicable to such services. He highlighted the problem that if GST is imposed, the funds collected from tolls, which are passed on to NHAI, would be taxed, disrupting the entire system and the development model. This would negatively impact not only NHAI but also State Governments, many of which have established road development corporations responsible for building and maintaining toll roads. If the proposed clarification is issued, enforcement actions will become final, requiring NHAI and State Governments to pay taxes. This could undermine the asset monetization efforts and the promotion of PPP projects. Additional Secretary stated that in the Officers’ Meeting, it was decided to defer the issue and re-examine it. If, after re- examination, it is determined that there is still a technical reason for imposing GST, the possibility of granting an exemption should be considered. 5.96 The Secretary clarified that the issue under discussion is not about a separate service but an input service crucial to the toll or maintenance service, specifically the right to use the road. He explained that the toll, paid by consumers, whether passengers or vehicles, is the output service provided by the toll operator. However, to offer this service, the toll operator first needs to acquire the right to use the road from agencies like NHAI or state road development corporations. This acquisition of rights constitutes an input service to the toll operator's output service. He emphasized that while the Council has already exempted the output service (toll collection), the critical input service, which enables the toll operator to provide the output service, has not been exempted. He drew parallels to previous Council decisions, such as the exemption of reinsurance for government insurance schemes, where the input (reinsurance) was also exempted to maintain the intended benefits of the output exemption. To illustrate further, he mentioned similar cases involving exemptions on petroleum, electricity, and alcohol, where the input services or goods were also exempted to avoid indirectly taxing the output, which was supposed to be exempt. He concluded by stating that this proposed exemption should not be seen as specific to NHAI but applicable to all similar road projects and toll collections, regardless of the agency involved. He suggested that the Fitment Committee should thoroughly re-examine whether this exemption should be granted and consider its implications, including what would happen regarding taxes already collected in the past. Uttar Pradesh and other States, after this clarification, agreed to the suggestion for the re-examination by the Fitment Committee. Decision: The Council approved the recommendation to defer the issue for re-examination by the Fitment Committee. 5.97 JS, TRU-II presented the agenda item pertaining to applicability of GST on Research grants or donations received from Government or private agencies. He stated that the Fitment Committee had recommended to grant exemption to the following service under heading 9981- Supply of research and development services by- (a) a Government Entity; or (b) a research association, university, college or other institution, notified under clauses (ii) or (iii) of sub-section (1) of section 35 of the Income Tax Act, 1961 to Central Government, State Government, Union territory, local authority or Government Entity against consideration received from them in the form of grants. 5.98 The Hon’ble Member from Delhi sought clarification regarding applicability of GST on grants received by educational institutions from private agencies. 5.99 The Secretary clarified that even when there is a quid pro quo i.e. where research is conducted on behalf of the government with something given in return, such as IPR or new technology the grants would be exempt. He also mentioned that in the Officers' meeting, it was deliberated that in pure research, where there is nothing in return as such any rights or IPR etc and the research conducted is purely for public good, such pure research should not be taxable. It was recommended that this issue be further examined, and if necessary, a circular should be issued to clarify that grants for pure research as discussed above should not be subject to tax. 5.100 The Hon’ble Member from Delhi again sought clarification regarding the first part- whether the presence of a quid pro quo would render the transaction taxable or not. 5.101 The Secretary clarified that if there is a quid pro quo in case of a private entity, the transaction is taxed. He explained that many institutions, both in the private and public sectors, might conduct research for companies that could lead to improvements in technology, for eg. company enhancing the functionality or capacity of its car engine. In such cases, the company may provide a grant or fee in return for the intellectual property rights (IPR) or copyrights to use the technology for commercial purposes. Similarly, an agricultural company might provide a grant to develop a better seed, which would also be taxable because it involves a service provided in return. Whereas if a research grant is given for purely philanthropic purposes, such as developing a medicine with no intention of commercial exploitation, it should not be taxed. He pointed out that the global practice generally exempts research for the public good. In the Officers' meeting it was decided to deliberate on how to address these issues, particularly the issue of distinguishing research for public benefit from research for commercial exploitation. 5.102 The Hon’ble Member from Assam supported the exemption, noting that making research taxable under GST would significantly increase costs, potentially discouraging research and development in areas such as education and agriculture. It was also stated that exempting research under GST, consistent with provisions in the Income Tax Act, would encourage scientific research and development. It was further emphasized that exempting research from GST would send a positive message to society, about the Government's commitment to education, research and the development of scientific temper whereas if research were made taxable under GST, it would become expensive and potentially discourage research and development scenario in India. 5.103 The Hon’ble Member from Meghalaya stated that the decision on taxability should fundamentally depend on the end use of the research. They suggested that where everyone is allowed to use the outcome of research, it should be non- taxable. However, if the research results in a patent held by an entity that controls its use, this should be treated differently. He proposed that research for public use is perhaps the only justifiable way to grant a tax exemption. They also expressed concern that organizations might misuse this exemption by creating proxy entities to fund and benefit from research through indirect channels. Hence, it is crucial to ensure transparency and openness in research to truly benefit the larger public. The Committee should thoroughly examine these aspects and make decisions that would foster positive research development for the greater good of the country. 5.104 The Hon’ble Member from Delhi expressed some confusion regarding the decision on whether the exemption applies to research grants or if further examination is needed. 5.105 The Secretary clarified that the Fitment Committee would review the need for any orders, circulars or notifications concerning the taxability of research conducted for public good. The Committee will specifically exclude cases involving commercial exploitation of research from the exemption. 5.106 The Hon’ble Member from Uttar Pradesh supported the Fitment Committee's recommendations. 5.107 The Hon’ble Chairperson then summarised the key points of the discussion. First, the grants given by the Government-to-Government entities or the institutions notified under section 35 of the Income Tax Act, 1961 are exempt from GST. This exemption applies whether the research is for pure public good or otherwise. Second, pure research conducted for the larger public good, if funded by the Government, is exempt from GST. The Fitment Committee may be asked to look into certain aspects and provide clarity. The Hon’ble Chairperson emphasized that clarity is needed on how private funding in such cases should be treated. When these grants lead to commercial exploitation by the private entities, the Fitment Committee shall examine the appropriate tax treatment. 5.108 The Hon’ble Member from Delhi stated that a clarification is required if such grant is received from a private entity for purely philanthropic purposes. 5.109 The Hon’ble Chairperson asserted that research, whether it involves government-to-government, government-to-private, or private funding, should be treated favourably. She acknowledged that sometime State and Central GST authorities issue notices to verify the nature of research funding to ensure compliance with the law. These notices are not intended to harass but to verify the compliance. She noted that recent notices were issued to seven institutions, including both Government and private entities, to investigate whether the funding was compliant with existing regulations. 5.110 The Hon’ble Chairperson proposed that research funding, whether from government or private sources, should be treated favourably. She suggested that the Fitment Committee should examine how to tax or otherwise private funding for research intended for the public good, ensuring that it is treated in a manner that supports research and development. 5.111 The Hon’ble Member from Mizoram highlighted that when universities receive research funding from companies, it is often categorized as a consultancy fee. According to the UGC working committee, 2019 on university-industry engagements, a portion, typically 10 to 50 percent of this consultancy fee, is allocated to the university. He urged the council to consider this aspect when the Fitment Committee reviews the matter, pointing out the challenges faced in academic research. He noted that research often follows its own hypothesis, making it difficult to predict outcomes such as patents, which can take many years to materialize. This delay poses a challenge for paying GST, as the grantor might have already disbursed the funds, and the patent could be granted years later. He expressed satisfaction that the Council is moving towards a conclusion where GST may not be applicable. 5.112 The Hon’ble Member from Bihar and Meghalaya both expressed that if private entity funds research aimed at the larger public good, such funding should also be exempt from taxation. The Hon’ble Member from Meghalaya further suggested that the research institution should provide an undertaking affirming that the outcome of the research, whether it be a study, patent, or any other result, will be made public and will not be kept hidden. This undertaking would ensure transparency. By committing to make the research and its outcomes publicly accessible from the outset, the process would align with the larger public interest and, therefore, should be exempt from taxation. 5.113 The Hon’ble Member from Uttar Pradesh stated that research should be encouraged at every level, as innovation in any field often stems from dedicated research efforts. However, if the outcomes of this research can be used commercially, then it is advisable that revenue interests of the States should be safeguarded. The Fitment Committee shall examine it further diligently. 5.114 The Hon’ble Member from Kerala stated that, if the funding is directed towards product development or patent creation, that needs to be carefully examined by the Fitment Committee. He emphasized the importance of promoting research funding from both private and public sectors. While public sector funding is already established, there is a significant need for private sector contributions to research. Generally, most aspects of research funding can be accepted without imposing a tax burden, but special considerations should be made for cases involving product or patent development. 5.115 The Hon’ble Member from Nagaland remarked that the discussions have largely focused on the public good, and it is understood that Delhi has repeatedly made interventions, likely due to specific instances of irregularities. These irregularities seem to be the reason that private philanthropist donors, are being scrutinized more critically compared to others i.e. Central and State grants. The Hon’ble Member suggested that it would be appropriate to clarify why the private grants are being treated differently and the specific apprehensions surrounding them. 5.116 The Hon’ble Member from Uttarakhand supported Meghalaya's suggestion that research institutions should provide an undertaking affirming that the outcomes of their research, whether it be a study, patent, or any other, will be made public. Additionally, he proposed that if the undertaking is not complied with, GST should be levied. 5.117 The Hon’ble Member from Telangana emphasized the importance of research for the country and suggested that funding from the Government, whether from the Centre or the State, to institutions should be exempted from taxation. If the research serves a public purpose, even if it involves quid pro quo, it should still be exempted since the funds are coming from the Government. He proposed that private institutions funding research for the public purpose should also be exempted from taxation. However, if the research is conducted solely for the benefit of the private institution, such as for patents or other proprietary purposes, it should be taxed. He recommended that only the scenario where private funding is for the institution's own benefit should be referred to the Fitment Committee for further consideration. 5.118 The Hon’ble Member from Chhattisgarh emphasized the importance of creating a favourable environment for research and development (R&D). He suggested that while research funding for the larger public good should certainly be exempted, R&D for commercial purposes should also be promoted to enhance the competitiveness of private companies. Therefore, he opined that exemptions should be extended even to commercially-oriented R&D activities. 5.119 The Hon’ble Member from Arunachal Pradesh emphasized that research inherently involves development (R&D) and innovation. They highlighted that the purpose of research, whether it is for public or commercial purposes, whether funded by Government or private entities, is ultimately for development and innovation. Therefore, Arunachal Pradesh strongly advocated that all research activities, regardless of their source of funding or end use, should be granted exemption to promote overall development and innovation. 5.120 The Hon’ble Chairperson proposed to the Members that exemption to research which is proposed for Government entities and institutions with income tax exemptions, against government grants should also extend to private grants for research. The suggestion was to exempt all research funding, to govt. entities or institutions notified under Income Tax Act whether it is for public good or involves a quid pro quo. She emphasized that any research with a commercial outcome, such as a patent or a copyrighted product, would eventually be taxed when it enters the market. Therefore, she stated that taxing research at its initial stage should be avoided. She urged to consider exempting private funding for research to govt. entities or such institutions. 5.121 The Hon’ble Member from West Bengal was in agreement with the Hon’ble Chairperson, emphasizing that the proposal effectively addresses the need to encourage research for the benefit of society. She concurred that taxing research at a later stage, rather than at its inception, is the appropriate approach. 5.122 The Hon’ble Member from Nagaland also expressed his agreement to the proposal of the Hon’ble Chairperson, suggesting that the private funding should not be treated differently when the intention is the same as Government funding. They supported the Hon’ble Chairperson’s view that all research should be treated equally. 5.123 The Hon’ble Member from Delhi appreciated the Hon’ble Chairperson's views, agreeing that all type of research, against Govt. or private grant should be exempted from taxation. She also mentioned that considering the challenges Governments face in funding research, private sector contributions should be acknowledged and encouraged. 5.124 The Hon’ble Members from Sikkim, Gujarat, Chhattisgarh, Punjab, Andhra Pradesh, Madhya Pradesh and Goa also expressed their support for the Hon’ble Chairperson's views. The Hon’ble Member from Goa added that private companies sponsoring research to such private institutions should also be considered for exemption 5.125 The Secretary acknowledged the overarching unanimity on exempting all research funding to Govt. entities and other notified institutions 5.126 The Hon’ble Chairperson indicated that the law should be simple and straightforward, reflecting the Council's unanimous decision to support research, by exempting all forms of research funding from taxation. She also suggested that a simple definition of Research may be provided by the Fitment Committee to distinguish it from consulting. Decision: The Council recommended that all kinds of research funding made by Government and Private entities to Government, Government entities and institutions covered by section 35 of Income Tax Act 1961 may be exempted. A draft circular/notification detailing this exemption will be circulated by TRU among all the States. The Council further recommended that the Fitment Committee may examine to clarify definition of research to distinguish research from consultancy activities. 5.127 JS, TRU-II presented the agenda item pertaining to clarifying that GST is not applicable under reverse charge on the India branch office for expenses incurred by Foreign Airlines Head office or any other relief mechanism or amendment effective from 01.07.2017 that meets the request. She stated that the issue had arisen from a technical definition where the import of service, even when undertaken without consideration, is deemed taxable. After examining this issue and consulting with the Ministry of Civil Aviation (MOCA), Fitment Committee had recommended to exempt import of services by an establishment of a Foreign Airlines company from a related person or any of its establishment outside India, when made without consideration and to regularize the past period on ‘as is where is’ basis. Decision: The Council approved the recommendation of the Fitment Committee to exempt import of services by an establishment of a Foreign Airlines company from a related person or any of its establishment outside India, when made without consideration and to regularize the past period on ‘as is where is’ basis. 5.128 JS, TRU-II then presented the agenda item pertaining to reducing the GST paid by individuals on health insurance premiums from 18% to 5% or to exempt GST on Health Insurance premiums. He stated that the issue was also deliberated upon in the Officers’ meeting and following options were discussed: i.Exempting all individual health insurance premiums; ii.Exempting individual health insurance premiums which are paid by senior citizens and individual health insurance premiums where the coverage is up to Rs. 5 lakhs (irrespective of age); iii.Exempting only those individual health insurance premiums which are paid by senior citizens; or iv.Reducing the rate of GST on all individual health insurance services to 5% without ITC. 5.129 The Hon’ble Member from Maharashtra expressed support for reducing the GST on health insurance premiums from 18% to 5%. She was in favour of the fourth option i.e. to reduce the GST rate on all individual health insurance services to 5%, without allowing input tax credit (ITC). She emphasized that they lack data on senior citizens for the other two options and requested to approve the same. 5.130 The Hon’ble Member from Chhattisgarh highlighted the low penetration of private health insurance, noting that only 5 crore people have private insurance, while 60 crore are covered under the Government’s Ayushman Bharat scheme. Whereas 75 crore individuals are still uninsured. They emphasized that the premium is essentially an advance payment for health services (which are exempt), and questioned the rationale for taxing this. He advocated for reducing GST to 5% with ITC, as without ITC it will complicate the issue and affect the benefit to the middle class. The suggestion was made to simplify the tax structure rather than creating more categories. 5.131 The Hon’ble Member from Bihar welcomed the 5% reduction proposal but stressed the need to ensure that the full benefits reach the consumers. He stated that this step must directly benefit the common people and conveyed strong support for the measure. 5.132 The Hon’ble Member from Uttar Pradesh also supported the proposal for reduction to GST@5% for all individuals and suggested that senior citizens should be fully exempt from GST on health insurance. He reiterated that it must be ensured that benefits of the reduction are passed on to consumers. 5.133 The Hon’ble Member from West Bengal advocated for a total exemption of GST on health insurance premiums. She stated that the benefit of this should go directly to the individuals, citing a NITI Aayog report that over 30% of the population remain outside the healthcare system. To ensure affordability and accessibility for the public at large, she proposed that a complete exemption on health insurance premiums is necessary. She raised concerns about proposal to exempt senior citizens may create unnecessary complications, particularly for family health insurance schemes, where differentiating between senior and non- senior citizens would be difficult. She underscored the importance of health as a Constitutional right and urged the Council to ensure that this right is effectively exercised by all citizens. She suggested to consider supporting a total exemption of GST on health insurance, as it is essential for public health. 5.134 The Hon’ble Member from Telangana supported for reducing GST on health insurance premiums from 18% to 5%. He highlighted the financial burden on the lower middle class and middle class, who often struggle to access healthcare due to high medical costs. Health insurance plays a vital role in protecting the common man from these expenses. By lowering the GST rate on premiums, more people would be encouraged to purchase health insurance, which would ultimately improve the overall health and productivity of society. He also proposed a full exemption for senior citizens, emphasizing the Government's responsibility to make health insurance affordable for all. 5.135 The Hon’ble Member from Meghalaya also supported the reduction of GST on health insurance premiums to 5%, emphasizing that it will increase the coverage. He then highlighted the long-term impact of shifting from a treatment- based health sector to an insurance-driven one, where preventive medicine becomes a priority. He stated that an insurance-driven mindset could lead to a greater focus on prevention, benefiting both insurance companies and individuals. While acknowledging the technical challenges of fully exempting health insurance from GST, he suggested to start with a GST @ 5% and monitoring its effects. If positive outcomes are observed, the Council could then consider for further exemption in the sector. He reiterated support for reducing the GST rate and expressed openness to further discussions on full exemption. 5.136 The Hon’ble Member from Goa advocated for a 100% exemption from GST for health insurance, arguing that even reducing it to 5% might not address affordability concerns for many people. He opined that differentiating between senior citizens and others would be difficult, and offering a full exemption would make health insurance more accessible to the wider population. He also raised concerns about whether the benefits of health insurance truly reach the insured individuals and suggested the need for better monitoring. 5.137 The Hon’ble Member from Madhya Pradesh supported the fourth option, which proposes reducing GST on health insurance premiums to 5% without allowing input tax credit (ITC). He suggested careful monitoring to ensure that the benefits of the reduction are passed on to consumers. 5.138 The Hon’ble Member from Kerala highlighted the importance of providing benefits to as many people as possible and supported reducing GST @ 5%. He suggested a differential approach for those who can afford higher premiums but supported the fourth option for the policies with the coverage up to ₹5 lakh. He stressed that the middle class and poorer sections of society should benefit the most from this reduction. 5.139 The Hon’ble Member from Andhra Pradesh also supported the fourth option, emphasizing that reducing GST from 18% to 5% without ITC would have a lesser revenue impact while benefiting the common people. 5.140 The representative from Tamil Nadu supported the fourth option of reducing GST on health insurance premiums to 5% without input tax credit (ITC) and emphasized the importance of ensuring that the policyholder shall be benefited from the reduced rate. He also suggested facilitation by the regulatory bodies like the Insurance Regulatory and Development Authority of India (IRDAI) and the Department of Financial Services to ensure that this benefit is passed on to consumers. 5.141 The Hon’ble Member from Sikkim expressed support for a total exemption of GST on health insurance premiums, highlighting the significance of health for a prosperous India. He stated that ensuring everyone’s health is essential for the nation’s wealth. 5.142 The Hon’ble Member from Punjab proposed reducing GST on health insurance from 18% to 5% without ITC, but also advocated for a full exemption for senior citizens, stressing that such a move would greatly benefit their health. 5.143 The Secretary highlighted those numerous options, including additional ones with variation of the fourth option, were presented. He acknowledged significant support for the fourth option but stated that even within that, sub- options and technical considerations has emerged. He mentioned the Fitment Committee to deliberate on the nuances, such as how group policies, floater policies, or reinsurance should be handled. He further recommended further deliberation to avoid sending a fragmented or unclear message. He suggested that the Fitment Committee or a Group of Ministers (GoM) take these inputs into account for definitive proposal in the next council meeting. 5.144 The Hon’ble Chairperson addressed the Council regarding the various views presented on reducing or exempting GST for health insurance, particularly for senior citizens. She acknowledged the wide variety of inputs received, including special considerations for certain groups like senior citizens and specific insurance categories such as group insurance, family insurance, individual policies or term insurance, etc. She proposed that a dedicated Group of Ministers (GoM) should be constituted to examine the matter thoroughly and provide recommendations. She suggested that this GoM would have a strict timeline to finalize its report so that the GST Council can take up the issue in its November meeting. This timeline would allow the GoM to deliberate on the different scenarios and options presented, ensuring that the recommendations align with the overall sense of the Council, which clearly favours reduction or exemption in certain cases. She invited any ministers interested in being part of this GoM to join and stressed the importance of adhering to the proposed schedule so that the report is ready by the end of October, allowing the Council sufficient time to review it before making a final decision in November. This approach would ensure a comprehensive solution that addresses all concerns raised while adhering to the Council’s general direction. 5.145 The Secretary proposed that the existing GoM for rate rationalization may be tasked with examining GST on medical and health insurance, with the inclusion of additional members from the States like Andhra Pradesh, Telangana, Goa, Gujarat, Punjab, Meghalaya, and Tamil Nadu. The GoM would have terms of reference to suggest a way forward for all types of health insurance, including group, individual, family, and reinsurance for medical purposes. The report would be submitted by the end of October. 5.146 JS, TRU-II then presented the agenda item pertaining to reduction of GST on premium paid by individuals for the term/pure protection insurance plans from 18% to 5% or to exempt GST on life insurance premiums. The Secretary suggested that, to save time, the same GoM (that is being tasked with examining GST on medical and health insurance) could also review GST rates for term life insurance, ensuring a consolidated view on both medical and term life insurance policies. This proposal was made unless members specifically wanted to express their views on term insurance separately. 5.147 The Hon’ble Member from Andhra Pradesh pointed out that there was another agenda item concerning Health Insurance premium for persons with Mental Illness (PMI) (S.No.6 (Annexure V, Volume I)) 5.148 The Secretary agreed, suggesting that this issue also be included in the terms of reference for the GoM, thus creating a more comprehensive review. The Council supported this integrated approach for a thorough analysis of all related insurance policies. Decision for Agenda item No. 19 & 20 (Annexure IV, Volume III) and S. No. 6 (Annexure V, Volume I): The Council approved GoM for rate rationalization be tasked with examining GST on Medical and Health insurance, term life insurance and insurance for persons with Mental Illness (PMI) with the inclusion of additional members from the States namely, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Telangana and Tamil Nadu. The GoM is to suggest a way forward for all types of health insurance, including group, individual, family, floater, and reinsurance of Insurance services. The report may be submitted by the end of October. Agenda Item 4(d) : Joint Secretary, TRU-I presented the agenda pertaining to recommendations of the Fitment Committee where no change has been proposed in relation to services. 5.149 The first agenda item relating to request to fully exempt from GST horticulture services supporting the environmental causes due to their potential role in improving air quality. She stated that at present, pure services and composite supply of goods and services in which the value of goods constitutes not more than 25% of the total value of supply, in relation to any function entrusted to a Municipality are exempted. CPWD has requested it to be fully exempt, however, the Fitment Committee has recommended that the request may not be accepted. This recommendation was also agreed in the Officers’ Meeting on 8th September, 2024. 5.150 The Hon’ble Member from Delhi suggested on behalf of Delhi, PWD that giving exemption to horticulture services is important as a lot of agencies are involved in this sector. Since there are high GST rates and given the fact that Delhi faces high pollution levels so, this exemption can be given for a certain period of time. Accordingly, she suggested that a time bound exemption can be considered in this regard as this will push more service providers to get registered under GST. 5.151 Joint Secretary, TRU-I clarified that the current exemption in this regard is available as provided under S.No. 3 and 3A of notification No. 12/2017-CT(R) dated 28.06.2017 which exempts pure services and composite supply of goods and services in which the value of goods does not constitute more than 25%, respectively that are provided to Central Government, State Government or Union Territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. This exemption covers all kind of pure service or composite supply involving goods and service including horticulture. Any action expanding the scope of such exemption will impact other activities as well i.e. request of not having cap of 25% goods on such exemption will have wider ramifications. 5.152 The Secretary further clarified that the current exemption for such supply of services in which the value of goods does not constitute more than 25% is sufficient. Decision: The Council approved the recommendation of the Fitment Committee to not give exemption to composite supplies by way of horticulture/horticulture works where the value of goods constitutes more than 25 per cent of the total value of supply. 5.153 JS, TRU-I presented the next agenda item relating to reconsider 5% GST applicable on all bus bookings through e-commerce platforms. Currently, passenger transportation services supplied by non-AC contract/ stage carriage are exempt from GST. However, 5% GST is applicable on online booking done through e-commerce platforms and not applicable if the same booking is made physically in cash at bus counter or if booking is made directly from the bus operators’ website. She stated that Supply of any service through electronic commerce platforms is a distinct category of supply as compared to the service being supplied by individual service providers. So, Fitment Committee has recommended that the request may not be accepted. Decision: The Council approved the recommendation of the Fitment Committee to not reconsider applicable GST @ 5% on all bus bookings through e-commerce platforms. 5.154 JS, TRU-I presented the next agenda item relating on inclusion of “any body corporate” or “corporation” established under any State Act or Central Act or a “Government company” for purpose of exclusion under Section 9(5) of CGST Act, 2017. Based on the recommendation of the 52nd GST Council meeting, the bus operators organized as companies were excluded from the purview of section 9(5) of CGST Act, 2017 in order to enable them to utilize ITC for discharging outward liability on passenger transport services provided by them through Electronic Commerce Operators (ECOs). She stated that the present request is for expansion of scope of exclusion under section 9(5) to any body corporate. This was discussed and the Fitment Committee has recommended that the request may not be accepted. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee to not include “any body corporate” or “corporation” established under any State Act or Central Act or a “Government company” for purpose of exclusion under Section 9(5) of CGST Act, 2017. 5.155 JS, TRU-I presented the next agenda item relating to clarifying that the delivery services provided by delivery partners through the e-commerce operators are not taxable due to providers being below the threshold of Rs. 20 lakhs, or, to bring delivery services made in respect of those supplies made through ECOs under section 9(5) of CGST Act, 2017 with prospective effect and these delivery services may be taxed at 5%. She informed that during the deliberations on the said issue in the Officers meeting held on 08.09.2024 it has been recommended to defer the issue for comprehensive examination. Decision: The Council agreed to defer the issue for further examination by the Fitment Committee. 5.156 JS, TRU-I presented the next agenda item relating to clarifying that prior to 01.10.2021, GST @ 5% paid on job work activities qua alcoholic beverages be treated as GST fully paid and no recovery of differential tax, over and above 5%, should arise. She stated that Fitment Committee has recommended that the request may not be accepted as there is no ambiguity in the provisions of the law related to the taxability of job work activities qua alcoholic beverages. The same was also agreed in Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee that there is no ambiguity in relation to taxability of job work activities qua alcoholic beverages and no clarification is therefore required. 5.157 JS, TRU-I presented the next agenda item relating to request for exemption from 18% GST on Health Insurance premium for Persons with Mental Illness (PMI) which is a scheduled Disability under the Rights of Persons with Disabilities Act 2016 (RPWD Act). This was agreed in the officers meeting, and it was decided to take up this issue as a part of health insurance agenda that would be referred to the proposed GoM to be constituted for life and health insurance. Decision: The Council approved the recommendation of the Fitment Committee to take up the issue as a part of the health insurance agenda referred to the proposed GoM on life and health insurance. 5.158 Joint Secretary, TRU-I next presented four issues referred by the Law Committee to the Fitment Committee as under: (a)To prescribe End-use certification system / form for notification No. 12/2017- CT (Rate) [entry no. 3], which exempts pure services provided to Government, Local Authority in relation to Municipality functions; (b)To clarify whether the service of hiring manpower for providing services of Health, Public Garden, Promotion of education etc. are the functions entrusted to Municipality under Article 243W of the Constitution; (c)To clarify that the service of “Enumeration & Supervision” provided by the implementing agency i.e. CSC-SPV, to MoSPI is exempt from GST under exemption entry 3 of notification No. 12/2017- CT(R) dated 28.06.2017; and (d)To clarify that the services of spatial planning study, provided by the institutes to Ministry of Panchayati Raj is exempt from GST under exemption entry at Sl. No. 3 of notification No. 12/2017-CT(R) dated 28.06.2017. 5.159 In addition, there was another agenda item pertaining to clarifying about liability of GST on Man Power Supply Services received by Panchayats, Municipalities and Local Bodies. She informed the council that in the earlier meetings of the GST Council, there was a proposal to prune the list of exemptions under Sr.No. 3 and 3A of the Notification Number 12/2017-CT (Rate), whereby pure services and composite supply of services provided to the Government or Local Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or to a Municipality under Article 243W of the Constitution, are exempt from levy of GST. These issues were tagged with another proposal regarding clarification of the scope of the words “in relation to”. In the 52nd GST Council meeting held on 07.10.2023, the Council has recommended to retain the entries at Sl. No 3 & 3A of notification No. 12/2017-CT(R) dated 28.06.2017 as it exists with no change. Fitment Committee has recommended that no further clarifications are required on the issue and hence the requests may not be accepted and that status quo may be maintained. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee that no further clarification is required on the above issues. 5.160 JS, TRU-I then presented the next agenda item relating to a Writ Petition fi led before Hon’ble Delhi High Court by an Association of Private Security Industry wherein they have inter-alia contested the exclusion of body corporates from making payment under Reverse Charge Mechanism (RCM) in respect of security services. [Entry at Sl. No. 14 of the notification No. 13/2017-CT (R)]. Hon’ble Delhi High Court had directed to treat writ petition as a representation and to take appropriate action as deemed fit. She stated that currently, the security services (provided by way of supply of security personnel) provided by any person other than a body corporate are covered under RCM when provided to a registered person except government departments registered for TDS and entities registered under composition scheme services. The Association of Private Security Industry has represented to bring the entire security services sector including body corporate under RCM. Fitment Committee has recommended that the request may not be accepted. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee to not include security services provided by the body corporates under RCM. 5.161 Joint Secretary, TRU-I presented the next agenda item relating to exemption from GST on the services provided by Goethe Institutes/Max Mueller Bhavans, funded by the German Federal Foreign Office, in India for the period from 01.07.2017 to 31.03.2023. She stated that the Fitment Committee has examined the issue and recommended that the request may not be accepted. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee to not exempt GST on services provided by Goethe institutes/ Max Mueller Bhavans funded by German Federal Foreign Office for the past period from 01.07.2017 to 31.03.2023. 5.162 JS, TRU-I presented the next agenda item relating to request to exclude the Legislative Area Development Fund from the ambit of GST. A similar request regarding GST exemption for works carried out under MPLAD funds was placed before the 47th GST Council in its meeting held on 28th-29th June, 2022. However, the council did not accede to the request. She stated that accordingly, the Fitment Committee has recommended that the request may not be accepted. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee to not exclude the Legislative Area Development Fund from the ambit of GST. 5.163 JS, TRU-I presented the next agenda item relating to the request of uniform rate of 5% GST on all purchases charter and all services rendered by helicopters including rental paid for hangarage. The Fitment Committee examined this issue and has recommended that the request may not be accepted. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee to NOT accept the request that on helicopters uniform rate of 5% GST should be charged on purchases charter, sale of seat tickets and all services rendered by helicopters including rental paid for hangarage. 5.164 JS, TRU-I presented the next agenda item relating to the request to rationalize GST on cargo services from 18% to 5% to bring it in line with other services. This was also examined by Fitment Committee and it has recommended that the request may not be accepted. This was also agreed in the Officers’ meeting on 8th September, 2024. Decision: The Council approved the recommendation of the Fitment Committee that GST on cargo services be NOT rationalized from 18% to 5%. 5.165 Joint Secretary, TRU-I presented the next agenda item relating to clarifying whether ITC of other business verticals can be used to discharge GST on outward liability in respect of restaurant service given the restriction of input tax credit as specified in notification No. 11/2017-CT (Rate) dated 28.06.2017, as amended, against entry at Sl. No. 7 & in 8, 9, 10, 23, 25, 31A. The agenda item has been withdrawn by the sponsoring state and Fitment Committee recommended to withdraw the agenda. Decision: The Council approved the recommendation of the Fitment Committee to withdraw the agenda. 5.166 JS, TRU-I presented the next agenda item relating to exemption to GST on services related to water harvest scheme. The Council was informed that the said agenda has been withdrawn and no action is due. Decision: The Council approved the recommendation of the Fitment Committee to withdraw the agenda. Agenda Item 4(e): JS, TRU-I took up the next agenda item on the issues deferred by the Fitment Committee for further examination in relation to services (circulated as Annexure-VI of Sl. No.4 in Agenda Volume I & III). 5.167 She informed that 9 issues have been recommended to be deferred in the Council for further examination in relation to services as circulated in the Agenda. Decision: The Council approved the recommendation of Fitment Committee to defer the issues. Agenda Item 4(f): Review of 51st GST Council meeting’s recommendation on the taxation of supplies in casinos, horse racing and online gaming 5.168 The Secretary invited Joint Secretary, TRU–I to present the next agenda item pertaining to the decision of the GST Council to review the changes made to taxation of online gaming and Casinos, as recommended in the 51st GST Council, after six months along with the status of revenues with regard to casinos and online gaming after implementation from 1st October, 2023. 5.169 JS, TRU-I summarized the decisions taken in the 50th and 51st GST Council meetings based on which amendments were made in the Acts to provide clarity on taxation of casinos, horse racing and online gaming. All three would continue to be taxed at 28% irrespective of whether they are games of skill or chance, and valuation in respect of casinos and online gaming would be the amount deposited excluding bets placed out of winnings. Definitions of online gaming, online money gaming and specified actionable claims have been inserted. Special provision has also been inserted for services provided by persons located outside taxable territory; valuation rules have been brought into force w.e.f. 01.10.2023. 5.170 JS, TRU-I presented the status of revenue from online gaming. She stated that pre-amendment, the revenue paid in cash was Rs. 1,349 crores and after the amendment the revenue had increased to Rs. 6,909 crores i.e., 412% increase. In case of Casinos, the pre and post revenues were Rs. 164 crores and Rs. 214 crores respectively i.e., there has been a 30% increase. 5.171 The Secretary clarified that this revenue of Rs. 6,909 crores was only for 6 months and if the same were to be projected for 12 months, the revenues would be about Rs. 14,000 crores as against what would otherwise have been less than Rs. 3,000 crores- a 400 % increase. The decision not to wait for the Hon’ble Supreme Court to decide and to proactively clarify through an amendment has really helped as far as revenue collection from online gaming is concerned. 5.172 The Secretary stated that as far as revenues from casinos are concerned, there has been a 30% increase in revenue from the two states of Goa and Sikkim. 5.173 JS, TRU-I further addressed the concerns of domestic online gaming companies that the business would shift to off shore online gaming companies. She stated that a provision was specifically put in that if any offshore gaming company provides service in India, they have to either register or appoint a representative and if they fail to comply, the access to the websites can be blocked. DGGI had shared 134 URL websites with MeitY for blocking and MeitY had blocked 62 out of 134 websites so far. She further clarified that investigations are ongoing and DGGI would be listing some more of such websites to send to MeitY. 5.174 The Secretary sought comments and suggestions from the Hon’ble members. 5.175 The Hon’ble Member from Karnataka stated that whereas they had lost revenue on various other accounts, they are happy that substantial revenue has come to Karnataka from this. All the apprehensions that had been deliberated have not borne out to be true. Majority of these companies are in Bangalore. Post implementation, no major grievances have been heard from them. It is working well from the sectoral point of view. Even the turnover is maintaining its usual steady growth rate and there is no dip there. It seems to have worked out well for those who were really looking for some sources of revenue. It has been a good decision. 5.176 The Hon’ble Member from Sikkim stated that the growth which was shown at 30 % on casino was quite opposite to what Sikkim was seeing right now. There was a tremendous dip in the revenues generated, which has been brought out in data given by them. The decline of revenue by 24% was reflection of downfall in tourism which is due to recession in casino industries to a great extent. The footfall of tourists from October 22 to March 23, has decreased from 977638 to 559470- a decrease of 43%. So in respect of Sikkim it was not justified because they were at a loss and were suffering tremendously. For that the details had been given in the written speech which had circulated amongst the members. 5.177 The Secretary submitted that the figures mentioned in the speech circulated were based on some assumptions. As per actual numbers, the revenue certainly had decreased for the period if one looks at the six-month period before and after the implementation. This is because of the seasonality. Most of the tourism come in the summer months. If data for April to September 2023 is considered, which is just before the implementation of the new valuation rules, the tax collected was much higher and after that revenue might have dipped because of non-tourist season. When the comparison was made like to like month wise, which is April to July 2023 and April to July 2024, revenue had increased from Rs. 2.3 crore to Rs. 3.5 crore. For Sikkim, increase was 52%. Similarly for Goa, for April 2023 to July 2023 and then April 2024 to July 2024, it had increased from Rs. 101 crore to Rs. 148 crore which is an increase of 46%. So overall the increase even in casinos for a like to like comparison was 47%. Online gaming did not have such seasonality, so comparison of six months just prior to the implementation of the new rules with the six months after the implementation of the new rules has been done. Month wise data could change and so based on this data, comparing April to July 2024 of this year vis-a-vis same four-month period last year, the revenues increased 52% for Sikkim and 46% for Goa respectively. 5.178 The Hon’ble Member from Goa stated that the revenue of Goa had increased but the casino industry is related directly to tourism industry. Hotel industries and taxi industries were also dependent on these casinos. Today it was showing increasing trend but long run it will not go on because the actual casino players had started to shift to Nepal and to the other countries. Even though the tourists, who were not actually the players but seek an experience of how the casinos work by going there for one time are much worried about the increased rate of GST. Their number has decreased. The actual comparison of revenue from casino and tourism, how it affected the tourism or comparison with the increase in the revenue from the casinos, could be presented in the next GST Council Meeting, if an opportunity is given to them. 5.179 The Hon’ble Member from Sikkim stated that with Nepal they had a similar problem. Bagdogra is the only airport operational for Sikkim as Pakyong Airport is dysfunctional because of weather conditions and its road also is in a very bad state. The casinos in Nepal are about half an hour drive from the Bagdogra Airport where as to arrive in Sikkim in present conditions takes about 7 to 8 hours. So, people have been shifting their base towards Nepal. Nepal is a tax haven which is why all the revenue is flowing towards Nepal and Sikkim is losing out. This can be brought back to our country. 5.180 The Hon’ble Member from Sikkim requested Hon’ble Chairperson to kindly revisit the issue. They have advocated that 28% be charged on GGR (Gross Gaming Revenue) and not on the full-face value. 5.181 The Hon’ble Member from Uttar Pradesh stated that he was also the member of this GoM and a lot of discussions on the issue had taken place. The Secretary had already given the data. It was always known that the revenue was not going to decrease. As for Sikkim, it is a very small state and we all have full sympathy for them. It is another fact that their revenue has not decreased. In his view, if their infrastructure and other things are better; tourism will not be affected. Between GGR and face value, it is easier to calculate face value. If tax is levied on GGR, revenue will decrease and that needs to be foreseen. It will be welcome if Sikkim could be facilitated in some other way. The system that is running at present, due to which the revenue has increased, should be allowed to continue. The fear of Goa is also not right. It has the advantage of infrastructure, climatic conditions and beaches. Casino is not the only reason to go there. It is one of the attractions only. The fear of the concerned states should be removed. Many had commented on online gaming industry that it would be closed. Today more than 17 crores people are involved in online gaming whereas in share market, only 14 crores people are involved. Taxing on face value should continue. 5.182 The Hon’ble Member from Sikkim replied that taxation on this method of face value of sales of chips can encourage the players to purchase chips from fellow winning players who will not charge tax on the sale or from the bookie at the table without tax invoice. So, here also there could be evasion of tax. 5.183 On the observations made by Hon’ble Member from Sikkim, the Secretary observed that while players can use the method mentioned, revenues were still increasing. 5.184 The Hon’ble Member from Sikkim requested to provide one more chance to look into it, revisit the matter and get back again. 5.185 The Secretary stated that review was a continuous process. The Council had taken a view that issues once decided by the Council should not again be brought to the Council unless there was a specific Council direction to bring about a finality to the issue. This matter was deliberated in great detail and only after that that the decision was arrived at, the revenues had also increased not only for online gaming also for casinos. He reiterated that tourism was not a function primarily of casino. Goa as well as Sikkim had so much of natural beauty, climate, beaches, hills, other monuments, etc. and those were the primary drivers. If the tax was a little high, tourists' participation might dip in such activities, but still, they would go and spend time in Goa and Sikkim. The other factor to consider is whether the same should be made the USP for tourism and if so, then the question is how far should it be encouraged. He suggested that other avenues to promote tourism might yield better results. He requested the Council to take on record the report presented by the TRU. 5.186 The Hon’ble Member from Karnataka stated that, in a lighter vein, even the online gaming had seasonality. During the IPL, there was a spike in online games. Further, they have studied the data on turnover of top five online gaming companies. The fifth top company was declaring 167% growth rate while the top company was declaring 359% growth in their turnover. So, maybe it has brought greater transparency. If the volumes were growing by 100-300%, it is because of the growth in consumption in the online games. Transparency of data is also helping. 5.187 The Hon’ble Chairperson credited the Council for the decision which was taken after so much of deliberations over a period of three years involving more than one round of discussions and which involved different interactions with different stakeholders. It was clear from the facts presented by the Karnataka's minister that the rate which the Council decided in its wisdom has not hurt the industry. The Hon’ble Chairperson appreciated the wisdom and the consideration with which decisions are taken in the Council as a result of which the industry flourishes, but revenues are also being earned. More importantly, tracking and tracing happens. Decision: The Council took on record the status of revenue report with regards to Casino and Online Gaming after its implementation from 01.10.2023. Agenda Item 4 (g): Issuance of circular clarifying the scope of the phrase ' as is where is basis' 5.188 JS, TRU-I stated that this has already been discussed earlier in the agenda pertaining to the recommendations of the Fitment Committee. Agenda Item 4 (h): Report of Committee of Officers on Taxation of Extra- Neutral Alcohol under GST for the past period (from 1.7.2017 to 20.10.2023) 5.189 The Secretary then introduced the next agenda item relating to the Report of Committee of Officers on Taxation of Extra-Neutral Alcohol under GST for the past period (from 01.07.2017 to 20.10.2023). The GST Council in its 52nd meeting had decided to keep the Extra Neutral Alcohol for use in manufacture of alcoholic liquor for human consumption outside the ambit of GST. Joint Secretary, TRU-I stated that a Committee of Officers (CoO) was constituted as per directions of the GST Council in its 52nd Meeting held on 07.10.2023 with Joint Secretary, TRU-I as Convenor and with States of Andhra Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Uttar Pradesh and West Bengal as members to study the taxation of Extra-Neutral Alcohol under GST for the past period (from 01.07.2017 to 20.10.2023). 5.190 JS, TRU-I stated that the Committee of Officers had conducted three meetings. The Committee examined the data collected from States/UTs and CGST formations including protective demands raised under GST/VAT on ENA and GST/VAT revenue collected on ENA /Rectified Spirit / Undenatured Ethyl Alcohol used for alcoholic liquor for human consumption. She further stated that the committee noticed divergent practices among the states wherein some states were charging only VAT while State of Karnataka was charging only GST and some other states were charging both VAT and GST. Further, State of Uttar Pradesh had started collecting GST following the decision of Hon’ble Allahabad High Court in the case of M/s Jain Distillery Private Limited. As per the collective data (including the given by State of Delhi and State of Jharkhand), GST collection is Rs.473 crores, VAT collection is Rs.6,528 crores whereas the GST demand notices have been issued for about Rs. 680 crores and VAT demand notices have been issued for about Rs.39 crores. 5.191 One of the solutions discussed in the meetings was whether to regularise the past on “as is where is basis”. The issue on whether States have the power to levy VAT on ENA under Entry 8 of List II is currently sub-judice before the Hon’ble Supreme Court on an appeal filed by State of UP against Allahabad HC judgement in the case of M/s Jain Distillery Private Limited State of UP informed the Committee that the matter is likely to be decided soon. Members of the Committee raised the apprehension that in the event the Hon’ble Apex Court upholds the HC decision then all States would have to refund the VAT collected. In such a situation if the past period is regularized on ‘as is where is’ basis, recovery of GST against demands raised would also not be possible. Therefore, Committee of Officers has recommended that a view may be taken after the decision of the Hon’ble Supreme Court. 5.192 The Secretary requested the Council to accept the recommendation of the Committee of Officers to wait for the decision of the Supreme Court regarding the taxability of ENA with respect to VAT and GST. Decision: The Council accepted the report of Committee of Officers and recommended to wait for the decision of the Hon’ble Supreme Court regarding the taxability of Extra-Neutral Alcohol. Agenda Item 4(i): Status update on Group of Ministers (GoM) on Rate Rationalization 5.193 The Hon’ble Convenor of the GoM on Rate Rationalization presented a status update. 5.194 The Hon’ble Convenor of the GoM brought out that the GoM was set up based on the recommendations of the GST Council in its 45th Meeting It was entrusted with the important task related to rate rationalization. He observed that while taking into consideration any measures aimed to increase the revenue, it must be ensured that the life of common citizens does not get adversely impacted. He further stated that the GoM has been reconstituted several times and that currently, apart from him (the Hon’ble Deputy Chief Minister of Bihar) the GoM includes Hon’ble Ministers from the State Governments of Karnataka, Uttar Pradesh, Rajasthan, West Bengal and Kerala as its members. He also mentioned that the four Terms of Reference (ToR) of the GoM are: i.review the supply of goods and services exempt under GST; ii.review the instances of inverted duty structure; iii.review the current tax slab rates and iv.review the current rate slab structure of GST. 5.195 In addition, certain other issues have also been referred to the GoM. In the 47th meeting of the GST Council, the GoM had submitted its interim report containing recommendations on corrections in inverted duty structure and review of exemptions on supply of goods and services in the GST rate structure. The GoM had also requested 3 months’ time for the GoM to come up with its final report. The interim report was accepted by the GST Council and 3 months’ extension was also provided to submit a final report. In addition, the GST Council during various Council meetings, had referred certain additional issues to the GoM for a holistic and comprehensive examination such as: (i)Issue relating to correction of Inverted Duty structure in Textile Sector was referred to GoM in the 46th GST Council Meeting; (ii)issue relating to reduction of GST rate on silk, silk weaving material and handloom weavers was referred to GoM in the 47th GST Council Meeting and (iii)issue relating to rationalisation of rates of inputs in Fertiliser sector was referred to the GoM in the 53rd GST Council Meeting. 5.196 He informed that the 4th meeting of the GoM was recently held on 22nd August, 2024 in Delhi and that in the next meeting, the GoM shall consider the remaining two terms of reference related to the review of the current tax slab rates and review of the current rate slab structure of GST. 5.197 The Hon’ble Convenor of GoM further stated that in the GoM Meeting held on 22nd August, 2024, the remaining two terms of reference pending before the GoM were discussed in detail and it was decided to hold the next meeting of GoM on 25th September, 2024. The recommendations of the GoM on the Terms of Reference and the other issues referred to it for examination shall be incorporated in the Final Report and placed before the GST Council in due course. 5.198 The Secretary sought suggestions and inputs on rate rationalization, especially in relation to the five-rate structure of GST and rate rationalization which are the remaining two terms of reference of the GoM. 5.199 The Hon’ble Member from Uttar Pradesh suggested that the issue of “rate rationalization of GST on Shoes”, on which they had received a representation from the Shoe Manufacturers Association, may be referred to the GoM on Rate Rationalization for comprehensive examination. 5.200 The Secretary clarified that this issue was related to the duty inversion and that the GoM had already submitted their report on this term of reference. However, he added that the Council may reconsider the issue, if required. 5.201 The Hon’ble Member from Uttar Pradesh again proposed that the issue of reduction in GST rate from 12% to 5% on shoes with MRP less than Rs.1000/- may be examined by the GoM on Rate Rationalization. 5.202 The Hon’ble Member from Gujarat concurred with the proposal of the Hon’ble Member from Uttar Pradesh. Decision: The Council took note of the status update as presented by the convenor of the GoM on rate rationalization. It also agreed to refer the issue of reduction in GST rate from 12% to 5% on shoes with MRP less than Rs.1000/- to the GoM for comprehensive examination. Agenda Item 4 (j): Status update on Group of Ministers (GoM) on boosting real estate sector under GST regime 5.203 The Hon’ble Member from Goa as the Convenor of GoM for boosting real estate sector under GST regime referred to the last meeting dated 22.08.2024 of GoM in Delhi. 5.204 He asked the Joint Secretary, TRU-II, to provide the status report of the first two meetings of the GoM on boosting Real Estate Sector held in 2019 as he had not attended these meetings thereafter, he would provide the status update of the third meeting of GoM. 5.205 JS, TRU-II stated that the GST Council in its 32nd meeting held on 10th January, 2019 had recommended constitution of a Group of Ministers on boosting the Real Estate sector under GST regime. At present, the Convenor of GoM is the Hon’ble Chief Minister of Goa and the Hon’ble Ministers from the States of Bihar, Maharashtra, Kerala, Punjab, Uttar Pradesh and Gujarat are its members. Since its constitution, the GoM had conducted three meetings. The first meeting was held on 08.02.2019 and second meeting of the GoM was held on 21.11.2019. Third meeting had been recently held on 22.08.2024. 5.206 He stated that the Terms of Reference of the GoM are: i.Analyse tax rate of GST for boosting real estate sector by providing a composition scheme for residential construction units; ii.Examine and suggest ways for composition scheme or any other scheme, for boosting the real estate sector and suggest scheme for transition vis-a-vis introduction of suggested scheme; iii.Examine various aspects of levy of GST on Transfer of Developmental Rights (TDR) and Development Rights in a Joint Development Agreement; iv.Examine legality of inclusion/exclusion of land or any other ingredient, in composition and suggest the valuation mechanism: and v.Examine and suggest any other aspect relevant to boost Real Estate Sector. 5.207 JS, TRU-II further stated that the earlier GoM had given certain recommendations on these terms of reference. As far as the first ToR on GST rate for residential construction units by providing a composition scheme was concerned, based on the recommendations of the first GoM, the effective rate of GST was brought down from 8% with Input Tax Credit (ITC) to 1% without ITC for the affordable residential apartments and GST rate was brought down from 12% with ITC to 5% without ITC for other than the affordable residential apartments. At the same time, levy of GST on TDR and Development Rights was also discussed in the earlier GoM and that GoM had recommended for intermediate tax on Development Rights given by the land owner to the builder to be exempt and liability to pay the tax on such development rights to be shifted from land owner to builders under the Reverse Charge Mechanism (RCM). This recommendation of the earlier GoM was also accepted by the Council. As far as the ToR related to examining any other relevant aspect is concerned, the earlier GoM in its second meeting had recommended to exempt GST for an entity having 20% or more ownership of government for granting long term lease of land (30 years, or more) for industrial plot. Earlier this limit was 50% which was brought down to 20%. 5.208 Thereafter, the Hon’ble Convenor of the GoM stated that the third meeting of GoM had been held on 22.08.2024 wherein the GoM discussed all the issues pending before it. It was suggested to seek reports from states who have given the status of industry to other sectors (including tourism sector) with a view to examine the issue of inclusion of ‘other businesses’ in the existing exemption entry to exempt GST payable on long term lease of 30 years or above. With respect to the issue of redevelopment of buildings in own co-operative society, Hon’ble Convenor informed that the State of Maharashtra has been requested to submit a detailed proposal. Similarly, State of Maharashtra has been requested to provide details on supply of construction services provided by the Co-operative Housing Society (CHS). To review the limit of Rs.45 lakhs in the definition of affordable residential apartment for metropolitan areas, the Convenor stated that the GoM is examining if the value limit should be on space basis and not on rate basis. He said that the last GoM meeting was held after a gap of four years and now the GoM is trying to expedite its meetings so that it can conclude the recommendations of GoM. He also informed that the next GoM meeting was scheduled to be held on 24th September, 2024. The Convenor stated that all the members of GoM had given good suggestions. He specially appreciated the suggestions given by the Hon’ble Member from Uttar Pradesh. He further added that the GoM shall prepare concrete recommendations by the next Council meeting. Decision: The Council took note of the status update of GoM on boosting real estate sector under GST regime. Agenda Item 5: Recommendations of the 21st meeting of the IT Grievance Redressal Committee for approval/decision of the GST Council: 6.1 Joint Secretary, GST Council Secretariat presented the next agenda item relating to the recommendations of the 21st meeting of ITGRC which was held on 01.08.2024, for approval/decision of the GST Council. 6.2 JS, GST Council Secretariat stated that a total of 55 issues were tabled as agenda in the meeting of ITGRC. The first 32 issues pertained to data fixes for the period upto March, 2024. The issues which were brought before ITGRC were technical glitches which the taxpayers faced and GSTN was required to do a back-end data fix for such corner scenarios. These issues were divided into those which had financial implications and those which did involve any financial implications. Data fixes done by GSTN in respect of 27 technical issues with no financial implications were taken note of by the ITGRC. ITGRC took note of the data fixes carried out by GSTN in 765 cases involving an amount of Rs. 1289.60/- with respect to 3 technical issues where there were financial implications and the correct data was known. The data fixes carried out by the GSTN in case of two court directions impacting three cases were also taken note of by the ITGRC. In addition, data fix in 23 cases had been done between April to June 2024. There were 13 technical issues with no financial implication where data was known. ITGRC took note of the data fixes done in 9 issues, 4 issues were deferred for the next meeting. 10 technical issues with financial implication were also deferred for the next meeting. Further, an update on an issue recommended by the ITGRC in the previous ITGRC meeting, could also not be taken up due to paucity of time. One recommendation of the ITGRC was in cases where the taxpayers face a login error due to double quotes in the legal name. The ITGRC recommended that GSTN should take note of the limitation imposed by the current technology and recommended that special characters can be allowed in the system for the legal name of taxpayer. 6.3 The Secretary stated that recommendations of the ITGRC were also agreed to in the Officers’ Meeting held on 08th September, 2024. Decision: The GST Council approved the recommendations made by the ITGRC during its 21st meeting and took note of the data fixes carried out by GSTN. Agenda Item 6: Performance Report of the Competition of India (CCI), State Level Screening Committee (SLSC) and DG (Anti-Profiteering) for 1st quarter of the F.Y.2024-25 along with Performance Report of Standing Committee (SC) for 3rd quarter and 4th quarter of F.Y. 2023-24 and 1st quarter of F.Y. 2024-25 for the information of the GST Council. 7.1 The Secretary presented the agenda pertaining to the Performance Report of the Competition of India (CCI), State Level Screening Committee (SLSC) and DG (Anti-Profiteering) for 1st quarter of the F.Y.2024-25 along with Performance Report of Standing Committee (SC) for 3rd quarter and 4th quarter of F.Y. 2023-24 and 1st quarter of F.Y. 2024-25 for the information of the GST Council 7.2 He informed that this agenda was taken note of in the Officers’ Meeting held on 8th September, 2024. Decision: The Council took note of the Performance Report of CCI, SLSC, DG (AP) and Standing Committee as presented in the agenda. Agenda Item 7: Issues recommended by Goods and Services Tax Network (GSTN) 8.1 The Secretary then introduced the agenda item relating to issues recommended by Goods and Services Tax Network (GSTN) and asked the CEO, GSTN to present the agenda. 8.2 CEO, GSTN stated that there are three developments which are in pipeline and important which are being placed before GST Council for information and approval. He stated that in GST, e-invoicing was initiated four years back for B2B transactions. B2C transactions are still not e-invoiced. So, a pilot project for B2C e-invoicing is proposed to be initiated. Second agenda item is regarding integration of UPI, Debit card and Credit card payments and the present status thereof. Third agenda item is regarding some important structural change in the return design of GST, which is partly implemented and partly in pipeline, which will lead to better error free filing of the GST returns. Also there are two ledgers which are being designed i.e. Reverse Charge ledger and ITC Reclaim ledger. Then there is an IMS (Invoice Management System) and GSTR-1 correction system which is called GSTR-1A. 8(a) B2C e-Invoicing Pilot Project 8.3 CEO, GSTN stated that B2B e-invoicing is in place but the difficult end of retail e-invoicing is retail and in retail, invoicing is often not done and even if done, it is not known whether the invoice has been reported to the GST authorities or not. GSTN has done some technology studies and building upon the learning of the B2B e-invoicing project, the pilot project of B2C e-invoicing is proposed. It would be implemented completely on a voluntary basis as a soft touch approach with retail trade will be needed. He stated that the project will be done in a few selected sectors and with those states which are willing to join this pilot project. It was also informed that fairly decent number of states have expressed interest in this pilot project during discussion in the officer's meeting. 8.4 Further, CEO, GSTN brought out the advantages of digitizing the retail transactions. First, it will help in controlling tax evasion. Second, it will be a green initiative as invoices are stored in a digital format and paper invoices are done away with. This will save many trees and would be environment friendly. He informed that it would be cost efficient also, as the paper invoice management and maintenance costs rupees 3 to 4 per invoice to the industry, whereas the cost of digital invoice comes to just a few paisa. 8.5 CEO, GSTN informed that they also intend to add a feature of verification of authenticity of the invoice. This would mean that when the retailer gets the invoice, he will get it on his mobile phone and within 48 hours, he will be able to check whether the supplier i.e. retail shopkeeper has reported this invoice. The system will be automatic and continuous. He stated that it will be a kind of public movement, where the citizens of the country will be able to see that the tax which they have paid with their total consideration to a retailer has actually been reported to the GST authorities or not. 8.6 CEO, GSTN stated that the proposal before the Hon’ble Council is to accord in principle approval for initiating B2C e-Invoicing pilot project on a voluntary basis. He also requested the Council to direct the Law committee to recommend necessary amendments in the law to enable the same, which may require some change depending on which sectors and which states are willing to participate and also authorize GSTN Board to prepare and finalize the commercial model for this. It was proposed that in the initial stage, for the retailers who volunteer to take up B2C e-invoicing, GSTN will provide some support for digitizing and updating their ERP system. 8.7 The Secretary added that one of the advantages will also be that going forward if refunds to foreign tourists are operationalized, then for the customs officer at the airport it will become very easy to check whether the tax has actually been paid, if it is an e invoice. Further the Secretary stated that this agenda was discussed in the officers’ meeting and received large-scale support and enthusiasm for implementation. It is proposed to be introduced on voluntary basis and then going forward it can be made mandatory in sectors prone to tax evasion. 8.8 The Hon’ble Member from West Bengal expressed willingness to take up the project in the restaurant sector. The Hon’ble Member from Kerala stated that they are ready to take up the same on pilot basis. The Hon’ble Member from Andhra Pradesh also expressed willingness and proposed that the sectors can be state specific so that they can take up those sectors which are priority for the state. The Hon’ble Member from Delhi also volunteered for the project. The Secretary informed that in the first stage, the technology would be tested as to whether it is glitch-free and working smoothly. Once tested the spread would be expanded. The Hon’ble Chairperson stated that the sector specific request as made by the Hon’ble Member from Andhra Pradesh could be in the second stage after completion of the pilot. The Hon’ble Members from Gujarat, Punjab, Uttar Pradesh and Madhya Pradesh also expressed their willingness to join the pilot project. Decision: The GST Council approved the agenda regarding Pilot project for B2C e-invoicing. 8(b) Integration of UPI, credit card and debit card payment option by Accounting Authorities. 8.9 The Secretary asked the CEO, GSTN to present the next agenda regarding UPI, credit card and debit card payment integration, which is for information and a request for the states to implement the same. 8.10 CEO, GSTN informed the Council of the present status of UPI, credit card and debit card payment integration and also requested to the remaining states to also integrate UPI, credit card and debit card payments. He stated that their treasury will need to take one more piece of information by API integration and that the States which are remaining to be integrated are all very capable. He also informed that after they had made this presentation in Officer’s meeting, and that Arunachal Pradesh already integrated while most of the remaining states expressed their readiness to integrate within two weeks. Accordingly he requested other states also to take note and complete the process of integration for the entire country so that the taxpayers could use these three modes of payment and this would be a great facilitation measure for them. 8(c) Enhancement in the existing GST Return Architecture 8.11 The Secretary then prefaced the next agenda item regarding important structural changes in the return design of GST, by stating that there are two primary objectives of the presentation by CEO, GSTN on the new return architecture which has been built with the approval of the Council. He stated that there are a lot of mismatches between the returns GSTR 1 & GSTR 3B on one hand and GSTR 2A & GSTR 3B on the other hand. Further he stated that due to lot of mismatches, notices are being issued, and many of them have not resulted in any additional benefit or accrual of revenue because the taxpayers are actually able to explain the said mismatches. He further stated that the new change in return design will avoid these mismatches and in fact eliminate the mismatches and number of notices running into lakhs. It will also benefit the taxpayers by eliminating the inconvenience caused to the taxpayers. Further he stated that the second important benefit that will accrue is the reduction in tax evasion through fake billing and bogus firms. The system had been developed with the above objectives in mind. 8.12 Further, the Secretary requested the CEO GSTN to take the Council through the essential features of the system so that the knowledge and awareness amongst the taxpayers could be spread. He stated that if there are any suggestions from the Hon’ble Members of the Council, the same can be taken on board in further improving the system. 8.13 CEO, GSTN stated that certain ledgers have been added for ITC mismatch. One of them is ITC Reclaim ledger. In respect of the ITC Reclaim ledger, he explained that if a taxpayer gets a credit of 100 rupees in a month and he is availing only 80 rupees, the system earlier was not tracking the balance 20 rupees. ITC Reclaim ledger now essentially leads to the system tracking of the credit that has not been availed in the month in which the ITC had accrued. And in future when the taxpayer reclaims the accrued ITC along with that month's credit, the system would show to him the past credit balance of 20 rupees plus this month's credit, which could be availed. Further he stated that at present the system is running in what is called a warning mode, which means, if the taxpayer wishes to take more credit than the sum of month’s available credit and the credit available in the opening balance, it pops up a warning message to the taxpayer but allows him to avail the said excess credit. But sometime in the future, it presents an opportunity to lock the same and not allow erroneous return wherein excess ITC has been availed to be filed. 8.14 Further he stated that in the Reverse Charge Mechanism ledger, wherein the taxpayer himself pays the tax and then takes the credit, a similar mechanism is proposed for carrying forward the same in the ledger. He explained that currently, if a taxpayer’s total tax payment is 100 rupees, but he utilizes 50 rupees of credit and decides to carry forward the remaining 50 rupees, this remaining 50 rupees was not being tracked in the system in the past. He stated that now it can be tracked in the system and if the taxpayer tries at a future date to take more credit than available, initially a warning message is being given. 8.15 CEO, GSTN stated that both the ledgers have an opening balance statement which is being made available to the trade so that taxpayers can give one time balance of the amount of credit they had failed to utilise in these ledgers for the past period, and also there would be a facility for one time amendment. He stated that thereafter these ledgers will start running and tracking the ITC credits. 8.16 Further he stated that at present the ITC statement which is presented to the taxpayer on 14th of every month has multiple sources from which the ITC credit comes and these credits come from individual invoices. He further stated that the system was not tracking as to what happens to the individual invoices. So, a new feature which is proposed to be added is to provide the recipients with “Reject, Accept, No action and Pending” options in a Invoice Management System Dashboard for individual invoices. He further informed that now the buyer will have to clearly state in relation to each of the invoices of his purchase as to what is his position whether he would be availing the credit or rolling it to the ITC Reclaim ledger or rejecting the transaction. 8.17 Further he stated that this is a optional facility. This has been designed as a voluntary IT facilitation measure for the recipients. If the taxpayer decides not to take any action then it will be deemed that all the invoices which have come to him in his ITC statement GSTR 2B are being accepted. So this will also allow for better matching and tracking of ITC. 8.18 He stated that this has been on the wish list of the tax administrations for a long while now, that the ITC gap is closed and ITC claim is completely in line with what is legitimately due. It is expected that mismatches would not occur and both sides gain in terms of taxpayer not getting notice and the tax administrations gaining additional revenue by closing the gap of ITC, which is being misused now as fake credit. 8.19 Further the CEO GSTN informed that GSTR Form 1A is a GSTR-1 correction Form, which has already been rolled out. He further stated that on 11th of the month, when the invoices are reported in GSTR- 1, it is auto filled as liability in GSTR-3B. Now an intermediate form GSTR 1A is provided, which is again a completely optional form, which can be ignored by the taxpayer if it is not needed by him. He further added that if taxpayer wishes to change his liability, which he had declared in GSTR1, before filing of GSTR 3B, then he can fill GSTR Form 1A. So, the taxpayer’s liability will then change to GSTR-1 plus GSTR-1A, which would be auto populated in GSTR-3B. He further stated that this again will allow the authorities to ensure that the total liability which taxpayer mandatorily must file and pay in GSTR 3B is sum total of GSTR1 and 1A because taxpayer has been given the facility to file as well as correct the same, which means error correction mechanism has also been added in the system. He stated that the same has already been rolled out and in the first month reasonable number of taxpayers have used it. Many taxpayers have tested it but not filed the return. They have filled the data and tested whether their GSTR-3B is getting updated or not. 8.20 Further, he stated that no major glitches in this system have been reported and it is expected that in two to three months’ time, the system will mature. So, in two to three months’ time, the possibility of not allowing erroneous returns to be filed in GST system from the liability side could be looked at. 8.21 CEO, GSTN requested the GST Council to take note of the above developments of ITC Reclaim ledger, RCM ledger and Invoice Management System. Further he requested the GST Council to approve the timelines of opportunity given for declaration of opening balance and amendment thereof in ITC Reclaim ledger and RCM ledger and authorize the Law Committee to revise timelines if necessary. This should present an opportunity in due course of time to prevent erroneous claim of ITC and will reduce erroneous return filing. 8.22 The Secretary stated that they have witnessed lot of buoyancy over the last few years because of the introduction of the GSTN system. But the next wave of tax buoyancy will need us to take more technology related measures, two of which have been presented, one being e-invoicing and the other is the available opportunity in future for removing the gap between the credit and the liability etc. to make it more convenient for the tax payers to file their returns and at the same time to prevent fake billing. 8.23 The Secretary requested the Council to approve the timelines as suggested and also invited the Hon’ble members of the Council for comments, if any to make their interventions. Decision: The GST Council i. Took note of the developments related to ITC Reclaim ledger, RCM ledger, IMS and FORM GSTR-1A. ii.Approved the timelines of opportunity given for declaration of opening balance (till 31.10.24) and amendment thereof (by 30.11.2024) in ITC re- claim ledger and RCM ledger. iii.Authorised the Law Committee to recommend any revision in time lines and any other supplementary decision needed for the roll-out of these functionalities if necessary. Agenda Item 8: The Secretary requested the Joint Secretary (TPRU), DoR to present the agenda items pertaining to Department of Revenue (DoR) consisting of five sub-items viz., review of revenue position, status update on Compensation Cess, IGST settlement, GSTAT and sharing of data. Agenda Item 8(a): Review of revenue position under Goods and Service Tax 9.1 Joint Secretary (TPRU), DoR presented the agenda and stated that it lists out the revenue for the last eight months and brought out that a good growth rate was seen in the GST collections for the past eight months. He informed that revenue has grown more than 10% in most of the months except for the month of June, 2024 when there was a minor dip. He further stated that the Special Drive against fake registration that was carried out between May-August, 2023 had yielded revenue in those months and that the ongoing Second drive on the fake registrations is also expected to yield good revenue in the coming months. He informed that the figures detailing revenue position with respect to States provide both pre-settlement and post settlement revenue of States. He mentioned that the average growth rate overall during April to August 2024 is 9% pre-settlement and 11% post settlement. He mentioned that States that are performing below the national average have may take steps to improve their performance. 9.2 The Secretary sought comments or interventions by the Hon’ble Members, if any. There being no observations, he requested the Joint Secretary (TPRU), DoR to present the next agenda on Compensation Cess. The Council took note of the revenue position under GST. Agenda Item 8(b): Status update on Compensation Cess 9.3 Introducing the agenda item relating to Status update on Compensation Cess, the Secretary mentioned that the GST Council in its 52nd Meeting had decided that a status update on Compensation Cess be presented before the Council, which is being done now. 9.4 JS (TPRU), DoR presented the agenda. He stated that the data shows the actuals of Compensation Cess collected upto August, 2024 and that a projection has been made for the period from September, 2024 to March, 2025 based on the assumption that there will be 10% annual growth over last year’s revenue. He presented the deductions that need to be made to this amount which includes compensation paid till August, 2024, back-to-back (B2B) loans, estimated compensation payable and interest projected on back-to-back loans. He informed that this shows a projected shortfall of approx. Rs. 1,31,000 crore in compensation account as on March, 2025. An amount of Rs.13,000 crore has been budgeted as the final compensation to States as some States have to give final AG figures. 9.5 He further stated that assuming that the revenue growth rate is 10% for 2025-26 then the surplus at the end of the year would be around Rs. 40,000 crores. He clarified that this calculation is only an estimate and that this can vary by a few thousand crores. This may roughly translate to 2.8 months of revenue in F.Y 2025-26. He stated that Compensation Cess therefore would need to be continued for sure till December, 2025 and may be some part of January, 2026 as well for enabling repayment of obligations under this account. A decision needs to be taken with respect to how the surplus of 2025-26 can be utilized. Further, a decision needs to be taken for the period beyond 2025-26 as to in what manner and form the Compensation Cess may be recharacterized. The matter was deliberated in the Officers’ Meeting and that there was general agreement that the responsibility can be entrusted to the Fitment Committee for further deliberations and make suitable recommendations on how to restructure the Compensation Cess. 9.6 The Hon’ble Member from Kerala stated that the issue related to Compensation Cess requires a lot of study and deliberation. He mentioned that last year it was reported that the Compensation Cess levy would be completed by the current year but now it is informed that it needs to be extended for another year. He added that this might even require some amendment in the Act through Parliament and State legislature. He added that the issue is not restricted to levy of Compensation Cess but that the future of Compensation Cess needs to be looked into from the perspective of experience gained from the implementation of the GST. He further mentioned that the revenue neutral rate has come down from 15.5% to less than 12% and that in 2017 around 200 items were falling in the bracket of 28% but now the rate has come down for many such items. He added that they had conducted a study about the impact of reduction in GST rates and that it was found that the benefit in reduction of rates was not passed down to the end consumer. He emphasized that the issue of reduction of revenue neutral rate is a matter of serious concern to the States as the States are facing severe financial crunch. He mentioned that if 14% growth was there from year to year then the State of Kerala would have got about Rs. 15,000-16,000 crores this year. He suggested that a Group of Ministers (GoM) needs to be constituted to analyze the Compensation Cess as it has major implications. 9.7 The Secretary clarified that it was never communicated that the Compensation Cess will not require to be levied after the present financial year (F.Y). It was communicated even in the earlier meetings that it will be continued beyond this F.Y. 9.8 The Hon'ble Chairperson clarified that back-to-back loans were taken and the Compensation Cess period was extended based on previous calculations that the levy of Compensation Cess needs to be extended until March 2026. She added that what would have been indicated in one of the earlier meetings would be that maybe the B2B loans and the interest can be cleared before March, 2026. She further informed that the Council has already approved and authorised the collection of Compensation Cess until March, 2026 only to enable the repayment of B2B loans and the interest. She mentioned that the JS, TPRU (DoR) has now projected that the B2B loans and the interest can be hopefully repaid by December, 2025 or January, 2026. She clarified that the present discussion is about what needs to be done with respect to the cess collected post repayment of all obligations. She explained that Compensation Cess was originally collected to make compensation payments to States and that it was based on a protected revenue projection. Consequently, a decision needs to be made regarding whether the Cess should continue beyond March 2026. It was further clarified that if it is decided to extend the Cess, it will need to be rephrased by the Council, as it can no longer be called "Compensation Cess." She further mentioned that as per the provisions of law the Compensation Cess was to be levied only till 2022 but the period for levy was extended to March, 2026 by way of notification based on an opinion taken from the Attorney General of India. The Hon'ble Chairperson stated that the GST Council can decide as to whether the issue needs to be examined by the Fitment committee or by a Group of Ministers assisted by the Fitment Committee. 9.9 The Hon’ble Member from Karnataka expressed gratitude to the Chairperson for tabling the agenda and for providing a detailed status update on the Compensation Cess, including the current position and projections for the foreseeable near future. He stated that this provides better clarity towards what lies ahead for the future. He mentioned that he would like to present before the Council the present situation of his State and a few other States. He stated that they are bound by the decisions they have made in the past and he is only trying to highlight the situation which Karnataka and maybe a few other States are in and how to resolve the same. He stated that before introduction of GST Karnataka’s CAGR of own tax revenue was 13.7% for 5 years so, prior to GST the State was growing at 14%. He further stated that it has often been said 14% compensation was generous but the state’s growth was nearly the same. Karnataka’s contribution to overall GST has been good for the past years. He mentioned that two years ago the State’s contribution was 8.91% of the total GST and for the year 2023-24 the rate of contribution has gone upto 9.54% as ascertained from the publicly available data on GSTN. He remarked that the State’s contribution to total GST collection has gone up in the last few years. He added that when all India growth rate was 20.7% then the growth rate of Karnataka’s tax collection was 28% and for last year the national growth rate was 14.9% whereas Karnataka’s growth rate was 18.2%. He submitted that therefore, the growth rate of the State has been above the national growth rate in tax collection. 9.10 The Hon’ble Member from Karnataka mentioned that the States’ contribution to national GST collection has also gone up and that the State was growing at a faster rate than the national average. He added that when the actual revenue of the State is forecast against the protected revenue i.e., 14% then it is seen that the actual revenue of the State has gone down by about Rs. 20,000 crores in FY 2023-24. He added that on an average the revenue of the State has come down when compared to the pre-GST vis-à-vis post GST despite the fact that the average growth rate of the State and the State’s contribution to overall GST have been going up. He stated that if 14% growth rate was continuing then the State would have been getting Rs. 95,000 crores but at present the State is only getting about Rs. 71,000 crores. He then elaborated that the State has tried to analyse this trend by comparing the State’s revenue collection as against State’s GSDP and it was seen that the State revenue against GSDP has dropped by 1% whereas State’s collection against GSDP has remained same. He mentioned that the revenue accruing to the State against GSDP has dropped by 1% and that this has led to the conclusion that as GST is destination-based tax there is net outgo from the State. He mentioned that in 2022-23 the rate of SGST revenue grew by 27% but IGST revenue grew by 18% and therefore, the total revenue growth was about 22% and for the year 2023-24 the rate of SGST revenue grew by 18% and IGST revenue grew by 13% and therefore, the total revenue growth was about 16%. He added that for the present year at present the rate of SGST revenue is 12% and IGST revenue grew by 7% and therefore, the overall revenue growth is 9%. He remarked that it is observed that the State is getting less revenue despite the increase in collections. He further also clarified that this observation is not made against the principle of destination-based taxation under GST. He elaborated that the GST share of Karnataka in GSDP has also increased and that 2 years ago it was 4.8% it has gone up to 5.41% and this year it is at 5.81%. He remarked that the tax efficiency of the State is higher than the national average yet the net revenue accruing to the State is less in comparison. He mentioned that on account of destination principle a lot of revenue collected under IGST is going to other States. He also mentioned that another factor for this dip in revenue is that now as exports are zero rated a lot of refunds are happening whereas in the earlier VAT regime the CST collected was retained as there was no provision for refund or ITC and this used to result in increase in revenue. He mentioned that some of the larger producing States like Karnataka that do not have a large consumer base is ending up with a substantial loss. He suggested that the competent forum for addressing these issues would be the Finance Commission as they have the mandate to assess the fiscal needs and fiscal capacities of each State. He stated that based on this understanding this issue was taken up by the State with the Finance Commission when they visited Karnataka, but the response received from the Finance Commission was that this is a GST related issue, and that the solution lies with the GST Council. He further mentioned that post of the expiry of compensation period it is seen that the loss of revenue for Karnataka is 0.6% - 0.7% of GSDP. He added that Karnataka being a producer State has invested heavily on infrastructure- physical, social and human and most of these require periodic servicing for their maintenance. He then mentioned that the State plays a significant role in job creation and boosting export yet is incurring long term loss of revenue. He suggested that while discussing the future of Compensation Cess, these challenges faced by the State can also be taken up for consideration. Further, he proposed that a Group of Ministers, rather than the Fitment Committee, would be better suited to handle these issues, as the Committee might find them beyond its scope. 9.11 The Hon’ble Member from Telangana said that as can be seen from the figures presented the revenue realised by the end of 2025-26 will exceed the amount required to discharge the loan amount and he submitted that such amount may be brought in the ambit of SGST equal to the Cess for the year 2025-26. He added that this will help the States to augment the revenue for meeting the developmental obligations. He also added that this would be a fair distribution as Cess was brought to augment the revenue of the States. He submitted that the matter may please be referred to GoM to study it in detail and give their recommendations. 9.12 The Hon’ble Member from Punjab submitted that they agreed with the concerns expressed by Karnataka and Kerala and stated that their state’s revenue was also affected by implementation of GST. He added that the revenue of Punjab has come down by Rs. 20,000 crores post GST when compared with the pre-GST revenue figures. He added that in view of this the issue of Compensation Cess may be examined in detail and it may be considered for extension as it will help augment the revenue of the States. 9.13 The Secretary stated that the growth rate of GST for the country post implementation of GST has been high vis-à-vis the growth rate of taxes that got subsumed in the GST. He also mentioned that the data has been presented before the Parliament and was also made available in public domain. He added that the Centre is yet to do a State wise analysis of revenue and therefore, State specific data is not available, but if required, such a study can be undertaken. He also stated that any tax that is imposed and collected after end of compensation cess, will have to be distributed among the States as per accepted principles i.e. destination based taxation. He stated that a decision needs to be taken as to the form in which it will be continued i.e. whether it is to be levied as a cess or as a higher rate of tax and this would also necessitate legislative changes. He stated that the Council can take a decision as to whether the issue needs to be looked into by the Fitment Committee or a GoM. 9.14 The Hon’ble Member from Uttar Pradesh remarked that the GST was rolled out with the consensus of all the Members of the Council. He stated that it is a matter of pride that a larger producing State like Karnataka is making great contribution to the country through its innovations but the financial situation of the State, as presented by its Member could be attributable to many factors and not just the implementation of GST. He added that the State needs to analyse the situation from an overall perspective to get a better picture. 9.15 The Hon’ble Chairperson stated that the entire data provided by Karnataka can be looked into for better understanding and she also added that if any other State so desires, they can also provide the data for analysis. She mentioned that the observations made by the Hon’ble Member from Karnataka did not account for the element of Covid and that the elements of Covid need to be included in the analysis otherwise it will yield only a partial picture. She added that the if GDSP calculation for past 5 years is being done without making provisions for the impact of Covid then it would be unfair to the efforts put in by the GST Council. She added that the GST Council is a constitutional body and is entrusted with the power to take all decisions in relation to GST. The only point where issues related to GST can be conflated to Finance Commission is when a decision needs to be taken with respect to devolution of the same. It is at this point that the Finance Commission comes in and provides the formula for devolution of taxes between Centre and State. She also added that the percentage share allocation to the States is not limited to indirect tax but also includes income tax excluding cess and surcharge. 9.16 The Hon’ble Chairperson mentioned that at the time of launch of GST an Empowered Committee of Ministers headed by a Finance Minister from an opposition party (to the party in power in Centre) was formed to decide whether the GST should be a consumption based tax or origin based tax. She also added that at that time apprehensions were raised by the manufacturing States and that these were considered. She further stated that she agreed with the Hon’ble Member from Karnataka that the matter will require political inputs and therefore, a GoM can be formed to look into the issue. She also added that the Centre need to be represented in the GoM and that Minister of State (Finance) can be the representative of the Centre in the proposed GoM. The GoM can look into all the data and analyse the situation post 2017 to ascertain the number of States that have grown post GST. She added that the huge disruptions that occurred on account of Covid cannot be ignored while calculating the average. She stated that the pre-GST growth rate for the years 2012-13 to 2015-16 was 8.3%, GDP growth rate was 11.5% and the tax buoyancy for the period was 0.72. For the period 2018-19 to 2022-23 the GST growth rate is 12.3%, GDP growth rate is 9.8% and the tax buoyancy is 1.25. She clarified that this growth rate was marked by disruptions on account of covid. She added that the Council is to be guided by facts and data, and this alone will help the Council in taking a considered view. She suggested that as extended period for levy of compensation cess is coming to an end the Council can consider forming a GoM and Members are welcome to join the GoM. Each State can provide its data which will be studied. She added that this would enable the Council to take a decision on the way forward when the extended period for levy of compensation cess comes to an end by March, 2026. 9.17 The Hon’ble Member from Karnataka welcomed and agreed with the proposal made by the Hon’ble Chairperson to form a GoM to look into the issue related to compensation cess. He further clarified that as a Member of the initial GST Council meetings he was part of the detailed deliberations in the Council as to the impact of GST but despite the challenges the proposal was agreed to in the larger interest of the nation. He further clarified that the statements and data provided by him are against the GSDP and that GSDP factors in the ups and downs of the economy. He stated that the GSDP is inclusive of the effect of Covid and that they are mindful of the impact caused by Covid. He further clarified that what the State wanted to impress on the Finance Commission was that GST has had an impact on the fiscal situation of the State and they wanted the Finance commission to take note of this effect on the State’s fiscal capacity. He again submitted that Karnataka’s GSDP growth rate for 2021-22 was 20.5% as against the national growth rate of 18.4% and for the year 2023-24 Karnataka’s growth rate was 10.2% as against national growth rate of 8.9%. He also provided the figures with respect to GST collections and submitted that for 2021-22 Karnataka’s growth rate was 27% as against the national growth rate of 27%. For the year 2022-23 Karnataka’s growth rate was 28% as against the national growth rate of 21% and for the current year Karnataka’s growth rate is 18% as against the national growth rate of 15%. He submitted that it can be seen from the figures that Karnataka has been consistently generating revenue and expanding the economy. He also submitted that Karnataka’s contribution to national GST collection has also been rising and that for the year 2021-22 Karnataka’s contribution to total GST collection was 8.74% and in 2023-24 this has increased to 9.5%. He reiterated that the State stands by the decisions taken in the Council and that the request is that the Council should consider these challenges while arriving at a considered decision on Compensation Cess. He submitted that the future of Compensation Cess be discussed having regard to the interest of States that have incurred revenue loss in long term and also added that these States can be identified from the data set. 9.18 The Secretary stated that the state of Karnataka has been doing well on GST as can be seen from its growth rate vis-à-vis the national average. He stated that GST is collected where the goods are manufactured but it gets transferred to the States where it is consumed and therefore, the producing and consumer States share a symbiotic relation. He clarified that GST is a destination-based tax and the natural corollary of it is that the tax goes to the consuming States. He added that the State of Karnataka has also gained on employment and other taxes such as property taxes which are collected in the State. 9.19 The Hon’ble Member from Karnataka reiterated the State’s commitment to destination-based tax but added that their only submission is that their SOTR has dropped by around 0.7% as against the GSDP. He submitted that the State is proud that they are contributing to the nation building as a producing State but their only request is that the difficulties faced by the State may be taken into consideration while discussing the future of Compensation Cess. 9.20 The Hon’ble Chairperson mentioned that the concern expressed by Karnataka has been taken note of and that if other large producing States like Maharashtra and Haryana were present, they might have also shared these concerns. She added that once the GoM is formed there can be in-depth discussion on this issue. 9.21 The Secretary stated that there is consensus among the Members for constituting a GoM on Compensation Cess with Minister of Finance (State) as the Convenor and he added that the composition of the GoM can be decided by the Hon’ble Chairperson as has been the practice with respect to other GoMs. Decision: The GST Council approved the constitution of a GoM on restructuring Compensation Cess with Minister of Finance (State) as the Convenor and other Members as decided by the Hon’ble Chairperson of the GST Council. Agenda Item 8(c): IGST Settlement 9.22 The Secretary requested the Joint Secretary (TPRU), DoR to present the agenda item relating to IGST settlement. 9.23 JS (TPRU), DoR stated that the negative balance in IGST account was discussed in the last Council meeting. He informed the Council that the negative balance in IGST account was Rs. 5,516 crores for the last Financial Year. In the current financial year negative balance was reported in IGST account in all months except for the months of June and August 2024. The cumulative negative balance in the IGST account is Rs. 14,218 crores. He stated that historically the practice was to apportion the positive balance between the Centre and the States in 50:50 ratio and also to recover whenever there was negative in the same ratio. He further mentioned that the positive balance was further apportioned to the states in the ratio of their subsumed revenue in the base year (FY 2015-16) and the negative balance was apportioned in the ratio of the respective month’s IGST settlement. He stated that as the matter is being looked into afresh it is felt that the ratio should reflect the dynamics that have changed over the years. He added that the base year 2015-16 has lost its relevance and that the ratio needs to be relooked. He stated that there is a need to revise the method of apportionment and proposed that the actual IGST settlement ratio may be considered for apportionment of both positive and negative balance among the States. He further submitted that to bring an element of stability it is suggested that the last 3 years average IGST settlement be looked into. He also submitted that the negative balance of Rs. 14,218 crore is proposed to be shared between the Centre and the States. He further clarified that the negative balance of Rs. 7,109 crores will not be recovered in one step but is proposed to be recovered over 4 months starting from September 2024. He further mentioned that the positive or negative balance, if any in the month of September, 2024 would be apportioned in the month of October, 2024 and this practice will continue for the remaining months except for March, 2025. He stated that for March, 2025 the apportionment of positive or negative balance will have to be made in that month itself. He also added that this proposal will continue to apply for the future months. He further submitted that as directed by the Hon’ble Chairperson in the last Council meeting DoR conducted a meeting with all States to explain the method of apportionment of IGST but there are still some unresolved issues. He informed the Council that this was discussed in the Officers’ meeting and it was proposed that a Committee of Officers under the Chairmanship of Additional Secretary, DoR will look into these issues and in case any legislative changes are required, then the same can be referred to the Law Committee. 9.24 The Hon’ble Member from Uttar Pradesh stated that their only suggestion is that the formula used for apportionment of positive balance may also be used for the apportionment of negative balance and added that in the absence of this, the State of Uttar Pradesh will incur loss of revenue. He added that that it was earlier agreed that the positive balance would be apportioned to the State at 8.3% and therefore, he submitted that the recovery of negative balance can also be made at the same rate. 9.25 The Hon’ble Member from Punjab stated there is no clarity with respect to the exact reason for the negative balance in revenue and he added that there is also no data on its impact on the States. He therefore proposed that either a GoM or a Committee of officers be made to look into these issues and that this exercise needs to be done prior to initiating the process of recovery. He added that the Committee can consist of officials of both Centre and State and they can analyse the complete data and find out the cause for the shortfall. 9.26 The Hon’ble Member from Bihar stated that their suggestion is similar to that made by the Hon’ble Member from Uttar Pradesh i.e. the formula used for apportionment of positive balance may also be used for the apportionment of negative balance. 9.27 The Hon’ble Member from West Bengal stated that the new formula proposed for apportionment needs to be studied in detail and she added that this will have revenue implications for importing States like West Bengal. She added that they agree with the proposal made by Hon’ble Member from Punjab that a Committee of Officers be formed to look into this issue. She also mentioned that another aspect they would like to bring to the notice of the Council is that excess advance settlement made up to June, 2022 has reduced the amount of compensation received by the State. She added that the recovery of negative balance would reduce the revenue of the State and therefore, it was proposed that the States may be compensated to the extent of compensation that was less received. 9.28 The Hon’ble Member from Telangana stated that for earlier periods the IGST settlement was done at 4.03% based on the revenue figures of 2015-16 and that now the present proposal is to make the recovery at 5.07%. He therefore submitted that the same formula used for apportionment of positive balance may also be used for the apportionment of negative balance. He further stated that the matter needs to be examined in detail and therefore, the proposal is that the matter may be referred to a Committee of Officers. 9.29 The Hon’ble Member from Kerala stated that previously also the State has raised apprehensions about the settlement of IGST and he added that the negative balance in the IGST account shows that there are systemic issues in the IGST settlement. He stated that the reason for these issues need to be identified and analysed on priority. He mentioned that Kerala being a consumer State is affected by incorrect return filing and other issues in supply rules and that this is resulting in short settlement. He stated that proposal to make recovery of the negative balance should be held in abeyance until these pending issues are resolved. 9.30 The Secretary stated that in the Officers’ meeting there was general agreement with respect to the formula that is to be used prospectively. He further mentioned that the issue raised by Uttar Pradesh and Telangana is that the apportionment of positive and negative balances are made at different ratios and he stated that this issue has been addressed in the revised methodology proposed by JS (TPRU), DOR. He mentioned that the Committee under the Chairmanship of Additional Secretary, DoR can look into these issues related to the past but going forward from 01.04.2024 the proposed new formula can be used for apportionment of positive and negative balances. 9.31 The officer from Tamil Nadu stated that in the Officers’ Meeting they had requested that Committee under the Chairmanship of Additional Secretary, DoR can look into these issues. He added that they have identified certain forms/statements where information is not made available and that once this information is made available they are hopeful of cleaning up the future process wherein they will be able to attribute positive/negative balance in IGST to a particular State. They further requested that the proposal for recovery of negative balance may please be kept in abeyance till such time. 9.32 The Hon’ble Chairperson mentioned that a Committee of Officers can be constituted for considering both the past recovery related issues and the future apportionment. She added that the negative balance is already showing on the Centre’s balance and that this has put the system in a limbo. She invited the Members to be part of the Committee of Officers and suggested that they can work out a solution in one months’ time i.e. by the end of October, 2024. She stated that the report can be placed before the GST Council in its next meeting scheduled for November, 2024. 9.33 The Hon’ble Member from Karnataka requested that provision may please be made for an online tutorial on IGST settlement for the Members for their own better understanding of the process and that the participation can be made on voluntary basis. The Hon’ble Chairperson agreed to the request and requested the Secretary to do the needful. Decision: The GST Council approved the constitution of a Committee of Officers under the chairmanship of Additional Secretary, Department of Revenue for looking into issues in IGST settlement and recommend ways to improve the settlement process including legislative amendments, system changes and the formula for apportionment of positive and negative balance in IGST account. The Committee of Officers to finalize the report by end of October, 2024 and present it in the next GST Council meeting. Agenda Item 8 (d): GST Appellate Tribunal - Issues for approval 9.34 The Secretary took up the agenda item relating to the GST Appellate Tribunal and requested the Joint Secretary (TPRU), DoR to present the agenda. Joint Secretary (TPRU), DoR presented the Agenda to the Council. He mentioned that the Finance (No. 2) Act, 2024, notified on August 16, 2024, introduced several amendments to the CGST Act, 2017, including changes to sections 109 and 171. These amendments involve granting the Principal Bench of GSTAT the authority to examine anti-profiteering measures under GST. He sought the GST Council's approval to notify the provisions of sections 109 and 171 of the CGST Act, with immediate effect. He informed the Council that following this, a formal notification will be issued to assign anti-profiteering matters to the Principal Bench at the earliest by 1st of October 2024. He added that the notification for the said has already been approved by the GST Council in its earlier meeting. 9.35 JS (TPRU), DoR further informed that certain changes have been requested by the States i.e. Kerala, Uttar Pradesh and Punjab in respect of location of the State Bench of GSTAT and that these changes have been incorporated in the draft notification as circulated in the agenda note. Joint Secretary further informed that the jurisdiction for each of the State Benches is required to be notified and that a draft has been circulated along with the agenda note and since then updates from Gujarat, Tamil Nadu, and Haryana have also been received regarding their updated jurisdictions. He informed that these updates will be incorporated, though there are still some minor corrections being discussed with the states. He informed the Council that five days have been given to the States for communicating any corrections in the names of the districts to be updated in the notification. He further requested that going forward the Council may empower the GST Implementation Committee (GIC) to handle jurisdiction- related issues, as they may arise frequently, and this empowerment would allow for timely decisions without needing to wait for the Council meetings. Decision: GST Council approved the draft notification as presented in the agenda regarding the location of State Benches of GSTAT and their jurisdiction and permitted DoR to make corrections in the names of the districts as may be communicated by the States within 5 days. The Council further delegated to the GST Implementation Committee to decide on issues related to jurisdiction, upon request of the States. The same may be brought to Council for information and post-facto ratification. Agenda Item 8 (e): Sharing of personally Identifiable Information of Taxpayers with other Ministries/Departments. 9.36 Joint Secretary (TPRU), DoR informed that several requests have been received from various agencies and ministries to share specific information containing personally identifiable data. He informed the Council that these requests were discussed in the GST Implementation Committee (GIC), but a decision could not be made and as a result, the matter was brought before the GST Council. He further stated that during the officers' meeting, there was consensus that these requests could be approved. He further informed that there are additional data-sharing requests from states like Tamil Nadu and proposed that the GST Implementation Committee (GIC) be authorized to approve these requests on a case-by-case basis, adhering to the safeguards as detailed in the agenda note. He informed that the current requests are from the Ministry of Labour and Employment, Gujarat Infrastructure Development Board (GIDB), National Industrial Corridor Development Corporation Limited (NICDC), Directorate General of Commercial Intelligence & Statistics, Ministry of Commerce & Industry, and the IMF project on GST Rate Sensitivity. He recommended to the Council that these requests be approved considering that the purpose of these requests would fall within the exceptions carved out in section 158(3) of the CGST Act. Decision: The GST Council approved the data sharing agenda as presented and going forward empowered GIC to approve other similar requests on a case-by-case basis adhering to the safeguards detailed in the agenda note. Agenda Item 9: Ad-hoc Exemptions Orders issued under Section 25(2) of the Customs Act, 1962 to be placed before the GST Council for information The Secretary informed the Council that two Ad-hoc exemption orders had been issued since last meeting of the GST Council. The First Order No. 4 of 2024 dated 27/06/2024 pertained to exemption from Customs duty on import of reading eye glasses by M/s Supreme Task India donated by Restoring Vision, USA and the second Order No. 05 of 2024 dated 23/07/2024 was regarding exemption from Customs duty on re-importation of one unit of Liebherr Heavy Lift Crawler Crane (Model: LR 1350/1, Sl. No. 074113) by Bharat Heavy Electricals Limited (BHEL). He stated that the two orders were placed before the Council for information. The Council took note of the ad-hoc exemption orders issued. 10. The Secretary then thanked the Hon’ble Chairperson, Hon’ble Members of the Council and the participating officers for their discussion on the agenda for the meeting and the decisions taken. Annexure-1 List of Hon'ble Ministers from States/UTs who participated in the 54th Meeting of the GST Council held on 09th September, 2024 S. No. Name of Centre/States/UTs Name of Hon'ble Ministers/Member of GST Council Charge 1 GOI Smt. Nirmala Sitharaman Union Finance Minister 2 GOI Sh. Pankaj Chaudhary Minister of State for Finance 3 Andhra Pradesh Sh. Payyavula Keshav Minister for Finance, Planning, Commercial Taxes and Legislative affairs 4 Arunachal Pradesh Sh. Chowna Mein Deputy Chief Minister/Minister of Finance 5 Assam Smt. Ajanta Neog Finance Minister 6 Bihar Sh. Samrat Choudhary Deputy Chief Minister 7 Chattisgarh Sh. O.P. Choudhary Minister of Finance and Commercial Tax 8 Delhi Ms. Atishi Marlena Minister for Finance 9 Goa Dr. Pramod P. Sawant Chief Minister/Finance Minister 10 Gujarat Sh. Kanubhai Desai Minister for Finance 11 Jammu & Kashmir Sh. R.R.Bhatnagar Advisor to Hon’ble Lieutenant Governor 12 Karnataka Sh. Krishna Byre Gowda Minister for Revenue Department 13 Kerala Sh. K. N. Balagopal Minister for Finance 14 Madhya Pradesh Sh. Jagdish Devda Deputy Chief Minister/Minister of Commercial Tax & Finance 15 Maharashtra Smt. Aditi Tatkare Minister for Women and child development 16 Meghalaya Sh. Conrad K. Sangma Chief Minister 17 Mizoram Dr. Vanlalthlana Minister Taxation Department 18 Nagaland Sh. K. G. Kenye Minister for Power and Parliament Affairs 19 Punjab Sh. Harpal Singh Cheema Finance Minister 20 Rajasthan Sh. Gajendra Singh Minister of Medical Health and Services (ESI) 21 Sikkim Sh. G. T. Dhungel Minister for Health & Family Welfare and Culture Department 22 Telangana Sh. Mallu Bhatti Vikramarka Deputy Chief Minister and Minister for Finance 23 Uttar Pradesh Sh. Suresh Kumar Khanna Minister of Finance, Parliamentary Affairs 24 Uttrakhand Sh. Premchand Aggarwal Finance Minister 25 West Bengal Smt. Chandrima Bhattacharya Finance Minister Annexure – 2 List of Officers from Centre and the States/UTs who participated in the 54th Meeting of the GST Council held on 09th September, 2024 S.No. Name of CBIC/State/GSTC/GOI/GSTN/DoR/TRU/Policy Wing/Directorates Name of Officers Designation 1 DoR Sh. Sanjay Malhotra Revenue Secretary 2 CBIC Sh. Sanjay Kumar Agarwal Chairman CBIC 3 CBIC Sh. Rajiv Talwar Member (Compliance Management) 4 CBIC Sh. Shashank Priya Member (GST) 5 CBIC Sh. Vivek Ranjan Member (Tax Policy and Legal) 6 DoR Sh. Vivek Aggarwal Additional Secretary, Revenue 7 DGGI Sh. Anil Kumar Gupta Pr. Director General 8 DGGST Ms. Seema Arora Pr. Director General 9 DG Systems Sh. Yogendra Garg Pr. Director General 10 GST Policy Wing Sh. Sanjay Mangal Principal Commissioner 11 DoR Sh. Naval Kishore Ram Joint Secretary, Revenue 12 DoR Sh. Balasubramanian Krishnamurthy Joint Secretary, TPRU 13 GST Council Secretariat Sh. Pankaj Kumar Singh Additional Secretary (GST Council Secretariat) 14 GSTN Sh. Manish Kumar Sinha CEO 15 TRU Ms. Limatula Yaden JS, TRU - I 16 TRU Sh. Sachin Jain JS, TRU - II 17 DGGI Sh. Rajesh Jindal Director General 18 DGGI Sh. Ataur Rahman Additional Director General 19 GST Council Secretariat Ms. B. Sumidaa Devi Joint Secretary 20 DG Systems Sh. Rewat Bahl Additional Director General 21 GSTN Sh. Pramod Kumar EVP, BIPA 22 GSTN Sh. Alok Kumar EVP, Services 23 GST Policy Wing Sh. Gaurav Singh Commissioner 24 GST Policy Wing Sh. Raghavendra Pal Singh Additional Commissioner 25 GST Policy Wing Dr. Gurbaz Sandhu Additional Commissioner 26 GST Policy Wing Ms. Kangale Shrunkhala Motiram Additional Commissioner 27 TRU Dr. Puneeta Bedi Director, TRU - II 28 TRU Sh. Rakesh Dahiya Director, TRU - I 29 GST Council Secretariat Ms. Shaifali G. Singh Director 30 TRU Ms. Amreeta Titus DS, TRU - I 31 TRU Sh. Satvik Dev DS, TRU - II 32 DGGST Sh. T. Manjunath Additional Director 33 GST Policy Wing Sh. Nitesh Gupta Deputy Commissioner 34 GST Policy Wing Ms. Soumya Deputy Commissioner 35 GST Policy Wing Ms. Saumya Gupta Deputy Commissioner 36 DoR Sh. Vikash Kumar Deputy Secretary 37 DoR Sh. Sunil Kumar Under Secretary 38 DoR Sh. Vijay Singh Section Officer 39 DoR Sh. Deepak Bansal Assistant Section Officer 40 DoR Sh. Muthuraman C Under Secretary 41 DoR Sh. Dinesh Kumar Meena Section Officer 42 Government of India Sh. S.S. Nakul PS to FM 43 Government of India Sh. Anirudh S. Pulipaka PS to FM 44 Government of India Sh. Ankit Jalan Additional PS 45 Government of India Sh. B. N. Bhaskar Additional PS 46 Government of India Sh. Sernya Bhutia Assistant PS 47 Government of India Sh. Rishirendra Kumar PS to MoS 48 Government of India Sh. Alkesh Uttam OSD to MoS 49 DoR Deepak Kapoor OSD to Revenue Secretary 50 CBIC Shri. Aditya Bhardwaj OSD to Chairman 51 GSTN Sh. Naveen Agrawal OSD to CEO, GSTN 52 GST Council Secretariat Sh. Anil Kumar Deputy Secretary 53 GST Council Secretariat Ms. Reshma R Kurup Under Secretary 54 GST Council Secretariat Sh. Sridhar Das Under Secretary 55 GST Council Secretariat Ms. P. R. Reshmi Under Secretary 56 GST Council Secretariat Sh. Anil Kumar Moria Under Secretary 57 GST Council Secretariat Sh. Vineet Kumar Superintendent 58 GST Council Secretariat Ms. Sonia Superintendent 59 GST Council Secretariat Sh. Mohan Lal Superintendent 60 GST Council Secretariat Ms. Ambika Rani Superintendent 61 GST Council Secretariat Sh. Niranjan Kishore Superintendent 62 GST Council Secretariat Sh. Om Ram Meena Section Officer 63 GST Council Secretariat Sh. Sandeep Kumar Superintendent 64 GST Council Secretariat Sh. Khupmang Neihsial Superintendent 65 GST Council Secretariat Sh. Himanshu Bhardwaj Superintendent 66 GST Council Secretariat Sh. Pankaj Kumar Singh Superintendent 67 GST Council Secretariat Sh. Sudhir Kumar Section Officer 68 GST Council Secretariat Sh. Ashwani Sharma Section Officer 69 TRU Ms. Smita Roy TO, TRU - II 70 TRU Sh. Dilmil Singh Soach OSD , TRU - II 71 TRU Sh. Wanere Vikram Vijay Under Secretary, TRU - I 72 TRU Ms. Anna Sosa Thomas TO, TRU - II 73 TRU Sh. Ananya Kumar Singh TO, TRU - I 74 TRU Sh. Stanzin Wangyal TO, TRU - II 75 TRU Sh. Dheeraj Sharma TO, TRU - I 76 TRU Sh. Ashok Inspector 77 PIB Ms. Nanu Bhasin ADG (M&C) 78 PIB Sh. Kush Mohan Nahar Media and Communication Officer 79 GST Council Secretariat Sh. Anand Singh Inspector 80 GST Council Secretariat Sh. Karan Arora Assistant Section Officer 81 GST Council Secretariat Ms. Neha Jainwal E. A. 82 GST Council Secretariat Sh. Manish Gupta E. A. 83 GST Council Secretariat Sh. Rantej Singh T. A. 84 GST Council Secretariat Sh. Satbir Sah T. A. 85 Andhra Pradesh Sh. Peeyush Kumar Principal Secretary, Finance (CT) 86 Andhra Pradesh Sh. K. Ravi Sankar Commissioner (ST), Policy 87 Andhra Pradesh Sh. S.Sekhar Addl. Commissioner(ST)/Oo CCST 88 Andhra Pradesh Sh. M. Jayakrishna OSD To Hon’ble Minister for Finance, Planning, Commercial Taxes and Legislative affairs 89 Arunachal Pradesh Sh. Lobsang Tsering Commissioner, Tax & Excise 90 Arunachal Pradesh Sh. Nakut Padung Superintendent of State Tax 91 Assam Sh. Jayant Narlikar Commissioner & Secretary, Finance Department 92 Assam Sh. Pallav Gopal Jha Principal Commissioner of State Tax 93 Assam Sh. Jitu Doley Secretary, Finance Department 94 Assam Md. Shakeel Saadullah Special Commissioner of State Tax 95 Assam Sh. Bedabrata Saikia Superintendent of State Tax 96 Bihar Dr. Pratima Commissioner- cum-Secretary Commercial Taxes 97 Bihar Sh. Krishna Kumar Joint Secretary Commercial Taxes 98 Bihar Sh. Binod Kumar Jha Additional Commissioner State Tax 99 Bihar Sh. Ranjeet Kumar OSD Commercial Taxes 100 Chandigarh Sh. Rupesh Kumar Excise & Taxation Commissioner 101 Chandigarh Sh. Harpreet Singh Assistant Excise & Taxation Commissioner 102 Chandigarh Sh. Pradeep Kumar Excise & Taxation Officer 103 Chattisgarh Sh. Mukesh Bansal Secretary, Finance and Commercial Tax 104 Chattisgarh Sh. Pushpendra Kumar Meena Commissioner, State Tax 105 Delhi Ms. Chanchal Yadav Commissioner (State Tax) 106 Delhi Sh. Ajay Kumar Bisht Special Commissioner (State Tax) 107 Delhi Sh. Karanjit Vadodaria Additional Commissioner (State Tax) 108 Goa Sh. Tusharkumar Joshi OSD to CM 109 Goa Sh. S.S.Gill Commissioner of State Tax 110 Goa Sh. Vishant S.N.Gaunekar Additional Commissioner of State Tax-I 111 Goa Sh. Ashutosh APS to CM 112 Gujarat Sh. Dr. T. Natarajan, IAS Principal Secretary, Finance Department, Government of Gujarat 113 Gujarat Sh. Rajeev Topno, IAS Chief Commissioner of State Tax 114 Gujarat Sh. K. D. Shukla Joint Commissioner, Commercial Taxes 115 Haryana Devender Kalyan Principal Secretary, Excise and Taxation Department 116 Haryana Sh. Ashok Kumar Meena Excise & Taxation Commissioner-cum-Secretary 117 Haryana Dr. Hemant Kumar Additional Commissioner, GST, Excise and taxation Department 118 Haryana Sh. Harsh Singh Additional Commissioner, TRU, Excise and taxation Department 119 Himachal Pradesh Dr. Yunus Commissioner of State Tax & Excise 120 Himachal Pradesh Sh. Rakesh Sharma Additional Commissioner of State Tax & Excise 121 Jammu & Kashmir Sh. Santosh. D.Vaidya Principal Secretary to Government 122 Jammu & Kashmir Sh. P.K.Bhat Commissioner 123 Jammu & Kashmir Sh. Shakeel Maqbool Additional Commissioner 124 Jharkhand Sh. Amitabh Kaushal Secretary, Commercial Taxes 125 Jharkhand Sh. Ameet Kumar Commissioner of Commercial Taxes 126 Jharkhand Sh. Brajesh Kumar Assistant Commissioner of State Taxes 127 Karnataka Ms. C.Shikha Commissioner of Commercial Tax 128 Karnataka Dr. Ravi Prasad Additional Commissioner of Commercial Tax 129 Kerala Sh. Patil Ajit Bhagwatrao Commissioner of State Tax 130 Kerala Sh. Abraham Renn S Special Commissioner, State GST 131 Kerala Dr. Shyjan D Private Secretary to Hon'ble Minister for Finance 132 Kerala Sh.Sunilkumar V Deputy Commissioner (Policy Division) 133 Kerala Smt.Shobha T.C State Tax Officer (Policy Division) 134 Kerala Sh. Rajeeshkumar C P Deputy State Tax Officer (Policy Division) 135 Madhya Pradesh Sh. Dhanaraju S Commissioner, State Tax 136 Madhya Pradesh Sh. Manoj Kumar Choubey Additional Commissioner, State Tax 137 Madhya Pradesh Sh. Dilip Raj Dwivedi Special Assistant of Deputy CM 138 Maharashtra Sh. Asheesh Sharma Commissioner of State Tax 139 Maharashtra Smt. Shaila A Secretary to GOM Reforms 140 Maharashtra Sh. B M Gore Deputy Commissioner of State Tax 141 Maharashtra Sh. Pankaj Sharma Personal Assistant to Minister 142 Maharashtra Sh. Rahul Desai PA to Minister 143 Manipur Smt. Mercina R. Panmei Commissioner of Taxes 144 Manipur Sh Y. Indrakumar Singh Joint Commissioner of Taxes 145 Meghalaya Sh. Mukesh Kumar OSD to Chief Minister 146 Meghalaya Sh. Ramakrishna Chitturi Commissioner of State Tax 147 Meghalaya Sh. V. R. Challam Deputy Commissioner State Tax 148 Mizoram Sh. R. Zosiamliana Commissioner of State Tax 149 Mizoram Sh. H. K. Lalhawngliana Additional Commissioner of State Tax 150 Nagaland Sh. Abhinav Shivam Commissioner of State Tax 151 Nagaland Sh. Y. Mhathung Murry Special Commissioner of State Tax 152 Odisha Ms. Yamini Sarangi Commissioner of Commercial Tax and GST 153 Odisha Sh. Rajat Kumar Pattnaik Special Commissioner, CT & GST 154 Odisha Sh. Nihar Ranjan Nayak Additonal Commissioner of Commercial Tax and GST 155 Puducherry Sh. L. Mohamed Mansoor Commissioner of State Tax 156 Puducherry Smt S. Rewathi Assistant Commissioner (A&I) of State Tax 157 Punjab Sh. Vikas Pratap Financial Commissioner (Taxation) 158 Punjab Sh. Varun Roojam Commissioner of State Tax 159 Punjab Smt Harsimrat Kaur Deputy Commissioner of State Tax 160 Punjab Smt Amritdeep Kaur State Tax Officer 161 Punjab Sh. Bharat Sharma State Tax Officer 162 Rajasthan Dr. Ravi Kumar Surpur Secretary Finance Revenue 163 Rajasthan Sh. Prakash Rajpurohit Chief Commissioner of State Tax 164 Rajasthan Sh. Arvind Mishra Advisor State Tax 165 Sikkim Sh. Pawan Awasthy Principal Director, Finance Department 166 Sikkim Sh. Manoj Rai Commissioner Commercial Taxes 167 Tamil Nadu Sh. Brajendra Navnit Principal Secretary 168 Tamil Nadu Dr.D. Jagannathan Commissioner of Commercial Taxes 169 Tamil Nadu Thiru S. Subash Chandra Bose Additional Commissioner (Policy & Public Relations) 170 Tamil Nadu Thiru.S.E. Prabhu Deputy Commissioner (Policy & Planning) 171 Tamil Nadu Sh. V. V. Ramkumar Assistant Commissioner 172 Telangana Sh. S.A.M Rizvi Principal Secretary to Government, Revenue (CT& Excise) & (I/C) Commissioner (CT) 173 Telangana Sh. N. Sai Kishore Additional Commissioner(ST) (Grade-I)Enforcement 174 Telangana Sh. K. Ravi Joint Commissioner (ST) Policy 175 Tripura Sh. Vivek H. B. Chief Commissioner of State Tax 176 Tripura Sh. Ashin Barman Assistant Commissioner of Taxes 177 Uttar Pradesh Sh. M Devaraj Principal Secretary to Govt of UP 178 Uttar Pradesh Dr. Nitin Bansal Commissioner, State Tax, U.P 179 Uttar Pradesh Sh. Paritosh Kumar Mishra Deputy Commissioner, State Tax HQ, Lucknow 180 Uttar Pradesh Sh. Amit Pandey PS to Honourable Minister 181 Uttarakhand Sh. Vinod Kumar Suman Secretary (Finance) 182 Uttarakhand Dr. Ahmed Iqbal Commissioner, State Tax 183 Uttarakhand Sh. B. S. Nagnyal Additional Commissioner 184 Uttarakhand Sh. Anurag Mishra Joint Commissioner, State Tax 185 Uttarakhand Sh. Ranjeet Singh Assistant Commissioner 186 West Bengal Sh. Prabhat Kumar Mishra Additional Chief Secretary 187 West Bengal Sh. Devi Prasad Karanam Commissioner, State Tax 188 West Bengal Sh. Rajib Sengupta Additional Commissioner, State Tax 189 West Bengal Sh. Shantanu Naha OSD to FM Annexure – 3 Agenda Item 2: Ratification of Notifications, Circulars and GIC Decisions by the GST Council In the 22nd meeting of the GST Council held at New Delhi on 6th October, 2017, it was decided that the notifications, circulars and orders, which are being issued by the Central Government with the approval of the competent authority, shall be forwarded to the GST Council Secretariat, through email, for information and ratification by the GST Council. Accordingly, in the 54th meeting held on 9th September, 2024, the GST Council had ratified all the notifications, circulars and orders issued up to 17.08.2024. 2. In this respect, the following notifications issued under the GST laws by the Central Government, as available on https://egazette.gov.in/ and circulars issued under the GST laws by the Central Government, as available on www.cbic.gov.in, after 17.08.2024 till 10.12.2024, are placed before the Council for information and ratification: - Act/Rules Type Notification / Circular / Order Nos. Description/Subject Notifications under CGST Act / CGST Rules Central Tax 1. Notification No. 17/2024-Central Tax dated 27.09.2024 Seeks to notify the provisions of Finance (No. 2) Act, 2024 2. Notification No. 18/2024-Central Tax dated 30.09.2024 Seeks to notify Principal Bench of GST Appellate Tribunal to hear cases of anti-profiteering 3. Notification No. 19/2024-Central Tax dated 30.09.2024 Notification under Section 171 of CGST Act to provide for the sunset date. 4. Notification No. 20/2024-Central Tax dated 08.10.2024 Seeks to make amendments (Second Amendment 2024) to the CGST Rules, 2017 5. Notification No. 21/2024-Central Tax dated 08.10.2024 Seeks to notify date under sub-section (1) of Section 128A of CGST Act. 6. Notification No. 22/2024-Central Tax dated 08.10.2024 Seeks to notify the special procedure under section 148 of the CGST Act for rectification of demand orders issued for contravention of section 16(4) of the said Act. 7. Notification No. 23/2024-Central Tax dated 08.10.2024 Seeks to provide waiver of late fee for late filing of NIL FORM GSTR-7 8. Notification No. 24/2024-Central Tax dated 09.10.2024 Seeks to amend Notification No. 5/2017-Central Tax dated 19.06.2017 9. Notification No. 25/2024-Central Tax dated 09.10.2024 Seeks to amend Notification No. 50/2018-Central Tax dated 13.09.2018 10. Notification No. 26/2024-Central Tax dated 18.11.2024 Extension of due date for filing of return in FORM GSTR-3B for the month of October, 2024 for the persons registered in the state of Maharashtra and Jharkhand 11. Notification No. 29/2024-Central Tax dated 27.11.2024 Seeks to extend the due date for furnishing FORM GSTR-3B for the month of October, 2024 for registered persons whose principal place of business is in the State of Manipur. 12. Notification No. 30/2024-Central Tax dated 10.12.2024 Seeks to extend the due date for furnishing FORM GSTR-3B for the month of October, 2024 for registered persons whose principal place of business is in the district of Murshidabad in the State of West Bengal. 13. Notification No. S.O. 5063(E) dated 26.11.2024 and Corrigendum dated 29.11.2024 Seeks to change the location of certain State Benches of the GSTAT and to notify the jurisdiction of each of the State Benches and their Additional Sittings Central Tax (Rate) 1. Notification No. 05/2024-Central Tax (Rate) dated 08.10.2024 Seeks to amend Notification No. 1/2017- Central Tax (Rate) dated 28.06.2017. 2. Notification No. 06/2024-Central Tax (Rate) dated 08.10.2024 Seeks to amend Notification No. 4/2017- Central Tax (Rate) dated 28.06.2017. 3. Notification No. 07/2024-Central Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 11/2017-Central Tax (Rate) dated 28.06.2017 4. Notification No. 08/2024-Central Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 12/2017-Central Tax (Rate) dated 28.06.2017 5. Notification No. 09/2024-Central Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 13/2017-Central Tax (Rate) dated 28.06.2017 Corrigendum dated 22.10.2024 to Notification No. 09/2024-Central Tax (Rate) dated 08.10.2024 To read “any immovable property” for “any property”, as mentioned in Notification No. 09/2024-CT(R) Notifications under IGST Act / IGST Rules Integrated Tax (Rate) 1. Notification No. 05/2024-Integrated Tax (Rate) dated 08.10.2024 Seeks to amend Notification No. 1/2017- Integrated Tax (Rate) dated 28.06.2017. 2. Notification No. 06/2024- Integrated Tax (Rate) dated 08.10.2024 Seeks to amend Notification No. 4/2017- Integrated Tax (Rate) dated 28.06.2017. 3. Notification No. 07/2024- Integrated Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 8/2017- Integrated Tax (Rate) dated 28.06.2017 4. Notification No. 08/2024- Integrated Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 9/2017- Integrated Tax (Rate) dated 28.06.2017 5. Notification No. 09/2024- Integrated Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 10/2017- Integrated Tax (Rate) dated 28.06.2017 Corrigendum dated 22.10.2024 to Notification No. 09/2024-Integrated Tax (Rate) dated 08.10.2024 To read "any immovable property" for "any property", as mentioned in Notification No. 09/2024-IT(R) Notifications under UTGST Act / UTGST Rules Union Territory Tax (Rate) 1. Notification No. 05/2024-Union Territory Tax (Rate) dated 08.10.2024 Seeks to amend Notification No. 1/2017- Union Territory Tax (Rate) dated 28.06.2017. 2. Notification No. 06/2024- Union Territory Tax (Rate) dated 08.10.2024 Seeks to amend Notification No. 4/2017- Union Territory Tax (Rate) dated 28.06.2017. 3. Notification No. 07/2024- Union Territory Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 11/2017- Union Territory Tax (Rate) dated 28.06.2017 4. Notification No. 08/2024- Union Territory Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 12/2017- Union Territory Tax (Rate) dated 28.06.2017 5. Notification No. 09/2024- Union Territory Tax (Rate) dated 08.10.2024 Seeks to amend Notification No 13/2017- Union Territory Tax (Rate) dated 28.06.2017 Corrigendum dated 22.10.2024 to Notification No. 09/2024- Union Territory Tax (Rate) dated 08.10.2024 To read "any immovable property" for "any property", as mentioned in Notification No. 09/2024-UT(R) Circulars under CGST Act 1. Circular No. 230/24/2024-GST dated 11.09.2024 Clarification in respect of advertising services provided to foreign clients. 2. Circular No. 231/25/2024-GST dated 11.09.2024 Clarification on availability of input tax credit in respect of demo vehicles. 3. Circular No. 232/26/2024-GST dated 11.09.2024 Clarification on place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India. 4. Circular No. 233/27/2024-GST dated 11.09.2024 Clarification regarding regularization of refund of IGST availed in contravention of rule 96(10) of CGST Rules, 2017, in cases where the exporters had imported certain inputs without payment of integrated taxes and compensation cess. 5. Circular No. 234/28/2024-GST dated 11.10.2024 Clarifications regarding applicability of GST on certain services. 6. Circular No. 235/29/2024-GST dated 11.10.2024 Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 54th meeting held on 9th September 2024 at New Delhi. 7. Circular No. 236/30/2024-GST dated 11.10.2024 Clarification regarding the scope of “as is / as is, where is basis” mentioned in the GST Circulars issued on the basis of recommendation of the GST Council in its meetings. 8. Circular No. 237/31/2024-GST dated 15.10.2024 & Corrigendum dated 25.10.2024 Clarifying the issues regarding implementation of provisions of sub-section (5) and sub-section (6) in section 16 of CGST Act, 2017. 9. Circular No. 238/32/2024-GST dated 15.10.2024 Clarification of various doubts related to Section 128A of the CGST Act, 2017. 3. It is mentioned that some of the above notifications were issued based on the recommendations made by the GST Implementation Committee (GIC). The details of the recommendations of GIC are enclosed as Annexure “A” to this Agenda Note. 4. The GST Council may grant ratification to the notifications and circulars as detailed in para 2 above. **** Annexure A Decisions of GST Implementation Committee (GIC) for information of the GST Council The GST implementation Committee (GIC) took the following decisions after the 54th GST Council meeting which are placed before the Council for information. The details of the decisions taken are given below: 1. Decision by circulation on 13.09.2024 regarding request received from Department of Posts for validation of GSTINs through API a. The agenda note stated that the Department of Posts has established over 1000 Dak Ghar Niyat Kendras (DNKs) nationwide to promote commercial exports and on the DNK customer portal, customer details including IEC, GSTIN, AD Code and LUT etc. are being captured with facilities for document upload and online generation of Postal Bill of Export. The agenda further states that the Department of Posts and the Central Board of Indirect Taxes and Customs (CBIC) are collaborating to integrate the Dak Ghar Niryat Kendra portal with the Customs system to facilitate IGST refunds and other export- related benefits. It was further noted that processing failures have been observed due to the use of invalid GSTINs, highlighting the critical need for GSTIN validation to ensure accurate IGST refunds. Therefore, the Department of Posts has requested access to the GST API for the purpose of GSTIN validation. b. Accordingly, approval of the GIC was sought for allowing the Department of Posts to use API for the purpose of GSTN validation. c. Decision: The GIC approved the agenda relating to request received from Department of Posts for validation of GSTINs through API. 2. Decision by circulation on 29.10.2024 regarding GST data sharing request received from DPIIT- Logistics Division, Ministry of Commerce and Industry a. The agenda note stated that a request had been received from the DPIIT- Logistics Division, Ministry of Commerce and Industry, for the sharing of aggregated GST and e-Way bill data. It was further noted that the aggregated data is required to estimate logistics costs in the country under the National Logistics Policy. Additionally, the e-Way bill data would be used to identify routes for surveys and to develop a sampling plan. The data items that need to be aggregated include monthly data based on HSN codes and PIN codes for dispatch and delivery locations. The specific data fields required for aggregation were: Month, HSN Code (4 digits), Taxable Value, Dispatch PIN Code & State, Ship to PIN Code & State, and Transaction sub-type. b. Accordingly, approval of the GIC was sought for sharing of the data with the Ministry of Commerce and Industry. c. Decision: The GIC approved the agenda relating to GST data sharing request received from the DPIIT- Logistics Division, Ministry of Commerce and Industry. 3. Decision by circulation on 29.10.2024 regarding e-Way bill data sharing request received from the Ministry of Railways. a. The agenda note stated that a request had been received from the Ministry of Railways for the sharing of e-Way bill data related to major commodities. It was further noted that the aggregated data is required to assist in the logistic management of the Railways. The data fields that are required to be aggregated are Origin and Destination PIN code, Month-Year, Travel Distance slab, HSN code and HSN description, Value of Goods, Origin & Destination District, Origin & Destination State and Mode of Transport. The data items on which aggregation needs to be done are commodities such as Cement & Clinker, Coal, Fertilizer, Pig Iron/steel, Iron Ore, Petroleum Oil Lubricant, Food Grains, Fly ash, automobile, Bauxite, Manganese Ore, Stone, Gypsum, Salt, Sugar and Others (Sand, White Goods etc.). The data is to be aggregated for the financial years 2022-23 and 2023-24. The agenda note also stated that the data request is recurring, with a periodicity of aggregation aligned to the financial year. b. Accordingly, approval of the GIC was sought for sharing the aggregated e-Way bill data with the Ministry of Railways. c. Decision: The GIC approved the agenda relating to sharing aggregated e-Way bill data with the Ministry of Railways. 4. Decision by circulation on 21.11.2024 regarding request received from the state of Jharkhand for relaxation in the eligibility criteria for selection to the post of Technical Member (State) in GSTAT. a. The Agenda Note stated that representation had been received from the State of Jharkhand for relaxation in the eligibility criteria for selection to the post of Technical Member (State) in GSTAT. b. The agenda stated that the representation received from State of Jharkhand has informed that they have observed that there are insufficient number of officers eligible for the post of he post of Technical Member (State) in GSTAT and therefore, The State has requested to relax the criteria in accordance with the provisions of section 110 (1)(d) and proviso thereof of the CGST Act, 2017. It further stated that the State of Jharkhand has requested for relaxations in the qualification of Technical Member (State) in GSTAT and has proposed that the required years of service in Government be considered in place of years served in Group A, and that the rank of Joint Commissioner be recognized as the eligible rank for the role of Technical Member (State) in Jharkhand. The Agenda Note further mentions that the State has confirmed that no current officer meets the existing eligibility criteria. It has also been verbally confirmed that the current Appellate Authority in the State holds the rank of Joint Commissioner. c. The eligibility for the Technical Member (State) is governed by Section 110(1)(d) of the CGST Act which states as follows: - A person shall not be qualified for appointment as - a Technical Member (State), unless he is or has been an officer of the State Government or an officer of All India Service, not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank, not lower than that of the First Appellate Authority, as may be notified by the concerned State Government, on the recommendations of the Council and has completed twenty- five years of service in Group A, or equivalent, with at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government: Provided that the State Government may, on the recommendations of the Council, by notification, relax the requirement of completion of twenty-five years of service in Group A, or equivalent, in respect of officers of such State where no person has completed twenty-five years of service in Group A, or equivalent, but has completed twenty-five years of service in the Government, subject to such conditions, and till such period, as may be specified in the notification. d. In light of the above, the following proposals to relax the eligibility criteria for a period of 10 years was made in the Agenda Note: i. To notify an officer of the Commercial Tax department of Jharkhand, who has completed at least twenty-five years of service in the Government, as Gazetted officer, to be eligible for appointment as Technical Member (State); and ii. To notify the rank of an officer of the State of Jharkhand, not below the rank of "Joint Commissioner of State Tax" as a minimum qualifying rank of the officer who shall be eligible for Technical Member (State) subject to other conditions of Section 110 (1) (d) of the CGST Act, 2017. e. The agenda note was circulated among Members of the GIC for decision. f. Decision: The GIC approved the agenda relating to request of the state of Jharkhand for relaxation in the eligibility criteria for selection to the post of Technical Member (State) in GSTAT. 5. Decision by circulation on 19.11.2024 regarding extension of the due date for furnishing FORM GSTR-3B for the month of October 2024 for taxpayers having principal place of business in States of Maharashtra and Jharkhand due to legislative assembly elections in these States on 20.11.2024 a. The Agenda Note stated that representations had been received from trade and industry regarding difficulty being faced in timely filing of return in FORM GSTR-3B for the month of October, 2024 due to legislative assembly elections to be held in the states of Maharashtra and Jharkhand on 20.11.2024, which is also the due date of filing return in FORM GSTR-3B for the month of October 2024. Additionally, due to elections on 20.11.2024 in these states, the employers are reluctant to grant leave to their employees dealing with GST related work, which will cause impediment in proper exercise of right to vote to the voters of these states. b. Accordingly, the Agenda note to extend the due date for furnishing FORM GSTR-3B for the month of October 2024 from 20th November, 2024 to 21st November, 2024 for taxpayers having principal place of business in States of Maharashtra and Jharkhand was circulated among Members of the GIC for decision. c. Decision: The GIC approved the agenda relating to extension of due date for furnishing FORM GSTR-3B for the month of October 2024 from 20th November, 2024 to 21st November, 2024 for taxpayers having principal place of business in States of Maharashtra and Jharkhand d. Implementation Status: Notification No. 26/2024- Central Tax New Delhi, dated 18th November, 2024 was issued for extending the due date for furnishing FORM GSTR-3B for the month of October 2024 from 20th November, 2024 to 21st November, 2024 for taxpayers having principal place of business in States of Maharashtra and Jharkhand . 6. Decision by circulation on 26.11.2024 regarding extension of the due date for furnishing FORM GSTR-3B for the month of October 2024 for taxpayers in the State of Manipur a. The Agenda Note stated that a reference has been received from the Commissioner of Taxes, Manipur, highlighting the prevailing law and order situation in the State of Manipur, which has necessitated suspension of the mobile data services and internet/ data services, including broadband services, in the territorial jurisdiction of the State of Manipur. It has been mentioned that due to this, timely filing of FORM GSTR-3B for the month of October, 2024 may not be possible for the registered persons in Manipur. It has been further mentioned that prohibitory order under Section 163 of the Bharatiya Nagarik Suraksha Sanhita, 2023 for restriction of the movement of any person outside their respective residences has been issued by the District Magistrates and total curfew is imposed from 4:30 PM of 16th November, 2024. b. The Agenda Note further stated that in view of the above, Commissioner of Commercial Tax, Manipur has requested that to provide relief to the registered persons in Manipur, the due date of filing of FORM GSTR- 3B for the month of October, 2024, may be extended for the persons registered in Manipur, till 30th November, 2024 until the internet services are restored in the state and total curfew is fully lifted after the situation is totally normalized in Manipur. c. Accordingly, the Agenda note to extend the due date for furnishing FORM GSTR-3B for the month of October 2024 from 20th November, 2024 to 30th November, 2024 until the internet services are restored in the state and total curfew is fully lifted after the situation is totally normalized in Manipur was circulated among Members of the GIC for decision. d. Decision: The GIC approved the agenda relating to extension of due date for furnishing FORM GSTR-3B for the month of October 2024 from 20th November, 2024 to 30th November, 2024 for registered persons in the State of Manipur e. Implementation Status: Notification No. 29/2024- Central Tax New Delhi, dated 27th November, 2024 was issued for extending the due date for furnishing FORM GSTR-3B for the month of October 2024 to 30th November, 2024 for taxpayers having principal place of business in State of Manipur. The notification was deemed to have come into force with effect from the 20th day of November, 2024. 7. Decision by circulation on 10.12.2024 regarding extension of the due date for furnishing FORM GSTR-3B for the month of October 2024 for the registered persons having their principal place of business in the district of Murshidabad in the State of West Bengal a. The Agenda Note stated that a reference has been received from the Commissioner of Commercial Tax, West Bengal, stating that as per reports internet services were suspended in many areas in the Murshidabad district following a tension which prevailed on account of an untoward incident during the period from 17.11.2024 to 22.11.2024 and thus representations have been received stating that such suspension in internet services has severely impacted the taxpayers along with the tax professionals in furnishing the returns for the tax period October, 2024 within the due date i.e., by 20.11.2024 and accordingly requests have been made to consider the difficulties faced by the taxpayers and the tax professionals in furnishing the returns within the due date and to consider the burden of payment of late fee as a consequence of such late furnishing of returns for reasons beyond their control. In view of the above, Commissioner of Commercial Tax, West Bengal has requested that the due date for furnishing the return in FORM GSTR-3B for the month of October, 2024 may be extended till 30.11.2024 for the registered persons whose principal place of business is in the district of Murshidabad in the State of West Bengal. He has further proposed that as the due date of furnishing return for the month of October, 2024 is already over now, such extension may be made with retrospective effect from the due date of furnishing the return for the month of October, 2024 i.e., from 20.11.2024. b. Accordingly, the Agenda Note to extend the due date of filing return in FORM GSTR-3B for the month of October, 2024, for the registered persons having their principal place of business in the district of Murshidabad in the State of West Bengal, till 30th November,2024, with retrospective effect i.e., from 20.11.2024 was circulated among Members of the GIC for decision. c. Decision: The Chairperson, GST Council approved the agenda relating to extension of due date for furnishing FORM GSTR-3B for the month of October 2024 for the registered persons having their principal place of business in the district of Murshidabad in the State of West Bengal, till 11th December,2024, with retrospective effect i.e., from 20.11.2024. d. Implementation Status: Notification No. 30/2024 - Central Tax New Delhi, dated 10th December, 2024 was issued for extending the due date for furnishing FORM GSTR-3B for the month of October 2024 till the 11th day of December, 2024, for the registered persons whose principal place of business is in the district of Murshidabad in the State of West Bengal. The notification was deemed to have come into force with effect from the 20th day of November, 2024. *** Agenda item 3: Issues recommended by the Law Committee for the consideration of the GST Council. Agenda item 3(i): Amendment in Section 17(5)(d) of CGST Act, 2017 consequent to judgement of Hon’ble Supreme Court dated 03.10.2024 in the case of M/s Safari Retreats Pvt. Ltd. The Hon’ble Supreme Court of India vide its order dated 03.10.2024 in the case of M/s Safari Retreats Pvt. Ltd. has ruled that the expression “plant or machinery” used in clause (d) of section 17(5) of the CGST Act, 2017 is distinct from the expression “plant and machinery” used elsewhere in the Act and defined by the Explanation to Section 17 of the CGST Act. Hon’ble Supreme Court has also ruled that for the purpose of clause (d) of section 17(5) of CGST Act, functionality test would have to be applied on a case-to-case basis, so as to decide as to whether an immovable property could qualify to be a “plant” or not, to determine the eligibility for availment of input tax credit on goods or services or both used in the construction of the said immovable property. The relevant extracts of the judgement are reproduced below for reference. “ ANALYSIS OF CLAUSES (c) AND (d) …. Para 32. Clause (d) of Section 17(5) is different from clause (c) in various aspects. Clause (d) seeks to exclude from the purview of sub-section (1) of Sections 16 and 18, goods or services or both received by a taxable person to construct an immovable property on his own account. There are two exceptions in clause (d) to the exclusion from ITC provided in the first part of Clause (d). The first exception is where goods or services or both are received by a taxable person to construct an immovable property consisting of a “plant or machinery”. The second exception is where goods and services or both are received by a taxable person for the construction of an immovable property made not on his own account. Construction is said to be on a taxable person’s “own account” when (i) it is made for his personal use and not for service or (ii) it is to be used by the person constructing as a setting in which business is carried out. However, construction cannot said to be on a taxable person’s “own account” if it is intended to be sold or given on lease or license. … MEANING OF THE EXPRESSION “PLANT OR MACHINERY” IN CLAUSE (d) OF SECTION 17(5) Para 42. The question is whether the explanation that lays down the meaning of the expression “plant and machinery” in Section 17 will apply to the expression “plant or machinery” used in Section 17 (5)(d). Para 43. Learned ASG himself accepted that the expression “plant and machinery” appears at ten different places in Chapters V (Input Tax Credit) and VI (Tax Invoice, Credit and Debit Notes) of the CGST Act. According to him, the expression “plant or machinery” appears only in clause (d) of Section 17(5). His submission is that the use of the word “or” in clause (d) is a mistake of the legislature. To counter this, it was submitted that in the Model GST Law, which the GST Council Secretariat circulated in November 2016 to invite suggestions and comments from the public, the expression ‘plant and machinery’ was used in clauses (c) and (d). However, while enacting the CGST Act, the legislature has consciously chosen to use the expression “plant or machinery” only in clause (d). The impugned judgment in the main Civil Appeal is more than five years old. The writ petition in which the impugned decision was rendered is a six-year-old writ petition. If it was a drafting mistake, as suggested by learned ASG, the legislature could have stepped in to correct it. However, that was not done. In such circumstances, it must be inferred that the legislature has intentionally used the expression “plant or machinery” in clause (d) as distinguished from the expression “plant and machinery”, which has been used in several places. As the expression “plant or machinery” appears to be intentionally incorporated, it is not possible to accept the contention of the learned ASG that the word “or” in clause (d) should be read as “and”. If the said contention is accepted, there will not be any difference between the expressions “plant and machinery” and “plant or machinery”. This will defeat the legislative intent. Para 44. The explanation to Section 17 defines “plant and machinery”. The explanation seeks to define the expression “plant and machinery” used in Chapter V and Chapter VI. In Chapter VI, the expression “plant and machinery” appears in several places, but the expression “plant or machinery” is found only in Section 17(5)(d). If the legislature intended to give the expression “plant or machinery” the same meaning as “plant and machinery” as defined in the explanation, the legislature would not have specifically used the expression plant or machinery” in Section 17(5)(d). The legislature has made this distinction consciously. Therefore, the expression “plant and machinery” and “plant or machinery” cannot be given the same meaning. It may also be noted here that the expression ‘plant or machinery’ is used in dealing with a peculiar case of goods or services being received by a taxable person for the construction of an immovable property on his own account, even when such goods or services or both are used in the course of furtherance of business. Therefore, if the expression “plant or machinery” is given the same meaning as the expression “plant and machinery” as per the definition contained in the explanation to Section 17, we will be doing violence to the words used in the statute. While interpreting taxing statutes, it is not a function of the Court to supply the deficiencies. Para 45. Now, the question which arises is what meaning should be given to the expression “plant or machinery”. When the legislature uses the expression “plant and machinery,” only a plant will not be covered by the definition unless there is an element of machinery or vice versa. This expression cannot be read as “plant or machinery”. That is so clear from the explanation in Section 17, which says that plant and machinery means apparatus, equipment and machinery fixed to the earth by foundation or structural support that are used for making outward supply of goods or services or both. The expression includes such foundation and structural support fixed to the earth. However, the definition excludes land, buildings or any other civil structure. Para 46. The expression “plant or machinery” has a different connotation. It can be either a plant or machinery. Section 17(5)(d) deals with the construction of an immovable property. The very fact that the expression “immovable property other than “plants or machinery” is used shows that there could be a plant that is an immovable property. As the word ‘plant’ has not been defined under the CGST Act or the rules framed thereunder, its ordinary meaning in commercial terms will have to be attached to it. …. Para 52. This Court has laid down the functionality test. This Court held that whether a building is a plant is a question of fact. This Court held that if it is found on facts that a building has been so planned and constructed as to serve an assessee’s special technical requirements, it will qualify to be treated as a plant for the purposes of investment allowance. The word ‘plant’ used in a bracketed portion of Section 17(5)(d) cannot be given the restricted meaning provided in the definition of “plant and machinery”, which excludes land, buildings or any other civil structures. Therefore, in a given case, a building can also be treated as a plant, which is excluded from the purview of the exception carved out by Section 17(5)(d) as it will be covered by the expression “plant or machinery”. We have discussed the provisions of the CGST Act earlier. To give a plain interpretation to clause (d) of Section 17(5), the word “plant” will have to be interpreted by taking recourse to the functionality test. … Para 65. Some of our conclusions can be summarised as under a. The challenge to the constitutional validity of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act is not established b. The expression “plant or machinery” used in Section 17(5)(d) cannot be given the same meaning as the expression “plant and machinery” defined by the explanation to Section 17; c. The question whether a mall, warehouse or any building other than a hotel or a cinema theatre can be classified as a plant within the meaning of the expression “plant or machinery” used in Section 17(5)(d) is a factual question which has to be determined keeping in mind the business of the registered person and the role that building plays in the said business. If the construction of a building was essential for carrying out the activity of supplying services, such as renting or giving on lease or other transactions in respect of the building or a part thereof, which are covered by clauses (2) and (5) of Schedule II of the CGST Act, the building could be held to be a plant. Then, it is taken out of the exception carved out by clause (d) of Section 17(5) to sub-section (1) of Section 16. Functionality test will have to be applied to decide whether a building is a plant. Therefore, by using the functionality test, in each case, on facts, in the light of what we have held earlier, it will have to be decided whether the construction of an immovable property is a “plant” for the purposes of clause (d) of Section 17(5).” 2. In this regard, it is to be mentioned that section 17 of the CGST Act deals with apportionment of credit and blocked credits. Clauses (c ) and (d) of section 17(5) of CGST Act and the relevant explanations to the said section read as under:- “17. .. .. .. .. .. .. .. .. .. (5) Notwithstanding anything contained in sub-section (1) of Section 16 and subsection (1) of Section 18, input tax credit shall not be available in respect of the following, namely :— …………………………………….. (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. …………………………………….. Explanation.—For the purposes of clauses (c) and (d), the expression “construction” includes reconstruction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; …………………………………….. Explanation.—For the purposes of this Chapter and Chapter VI, the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes— (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises.” 2.1 Sub-section (5) of Section 17 of CGST Act is a non-obstante sub-section. Clause (d) of section 17(5) of CGST Act restricts availment of input tax credit in respect of goods or services or both, received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Further, clause (c) of section 17(5) of CGST Act denies ITC in respect of works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service. 2.2 The Law Committee deliberated on the issue in its meeting held on 13.11.2024. It observed that in essence, both clause (c ) and (d) of section 17(5) of CGST Act intend to disallow input tax credit on the goods or services or both when used for construction of an immovable property (other than plant and/or machinery). The rationale behind this is that GST is not leviable on sale of immovable property, which leads to a clear case of break in tax chain. Sale of land and building are clearly outside the purview of GST in terms of S. No. 5 of Schedule III to Section 7 of CGST Act, 2017 which provides that the “sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building” shall neither be treated as supply of goods nor as supply of services. 2.3 The Law committee took a note that that there is a minor difference in the usage of words in clause (c) and clause (d) of sub-section (5) of section 17, i.e. the expression `plant and machinery’ has been used in clause (c) of the said section and the same has been defined in the Explanation to section 17 of CGST Act (reproduced below) and has been used multiple times in the Act, whereas the expression `plant or machinery’ has been used in the clause (d) of the said section which is only used once in the Act i.e. in the said clause. “.. Explanation.—For the purposes of this Chapter and Chapter VI, the expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes— (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises” 2.4 The Law Committee noted that the legislature/ GST Council, on their own, to clear ambiguity regarding interpretation of the said expression, have clearly defined the expression ‘plant and machinery’, for the purposes of Chapter V & VI of CGST Act. However, the expression `plant or machinery’ have not been separately defined either in any of the above chapters or elsewhere in CGST Act. Whereas, as discussed above, the intention of the legislature/ GST Council was to deny the benefit of ITC in respect of construction of immovable property, other than when the immovable property was in nature of plant and/ or machinery. 2.5 The Law Committee also felt that while defining ‘plant and machinery’ in the Explanation at the end of section 17(5) of CGST Act, and not separately defining ‘plant or machinery’ in the Act, the legislature/ Council apparently intended both ‘plant and machinery’ as well as ‘plant or machinery’ to be read from the said definition given in Explanation at the end of section 17(5) of CGST Act, as it would never have intended to define one expression viz ‘plant and machinery’ in the Act to remove ambiguities, while leaving other expression viz ‘plant or machinery’ open to varied interpretations, which may have caused confusion and legal disputes. The same implies that legislature/ Council never wanted to treat the expression ‘plant or machinery’ any different from the expression ‘plant and machinery’. Further, had the legislature/ Council intended to treat them differently, it would have defined either the expression “plant or machinery” or the words “plant” and “machinery” separately in the of Chapter V and VI or elsewhere in CGST Act. 2.6 It was also noted that in the draft Model GST Law circulated on November, 2016, the expression `plant and machinery’ were used in both clause (c) and (d) of section 17(5). However, the vetted draft of CGST Law presented before the 11th GST Council meeting held on 4th March, 2023 carried the expression `plant or machinery’ only in clause(d) of section 17 (5) of the CGST Act. 2.7 The Law Committee also discussed that there are catena of judgements where the Hon’ble Supreme Court of India has held that `and’ or ‘or’ must be read as ‘and’. However, in the case of M/s Safari Retreats Pvt. Ltd., the Hon’ble Supreme Court of India has assigned distinct meaning to the expression “plant and machinery” and “plant or machinery” used in clause (c) and clause(d) respectively of section 17(5) of the CGST Act and has left the meaning of the word “plant” in the expression “plant or machinery” in clause(d) of section 17(5) of the CGST Act, to be interpreted on a case-to-case basis, applying the functionality test to the facts of the case. The Law Committee observed that the word “plant” is not defined under the CGST Act or even in the General Clauses Act, 1897. The Law Committee felt that the said distinction between “plant and machinery” and “plant or machinery” may also result in unequal treatment on the availability of input tax credit on works contract services for the construction of immovable properties under clause (c) and on goods or services or both, for the construction of immovable properties under clause (d). While one set of taxpayers, who would procure goods or services separately for construction of an immovable property, may become eligible for input tax credit, by qualifying the said property as a “plant”, the other set of taxpayers who procure same goods or service through a works contract service provider for the construction of a similar type of immovable property would continue to be restricted to avail input tax credit, which would get added to their cost, thus creating a non-level playing field. 2.8 The Law Committee felt that both the clauses (c) and (d) of Section 17(5) deal with the same subject matter, i.e., immovable property and therefore, they must not be treated unequally and the said Explanation to Section 17(5) which applies to Chapters V and VI ought to apply to clause (d) of the said section as well. The Law Committee felt that the interpretation laid by the Hon’ble Supreme Court regarding the expression “plant or machinery” appears to defeat the intention of GST Council as well as the legislature to deny benefit of availment of input tax credit on goods and services used for construction of immovable property, other than when used in specific situations mentioned in the said clauses read with the Explanation provided below the said section. 2.9 Law Committee also observed that determining as to whether an immovable property falls under the expression “plant” under clause (d) of section 17(5) of CGST Act or not based on the functionality test as per facts of each of the case, as per principles decided by Hon’ble Supreme Court in the above mentioned judgement , may create a lot of confusion and chaos and may result in multitude of litigations, which may not be desirable from the perspective of smooth tax administration and ease of doing business. It may also re-open all the past cases related to availment of ITC in respect of goods or services used for construction of immovable property, further adding to confusion and litigation. 3. In view of the above, to clear ambiguity and also to prevent litigation which may happen post the judgement of Hon’ble Supreme Court in the case of M/s Safari Retreats Pvt. Ltd., Law committee recommended that necessary amendments may be carried out in Section 17(5) (d) of CGST Act, 2017, retrospectively w.e.f. 01.07.2017, as below: “17. .. .. .. .. .. .. .. .. .. (5) Notwithstanding anything contained in sub-section (1) of Section 16 and subsection (1) of Section 18, input tax credit shall not be available in respect of the following, namely :— …………………………………….. (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or and machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. …………………………………….. 3.1 Law Committee also recommended that while making the above amendment through Finance Bill, it may specifically be mentioned that the said amendment is being done notwithstanding anything to the contrary contained in any judgment, decree or order of any court or any other authority. 4. The agenda is placed before the GST Council for deliberation and approval. *** Agenda Item 3(ii): Amendment in Schedule III of the Central Goods and Services Tax, 2017 (CGST Act, 2017) regarding supply of goods warehoused in a Free Trade and Warehousing Zone (FTWZ)/Special Economic Zone (SEZ) before clearance to Domestic Tariff Area/for Exports. References have been received from trade requesting for clarification as to whether supply of goods within Free Trade and Warehousing Zone (hereinafter referred to as “FTWZ”), is included under Entry 8(a) of Schedule III of the CGST Act, 2017 as activities or transactions which shall be treated neither as supply of goods nor as supply of services. It has also been mentioned that various Authorities for Advance Ruling are taking divergent views on the same and therefore, there is a need to either issue a suitable clarification or to suitably amend Schedule III of the CGST Act, 2017. 2. Clause (a) of paragraph 8 of Schedule III of CGST Act, 2017 provides that supply of warehoused goods to any person before clearance for home consumption, shall be treated neither as a supply of goods nor a supply of services. Further, Explanation 2 of the said Schedule states that for the purposes of paragraph 8, the expression "warehoused goods" shall have the same meaning as assigned to it in the Customs Act, 1962. 2.1 Doubts have been raised on leviability of GST on the transfer of title or ownership of goods to buyers or transfer of title or ownership involving multiple transactions between buyers, in respect of goods which are imported and stored in FTWZ, without its removal to the Domestic Tariff Area (DTA). There appears to be an ambiguity as to whether or not such transfer of title or ownership of goods warehoused in FTWZ before clearance to DTA, would be treated as supply of warehoused goods to any person before clearance for home consumption under Entry 8(a) of Schedule III of CGST Act, 2017 and therefore, would be considered as ‘neither supply of goods nor as supply of services’ for purposes of GST. 3. It is mentioned that due to doubts as to whether FTWZ are covered as warehouse under Customs Act, 1962, different Authorities for Advance Rulings have given divergent rulings on this subject. Notably, the Tamil Nadu Authority for Advance Ruling (TNAAR) in its judgement in the case of Haworth India Private Limited has held that: “7.4.4 Whereas, Free Trade Warehousing Zone is a Special Economic Zone wherein mainly trading and warehousing and other activities related thereto are carried on. It is a deemed foreign territory within the geography of India for the purpose of tariff and trade. The Special Economic Zones Act, 2005 and the Special Economic Zones Rules, 2006 are the legal framework for FTWZ. Instructions are also issued by the Ministry of Commerce & Industries from time to time to clarify various operational aspects of FTWZ. Even though the day to day activities like warehousing and clearing of goods for home consumption on payment of applicable custom duties are supervised/monitored by Customs officials posted in the FTWZ in accordance with SEZ Act, 2005 read with Customs Act, 1962, the approval/license/administrative control for FTWZ are fully governed under the provisions of SEZ Act, 2005. Therefore, FTWZ is not a warehouse licensed under Customs Act, 1962. Therefore, paragraph 8(a) in the Schedule III is specific to the warehoused goods lying in the warehouses licensed under Customs Act, 1962. 7.4.5 Whereas the transactions narrated in the application are in FTWZ, which are warehouses governed under the provisions of SEZ Act, 2005 and not licensed under Customs Act, 1962. Therefore, the transactions in the FTWZ narrated in question no. 1 of the ARA, will not be covered under Schedule III of CGST Act, 2017 read with CGST Amendment Act, 2018.” 3.1. On the contrary, the Telangana Authority for Advance Ruling (TSAAR) in its judgement in the case of M/s. AIE Fiber Resource and Trading (India) Private Limited has held that: “Free Trade Warehousing Zone (FTWZ) is part of SEZ scheme and it is a customs bonded warehouse. An FTWZ operates similar to an SEZ. They will be trading and warehousing of Goods that are imported without payment of customs duty in these zones. Rule 18(5) of SEZ Rules-MC&I (DC) SEZ Instruction No. 60 dated 6-7-2010 prescribe the conditions under which the FTWZ can hold goods on behalf of foreign suppliers, foreign buyer, DTA supplier and DTA buyer. The applicant imports goods and stores them in a FTWZ till he finds a local customer who will purchase the goods and such purchaser clears the goods under the Customs Act. The transactions proposed to be made by the applicant are covered by Entry 8 of Schedule III of CGST/SGST Acts inserted vide CGST (Amendment) Act, 2018 w.e.f. 1-2-2019, i.e., supply of goods by the consignee to any other person, by endorsement of document of title of the goods, after the goods have been dispatched from the port of origin located outside India but before the clearance for home consumption; or supply of warehoused goods to any person before clearance for home consumption. And such transactions by virtue of Entry 8 of Schedule III do not attract tax under CGST or SGST or IGST Acts.” 4. As per section 2(44) of Customs Act, 1962, "warehoused goods" means goods deposited in a warehouse. Further, as per section 2(43) of Customs Act, 1962, "warehouse" means a public warehouse licensed under section 57 or a private warehouse licensed under section 58 or a special warehouse licensed under section 58A. Section 57 of Customs Act provides for licensing of a public warehouse wherein dutiable goods may be deposited, whereas section 58 of Customs Act provides for licensing of a private warehouse wherein dutiable goods imported by or no behalf of licensee may be deposited. Further, section 58A of Customs Act provides for licensing of a special warehouse wherein dutiable goods may be deposited and such warehouse would be caused to be locked by proper officer and no person shall enter the warehouse or remove any goods therefrom without permission of proper officer. 4.1 Sub-section (n) of section 2 of the Special Economic Zones Act, 2005, defines "Free Trade and Warehousing Zone" as below: “Free Trade and Warehousing Zone” means a Special Economic Zone wherein mainly trading and warehousing and other activities related thereto are carried on.” 4.1.1 Besides, clause (za) of section 2 of the Special Economic Zones Act, 2005 defines Special Economic Zone as below: “Special Economic Zone” means each Special Economic Zone notified under the proviso to sub-section (4) of section 3 and sub-section (1) of section 4 (including Free Trade and Warehousing Zone) and includes an existing Special Economic Zone.” 4.1.2 Further, section 53 of the Special Economic Zones Act, 2005 provides that Special Economic Zones shall be deemed to be a territory outside the customs territory of India. The same is reproduced below: .—"A Special Economic Zone shall, on and from the appointed day, be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorised operations. ………” 4.2 From the above, it emerges that FTWZ are neither Public warehouses as per section 57 of Customs Act, 1962 nor are private warehouses and special warehouses as per section 58 and section 58A of Customs Act,1962. Therefore, it emerges that FTWZ are not “warehouse” as per Section 2(43) of Customs Act, 1962 and therefore, goods stored in FTWZ cannot be considered as warehoused goods as per Section 2(44) of Customs Act, 1962. Therefore, it is clear that supply of goods within FTWZ/ SEZ area, without removal to DTA, cannot be considered to be covered under Entry 8(a) of Schedule III of CGST Act, 2017. 5. On perusal of above, it further appears that supply of goods undertaken for authorized operations in FTWZ before their removal to DTA shall be deemed to be undertaken in a territory outside the customs territory of India and thus, a similar treatment, akin to the one provided for Customs bonded warehoused goods before their clearance for home consumption, needs to be provided for supply of goods for authorized operations undertaken in a FTWZ before their removal to DTA. 6. Consultations were also held with SEZ Division, Department of Commerce (DoC), Government of India for clarity regarding warehousing operations within FTWZ area and SEZ area, who informed inter alia that: i.SEZ units, including FTWZs, can operate as warehousing units for the purposes of authorized operations, where goods can be physically stored, but the title or ownership of these goods can be transferred without actual movement of the goods. Warehousing services by such SEZ units can be provided to clients located in the Domestic Tariff Area (DTA). ii.There is no prohibition on the trading of warehoused goods stored in such SEZ units between different persons located in the DTA without the goods leaving the SEZ unit, as the SEZ unit functions purely as a warehousing unit. iii.Goods stored in a SEZ units (including FTWZs) can be cleared in one of the following ways: To another warehousing unit in the same or different SEZ/FTWZ; or To another SEZ unit or developer in the same or different SEZ; or For export out of India to an overseas customer; For clearance of goods into DTA; or To a DTA buyer, who may either continue holding the goods in the SEZ warehousing unit or clear the goods in one of the modes listed above. 7. It is observed that since SEZ is technically treated as a territory outside India, any supply made before clearance for home consumption may not be made liable to tax. Also, in terms of sub-section (7) of section 3 of Customs Tariff Act, 2017, the liability to pay customs duty shall arise only at the time of final clearance of such goods from FTWZ to DTA, who would file a Bill of Entry for removal of such goods to DTA and pay the applicable customs duty along with IGST. In other words, the supply of goods before their removal from the FTWZ to DTA should not be subject to the levy of Integrated tax and the same should be levied and collected only when such goods are removed from FTWZ to the DTA. It is also observed that SEZ Units (other than FTWZs) can also be set up as a warehousing unit for authorized operations in a SEZ. 8. Therefore, there may be a need to provide a level playing field for the supplies involving transfer of title or ownership of goods stored in a SEZ unit or in a FTWZ before their clearance to DTA or for exports, with the supply of the warehoused goods before their clearance for home consumption. For this purpose, there may be a need to insert an entry in Schedule III of CGST Act, 2017 to clearly provide that the supply of goods stored in a Special Economic Zone or in a Free Trade Warehousing Zone, to any person, before removal for exports or supply to the Domestic Tariff Area shall be treated neither as supply of goods nor as supply of services. 9. The Law Committee deliberated on the matter in its meetings held on 25.04.2024 and 13.11.2024. The Law Committee recommended the following: 9.1 Clause (aa) may be inserted in paragraph 8 of Schedule III of CGST Act, 2017, as below (in red): Schedule III of CGST Act, 2017: “8. (a)……. (aa) Supply of goods warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to any person, before clearance for exports or to the Domestic Tariff Area. 9.2 Besides, Explanation 2 in Schedule III of CGST Act, 2017 may be amended, as below (in red): Explanation 2.––For the purposes of clause (a) of paragraph 8, the expression, “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962. 9.3 Further, Explanation 3 may be inserted in Schedule III of CGST Act, as below (in red): Explanation 3.––For the purpose of clause (aa) of paragraph 8, the expressions "Special Economic Zone", “Free Trade Warehousing Zone” and “Domestic Tariff Area” shall have the same meaning as assigned to them in section 2 of the Special Economic Zones Act, 2005 (28 of 2005). 9.4 Law Committee further recommended that since the supply of goods in a SEZ, including a FTWZ, before removal to exports or DTA, is similar to the supply as provided in clause (a) of paragraph 8 of Schedule III of CGST Act, and as the said provisions of clause (a) of paragraph 8 of Schedule III have been deemed to be inserted in Schedule III retrospectively w.e.f. 01.07.2017 vide Section 159 of Finance Act, 2023, the above proposed amendments in Schedule III of CGST Act may be made effective retrospectively with effect from 01.07.2017 as well. 9.5 Law Committee also recommended that no refund may be admissible in cases where any tax has already been paid in respect of transactions/supplies covered under Entry 8(aa) of Schedule III of CGST Act before the said amendment is notified. To make it clear, an explicit provision may be provided in the Finance Act (on similar lines as was done in Finance Act, 2023 in respect of clause (a) of paragraph 8 of Schedule III) that no refund would be admissible in cases where any tax has already been paid in respect of transactions/supplies covered under Entry 8(aa) of Schedule III of CGST Act before the said amendment is notified. 10. The agenda note is placed before the GST Council for deliberation and approval. *** Agenda Item 3(iii): Amendment in Central Goods and Services Tax Act, 2017 for incorporation of provisions relating to Track and Trace Mechanism for specified commodities. GST Council in its 42nd meeting held on 5th October, 2020, decided to constitute a Group of Ministers (GoM) to examine the possibility to levy GST based on the capacity of manufacturing unit and introduce special composition schemes in such evasion-prone sectors like pan masala, gutkha, brick kilns, sand mining etc., and to explore any other suitable administrative or systemic mechanism(s) to plug the existing leakages in these sectors in order to augment the revenue realised from such sectors. 2. The said GoM in its Final Report mentioned that globally other countries are also facing challenges of tax evasion in tobacco products, but nowhere capacity-based levy is resorted to for curbing such evasion. Instead, countries have opted for technological solution to track and trace such products in the entire supply chain. GoM, while giving recommendations for plugging revenue leakages in these evasion prone sectors, has recommended inter-alia as follows: “The GoM deliberated the whole issue at length and examined all possible options for enhancing the compliance in the sector. The GOM identified certain additional compliance measures with respect to different aspects of production and supply, namely: - “a. ………. b……….. c……….. . . h……………….. i. Gradually, the requirement of unique identification marking such as QR code or stamps, on each packet/pouch will be prescribed. The unique identifier shall enable determination of the following: (a) the date, place and factory of manufacture; (b) the machine used to manufacture; (c) the production shift or time of manufacture; (d) the product description, quantity and maximum retail sale price; (e) any other relevant information, as may be prescribed.” (Emphasis Supplied) 3. Further, GoM has suggested that efforts shall be made to implement Track and Trace Mechanism for all the tobacco products, while carrying out the associated infrastructural, systemic & legal feasibility studies to implement the same. 3.1 The said final report of GoM was discussed in 49th GST Council meeting held on 18th February 2023 wherein the Council has accepted the recommendations of the GoM. BRIEF INTRODUCTION OF THE TRACK AND TRACE SYSTEM 4. The Track and Trace System has been formalized under the Protocol to Eliminate Illicit Trade in Tobacco Products under World Health Organisation Framework Convention on Tobacco Control (WHO FCTC). The Protocol builds upon and complements Article 15 of the WHO FCTC, which addresses means of countering illicit trade in tobacco products, a key aspect of a comprehensive tobacco control policy. The objective of the Protocol is the elimination of all forms of illicit trade in tobacco products, in accordance with the terms of Article 15 of the WHO FCTC. 4.1 It requires the establishment of a global tracking and tracing regime within five years of entry into force of the Protocol, comprising national and/or regional tracking and tracing systems and a global information sharing point located in the Convention Secretariat. Other provisions to ensure control of the supply chain cover licensing, due diligence, record keeping, security and preventive measures, as well as measures in relation to Internet and telecommunication-based sales, duty free sales, duty free zones and international transit. The Protocol also covers important matters concerning offences, with provisions for liability, prosecutions and sanctions, seizure payments and special investigative techniques, as well as disposal and destruction of confiscated products. 4.2 Another key group of substantive articles addresses the issue of international cooperation, such as measures on information sharing, technical and law enforcement cooperation, protection of sovereignty, jurisdiction, mutual legal & administrative assistance and extradition. 4.3 The Track and Trace System is envisaged to provide effective monitoring and control of the Supply Chain of specified products. Under this system, a Unique Identifier with security features is to be affixed on the product at the time of manufacture and relevant data as prescribed will be updated on a centralized server. During the transit, the data will be routinely updated on the server as prescribed. During the receipt of the consignment in further supply chain, the data will be authenticated. This data can also be accessed for validation of Unique Identifiers by enforcement agencies. The whole process can be described as under: Source: Guidebook on Implementing Article 8: Tracking & Tracing, WHO FCTC Further, the Track and Trace system implemented by UK HMRC is explained below: Figure: UK HMRC Track and Trace system 4.4 As per sub-article (4) under Article 8 of the said Protocol, the following information needs to be captured under the track and trace mechanism: - 4. Each Party shall, for purposes of paragraph 3, as part of the global tracking and tracing regime, require that the following information be available, either directly or accessible by means of a link, to assist Parties in determining the origin of tobacco products, the point of diversion where applicable, and to monitor and control the movement of tobacco products and their legal status: (a) date and location of manufacture; (b) manufacturing facility; (c) machine used to manufacture tobacco products; (d) production shift or time of manufacture; (e) the name, invoice, order number and payment records of the first customer who is not affiliated with the manufacturer; (f) the intended market of retail sale; (g) product description; (h) any warehousing and shipping; (i) the identity of any known subsequent purchaser; and (j) the intended shipment route, the shipment date, shipment destination, point of departure and consignee. 4.2 The information in subparagraphs (a), (b), (g) and where available (f), shall form part of the unique identification markings. 5. Each Party shall require, within the time limits specified in this Article, that the information set out in paragraph 4 is recorded, at the time of production, or at the time of first shipment by any manufacturer or at the time of import onto its territory.” 5. As recommended by the GoM on capacity-based taxation and special composition scheme for evasion prone sectors in its final report and as approved by the GST Council in its 49th meeting held on 18th February, 2023, track and trace mechanism in respect of specified goods needs to be implemented in India. 5.1 On the basis of such track and trace mechanism suggested in WHO Protocol to Eliminate Illicit Trade in Tobacco Products, as discussed in Para 4 above, the track and trace system proposed to be introduced in India may have the following parameters: i.All unit packets of specified products may be required to be marked with a unique identifier. The unique identifier may be non-sequential, non-predictable and non-repeatable and may be required to be irremovably printed or affixed, indelible and should be clearly visible. Further, the unique identifier in form of a tamper-proof security feature composing both visible and invisible elements, should enable the authorities and consumers to verify its authenticity. This requirement may be for both locally manufactured goods as well as the imported goods. ii.The unique identifier may contain the following information: a.the date, place and factory of manufacture; b.the machine used to manufacture; c.the production shift or time of manufacture; d.the product description, quantity and maximum retail sale price; e.the intended market of retail sale; f.any other relevant information. iii.Relevant persons involved in trade of specified products such as manufacturers, dealers, wholesalers (B2B supplier) may be required to record the movements of these packets throughout the supply chain and transmit the related information to an independent provider appointed by the Government or on Government servers. However, the last mile retailer may not be required to have such a system at his place. iv.The data should then be made accessible to the officers for enforcement purposes. v.Such person may be required to install tamper proof devices on their machines and may be required to mark and record unique identifiers on the aggregated packaging such as cartons, master cases, or pallets. However, the original unique identifier on the unit packets should not be tampered with so that the tracking and tracing of all unit packets remains possible at all stages. vi.All the manufacturers and importers may be required to enter into Data Storage Contracts for enabling verification of collected information including that contained in the Unique Identification Marking with an independent third party approved by the Central Government on the recommendations of the Council. The third party’s activities may be monitored by an external auditor. vii.The cost for the implementation of the track and trace system may be recovered from the persons engaged in the trade of specified goods through a fees or charge for the generation of unique identifiers. 6. The Law Committee deliberated on the matter in its meeting held on 13.11.2024. Law Committee observed that while the technology for implementation of track and trace mechanism may be finalized in the due course, an enabling provision needs to be provided in the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) to empower the Government, on the recommendations of the Council to implement the said mechanism for the specified commodities. The commodities to be specified for this purpose may be separately identified in due course and notified by the Government on the recommendations of the Council. 6.1 The Law Committee recommended that a new section, Section 148A, may be inserted in the CGST Act as below: 148A. TRACK AND TRACE MECHANISM FOR CERTAIN GOODS (1)The Government, may, on the recommendations of the Council, specify through a notification, goods in regard of which the provisions of this section shall be applicable. (2)Every person or class of persons, as may be notified by the Government on the recommendations of the Council, who deals with such goods, as specified under sub-section (1), shall affix, a unique identification marking, containing such information and in such manner, on the said goods or such packages thereof, as may be prescribed. (3) The person or class of persons referred to in sub-section (2), shall, maintain such information, records or documents, in such form and manner, as may be prescribed. (4) The Government may, either by itself or through such persons as may be notified on the recommendations of the Council, provide the system for enabling affixation of Unique Identification Marking and for electronic storage and access of information contained in the Unique Identification Marking. (5) The Government may, by a notification issued on the recommendations of the Council, require the person or class of persons as referred to in sub-section (2), to pay such an amount, as may be notified, in relation to the system referred to in sub-section (4). (6) The Government, may, on the recommendations of the Council, require the person or class of persons referred to in sub-section (2), to furnish the details of machinery installed in the principal place of business of manufacture of such goods, including the identification, capacity, duration of operation and such other details or information, within such time and in such form and manner, as may be prescribed. 6.2 Law Committee also felt that there may be a need to provide for penal provisions for contraventions of the provision relating to tracking and tracing mechanism. Law Committee, therefore, recommended that a new section 122B may be inserted in the CGST Act as follows: 122B. Penalty for failure to comply with the track and trace mechanism. “122B. (1) Notwithstanding anything contained in this Act, where any person, referred to in sub-section (2) of section 148A, acts in contravention of the provisions of the said section or the rules made thereunder, he shall, in addition to any penalty that is paid or is payable by him under Chapter XV or any other provisions of this Chapter, be liable to pay a penalty equal to an amount of one lakh rupees or ten percent of the tax payable on such goods, whichever is higher. 6.3 Besides, Law Committee recommended that the following definitions may be inserted in Section 2 of the CGST Act: (112B) "Unique Identification Marking” includes a digital stamp, digital mark or any other similar marking, which is unique, secure and non-removable, as may be notified by the Government under sub-section (2) of section 148A; 7. Law Committee also recommended that the detailed procedure to be followed for track and trace mechanism may be subsequently prescribed through the rules after finalization of the technology for implementation of the said mechanism. 8. The Agenda is placed before GST Council for deliberation and approval. Agenda Item 3(iv): Amendment in sub-section (5) of section 9 of Central Goods and Services Act, 2017 for providing clarity regarding determination of tax liability of the electronic commerce operator in respect of specified services. Representations have been received from trade and industry to clarify the scope of coverage of sub-section (5) of section 9 of Central Goods and Services Act, 2017 (hereinafter referred to as “CGST Act”) for determination of tax liability of the electronic commerce operator in respect of services, notified under the said sub-section, supplied by the suppliers using the platform provided by the said electronic commerce operator (hereinafter referred to as “ECO”). Concerns have been raised that divergent practices are being followed in the electronic commerce industry due to contradictory views taken by various Authorities for Advance Ruling regarding the interpretation of the phrase “if such services are supplied through it” in the said sub-section to determine whether a particular service, notified under the said sub-section, which is supplied by a supplier using digital or electronic facility or platform, provided by the electronic commerce operator, can be said to be the services supplied through the said electronic commerce operator for the purpose of the said sub-section. This has created ambiguity among the trade and field formations leading to legal disputes. 2. Issue in Brief 2.1 Section 9(5) of the CGST Act creates a deeming fiction that when a supply of specified category of services is made by the service provider through an ECO, the ECO shall be considered as deemed supplier of the said service for the purpose of liability to pay tax in relation to supply of the said service. For the purpose of section 9(5) of the CGST Act, the following categories of services have been specified by Notification No. 17/2017-Central Tax (Rate), dated 28.06.2017 as amended from time to time: i) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab, motor cycle, or any other motor vehicle except omnibus; (ia) services by way of transportation of passengers by an omnibus except where the person supplying such service through electronic commerce operator is a company; (ii) services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act; (iii) services by way of house-keeping, such as plumbing, carpentering etc., except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act; (iv) supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises. 2.2 In the case of services by way of transportation of passengers by a radio-taxi, motorcab, maxicab, motor cycle etc., broadly, two kinds of business models are used by the electronic commerce operators: i.Commission-based Model In the commission-based model, drivers use the platform of an electronic commerce operator (ECO) to offer passenger transportation services. The ECO connects drivers with customers and earns revenue by taking a commission from each ride. The fare structure is dynamically determined on the ECO’s platform based on factors such as distance, ride duration, and demand. Payment for the ride can be made by the passenger either on the ECO’s platform or directly to the driver. Fare settlements to the drivers can be immediate, with the ECO deducting his commission in real-time, or subsequently, with drivers receiving their payments on weekly/bi-weekly/periodical basis after cumulative fare calculations. The ECO may also adjust commission rates periodically based on driver’s performance and market conditions. The ECO may maintain a rating system where customer’s feedback influences driver rankings. ECO may also amend terms and conditions, including commission rates, with advance notice to drivers. ii.Subscription-Based Model In the subscription-based model, drivers pay a recurring subscription fee, either monthly or yearly, to access the ECO’s platform, which facilitates in connecting the drivers with the passengers. The fee may be tiered based on usage levels, features offered to the drivers such as premium support or advanced analytics, etc. Estimated fares based on various parameters, such as distance, fuel costs, vehicle type, timing, etc. are suggested on the platform. In some models, the charges are collected by the ECO from the driver on per-ride basis. There is a certain margin of autonomy for further fare negotiation between the passenger and the driver on the platform before the ride is confirmed. The final negotiated amount is generally recorded on ECO’s platform. Fare settlements occur through direct payments from customers to drivers, with the ECO merely providing the interface for booking and payment processing. While the ECO does not charge commissions, it often provides additional support services, including marketing tools, analytics, and customer relationship management systems, emergency response system, etc. The platform mainly acts as an aggregator once drivers and customers establish a direct connection. Subscription terms detail the services included, payment methods, renewal processes and cancellation policies. 2.3ECOs using a commission-based business model are complying with their tax liabilities under Section 9(5) of the CGST Act. However, disputes have arisen regarding ECOs operating under a subscription-based model as some of these ECOs are not paying tax on the specified services under the said section, claiming that their services do not fall under the phrase "if such services are supplied through it” mentioned in Section 9(5) of the CGST Act. They are contending that they merely provide a platform for drivers and passengers to connect and are not involved in the actual commercial transaction between the driver and the passenger. 2.4Further, the subscription-based model has been analysed by various Authorities for Advance Ruling who have given contradictory rulings based on their interpretation of the phrase “if such services are supplied through it” in section 9 (5) of the CGST Act. 2.5The Karnataka Authority for Advance Ruling, in the case of M/s Opta Cabs Pvt. Ltd. (Order No. KAR/ADRG 14/2018 dated 27/07/2018), ruled that ECOs using a subscription-based model are "deemed suppliers" under Section 9(5) of the CGST Act and are liable for GST on services provided by way of transportation of passenger. This ruling was reconfirmed by the Appellate Authority for Advance Ruling (Order No. KAR/AAAR/04/2018-19 dated 04/12/2018). Similar rulings were given in the cases of Roppen Transportation Services Pvt. Ltd by Karnataka Authority for Advance Ruling (Order No. KAR ADRG 36/2024 dated 24/07/2024) and by Tamil Nadu Authority for Advance Ruling in case of M/s Balat Enterprises Private Limited (Order No. 02/ARA/2024 dated 27/03/2024, Tamil Nadu). 2.6The Karnataka Authority for Advance Ruling in the cases of M/s Multi-Verse Technologies Private Limited (Order No. KAR ADRG 36/2022 dated 27/10/2022), M/s Juspay Technologies Pvt Ltd (Order No. KAR ADRG 31/2023 dated 15/09/2023), and the West Bengal Authority for Advance Ruling in case of Natural Language Technology Research (Order No. 11/WBAAR/2024-25 dated 10/09/2024) ruled that ECOs in such subscription-based business models are merely facilitating the connection between driver and passenger and are not "deemed suppliers" under Section 9(5) of the CGST Act, and hence are not liable for GST on services provided by way of transportation of passenger. 2.7Further, in this regard, Writ Petition no. 25497/2024 was filed by M/s Uber India Systems Pvt. Ltd. before the Hon’ble High Court of Karnataka, which vide its interim order dated 25.09.2024 directed Chairman, Central Board of Indirect Taxes and Customs (CBIC) to address concerns of ECOs regarding their GST liability under Section 9(5) of the CGST Act and issue necessary clarification, if required. 2.8In compliance to the said order, a meeting was held on 14.10.2024 by Chairman, CBIC, where various stakeholders raised concerns and requested to issue clarification on the phrase "through it" provided in Section 9(5) of CGST Act so as to resolve distortions among ECOs involved in supply of services by way of transportation of passengers. They also submitted written representations. The gist of the representations received from Electronic Commerce Operators (ECO) and taxi driver-unions is enclosed as Annexure A to this agenda note. 3. Legal Provisions under GST regime: 3.1 As per sub-section (45) of section 2 of the CGST Act: “Electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce; 3.2 Sub-section (44) of section 2 of the CGST Act defines ‘electronic commerce’ as follows: “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network 3.3 Sub-section (5) of section 9 of the CGST Act, which deals with ECOs who are liable to pay tax for specified category of services, reads as under: “9. Levy and collection: (5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.” 4. Examination 4.1 The matter has been examined on the basis of above legal provisions and the submissions made by various stakeholders. 4.2 In this regard, it is observed that Section 9(5) of the CGST Act aims to shift the responsibility of tax collection to electronic commerce operators (ECOs), thereby expanding the tax base and easing the burden of compliance. Both business models of ECOs, commission-based and subscription-based, serve as electronic platforms that connect service recipients with service providers. In both cases, customer experience is enhanced, market reach of the supplier is expanded by virtue of the electronic interface, and other features such as easy payments, customer support, transparent pricing, service quality etc. are also provided. Given these similarities, distinguishing electronic platforms based on their business models for taxation purposes may not align with the intent of Section 9(5) of the CGST Act. A benefit accruing to a particular model should be based on inherent features on commercial basis and not on the basis of taxability of the same. The tax policy of the government should not influence the economic behaviour of taxpayers. The principle of tax neutrality is one of the overarching principles of tax policy. Neutrality also entails that the tax system raises revenue while minimising discrimination in favour of, or against, any particular economic choice. This implies that the same principles of taxation should apply to all similar forms of business. 4.3 It is claimed by ECOs using a subscription-based model that they differ from commission-based platforms because they do not control fares and negotiations, and also do not monitor the rides and therefore, should be treated differently from commission based ECOs. However, it is observed that drivers using ECO’s platform, either in commission based model or in subscription based model, get distinct advantage viz -a-vis the drivers who are supplying passenger transportation services offline without using any electronic commerce platform, as the supply using ECO’s platform do offer significant advantages to such drivers in terms of growth potential, economies of scale, market reach and lower barriers to entry, which are otherwise not available to offline small service providers. Thus, granting tax advantages to ECOs following a particular business model could disadvantage independent service providers without access to such platforms. The argument given by subscription-based model ECOs that including supplies of specified services in subscription-based model may increase tax obligations leading to increased burden on the drivers seems to be misplaced, as the tax burden will ultimately be borne by end-customers. Differentiating between taxing the ECOs based on business models could distort the ecosystem and undermine the law’s intent to cover transactions involving use of electronic commerce platforms. Besides giving tax advantage in case of a particular business model may lead to adoption of similar business models by the other ECOs in future, thereby taking them all out of the purview of the tax liability under section 9(5) of CGST Act, which will defeat the intended purpose of the said section. 5. The Law Committee deliberated on the issue in its meeting held on 06.12.2024. The Law Committee was of the view to ensure that the tax is payable by the ECOs in respect of supplies of specified services made by the suppliers using ECO’s platform, irrespective of the model used by the ECOs, the provisions of section 9(5) of CGST Act need to provide clarity for coverage of all such services under the said section for the purpose of tax liability of the ECO for payment of tax in respect of such specified services provided using ECO’s platform. Issuing any clarification through a circular in respect of scope of section 9(5) of CGST Act may not serve its intended purpose as the same maybe challenged in the courts by the ECOs who are adversely affected by such clarification, which may not resolve the legal disputes in the matter. Law Committee, therefore, felt that to address the issue, the law needs to be made sufficiently broad so as to cover current as well as the potential future business models and therefore, a prospective amendment in section 9(5) of CGST Act may be made. Without such an amendment, ECOs facilitating supply of specified services may amend their business models to avoid taxation under section 9(5) of CGST Act, resulting in significant revenue loss to the Government, an outcome never intended by the law. A law amendment would also provide these ECOs who are not paying tax at present, sufficient time to make suitable modifications in their internal systems and implement suitable mechanisms to collect taxes from customers and pay to the Government while continuing to facilitate passenger transportation services. 6. Law Committee also observed that the same principle may apply in respect of all other specified services under section 9(5) of CGST Act also. Accordingly, Law Committee recommended that in order to provide a level playing field to all the electronic commerce operators involved in supply of all the specified categories of services under section 9(5) of the CGST Act, and to avoid any revenue loss to the Government on account of adoption of a particular business model by ECO, section 9(5) of CGST Act may be amended prospectively, as below, so as to broaden its scope to cover all such business models. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator, if such services are supplied through it or are agreed to be supplied by the supplier of such services on the digital or electronic facility or platform owned, operated or managed by the said electronic commerce operator, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:” 7. Similar amendments will also be required in section 5(5) of IGST Act, 2017 and section 7(5) of the UTGST Act, 2017. Besides, similar amendments will also be required in various State GST Acts. 8. The agenda note is placed before the GST Council for deliberation and approval. *** Annexure A: Gist of the representations S. No. From Date (2024) Brief of representation Suggestions 1 ONDC 21/10 The AAR rulings and the Delhi HC judgment give a useful rubric to determine when an ECO should be considered liable to pay tax under Sec 9(5). The GST Council needs to take cognizance of these distinct operating models and formally provide clarity on the tax implications for both. To formally clarify the necessary and sufficient conditions to decide when a supply can be construed to have been "through the ECO". SaaS platforms (particularly those operating in an open network) need to be explicitly exempted from paying GST under Section 9(5), as they do not exercise control over the transaction and do not collect consideration for the ride. Issue a clarification that GST liability under section 9(5) of the CGST Act, 2017, does not apply to platforms operating under a SaaS model, such as Namma Yatri by MTIPL. These platforms merely facilitate connections between drivers and passengers without controlling fare, invoicing, or payment collection. 2 OLA CABS 22/10 OLA is currently running a 3-wheeler segment subscription model where it is providing a Software as a Service [SaaS] platform for three-wheeler auto segment and charging nominal subscription fee from driver partners. In this model, the Company provides a software platform or a software application only for the purpose of connecting the passenger users (potential service receivers) with driver partners (potential service providers). Thereafter, all the activities like concluding the contract of ride, monitoring the entire ride, negotiation of fare, payment of fare are done offline jointly between the respective driver partner and the passenger user. The Company does not have any role in scheduling the ride or ride route or prescribing the ride fare or collecting the fare or monitoring the rides or settling of the disputes, if any. However, OLA is currently running a commission model in 2-wheeler and 4-wheeler segment wherein it is charging a convenience fee on a per ride basis. The key distinctive features in this model, interalia, are (a) The passenger user is shown a definitive fixed fare for the ride which is non-negotiable (b) The ride is monitored and tracked by the OLA app and both passenger user and driver partner are notified on completion of the ride (c) Ola app has visibility to final fare paid by passenger user to driver partner (d) Invoice is issued by Ola app to passenger user for passenger transport services on behalf of the driver partner. However, ambiguity has been created by contrary advance ruling orders issued e.g. in July 2018, the Karnataka Advance Ruling Authority had initially determined the tax liability under Section 9(5) in the case of M/s Opta Cabs Private Limited wherein it has been held that even merely connecting the service provider and consumer on an ECO platform, would mean that the services are supplied through the ECO. Through this advance ruling, it has been held that, the fact that the ECO is not collecting ride fare from riders on behalf of drivers is irrelevant for the purpose of attracting/determining Section 9(5) applicability. However, the Karnataka Advance Ruling Authority order in the case of M/s Multiverse Technologies Pvt. Ltd. in October 2022 and M/s Juspay Technologies Pvt. Ltd. in September 2023, is in direct contradiction with the prior ruling referred above. Recently in July 2024, Karnataka Advance Ruling Authority has passed another contradictory order in the case of M/s Roppen Transportation Services Private Limited wherein it has been held that the app not only generates leads, but also provides a platform for fare negotiation – and hence, the services are supplied “through” the app and the collection of consideration is irrelevant to determine the taxability under Section 9(5) of the CGST Act. Also, in a recently pronounced advance ruling by Tamil Nadu Advance Ruling Authority in the case of M/s Balat Enterprises Private Limited it has been held that M/s Balat Enterprises is liable to discharge tax liability under Section 9(5). In order to bring tax parity in this industry, it is requested to issue a suitable clarification on the applicability of the provisions of Section 9(5) or amend the law as may be suitable Bring clarity on the applicability of GST on all industry players thereby ensuring level playing field to all; exclude from GST ambit ecommerce operators engaged in facilitating supply of passenger transport services (whether 2, 3 or 4 wheelers) by third party drivers to customers; if it is not feasible to exclude all 2, 3 and 4 wheelers from GST ambit, then we would request you to at least exclude 2 and 3 wheelers considering these are generally used by masses and economically weaker sections of the society 3 UBER 23/10 The confusion has been created after the Karnataka Advance Ruling orders in the applications of Multiverse and Juspay – followed by advance ruling orders in other states too. Till the time of these rulings there was no uncertainty on the GST position. The confusion qua levy of GST by ECOs under Section 9(5), despite the well-settled law and industry practice, was created by the Karnataka Advance Ruling Authority orders in the cases of M/s Multiverse Technologies Pvt. Ltd. issued in October 2022 and M/s Juspay Technologies Pvt. Ltd. issued in September 2023; wherein similar facts were involved but these rulings are in direct contradiction with the prior ruling pronounced by them in the case of M/s Opta Cabs Private Limited. Also, in a recently pronounced advance ruling by the Tamil Nadu Advance Ruling Authority, in the case of M/s Balat Enterprises Private Limited in May 2024 (on similar facts), it has been held that GST is payable under Section 9(5) on passenger transport services facilitated through the applicant’s app though the applicant submitted that its business operation involves mere linking of service providers and the customers for the provision of passenger transportation services and other services such as hiring or renting of farm equipment, skill-based services like plumbing, carpentry etc. through their mobile App “Vyavshay” although the applicant submitted that it has no responsibility in relation to such services supplied through their app. In the context of Section 9(5), it is pertinent to highlight that all ECOs facilitating passenger transportation services are similar in as much as in all cases such services are facilitated through their apps, ECOs earn revenue by charging a commission to users/ subscription fee to the drivers/users; Apps charge a subscription fee to the drivers instead of a per trip commission as a percentage of fare; payments are to be made by rider to driver directly. 90% of the trips by ECOs like Uber on autos and motorcycles are directly settled between driver and rider in cash and limited support services are provided to drivers and riders. It is evident that from a Section 9(5) perspective, there are no major differences between the two models – whether consideration is charged by the ECO on a per trip commission basis or on a subscription basis and hence has no bearing on the applicability of Section 9(5) and that collection of consideration by the ECO is not a requirement for levy of 9(5), as compared to the GST TCS provision under Section 52 of the CGST Act. The act of agreeing or an acceptance to supply services by the intended supplier to the recipient for a consideration and communicated to such recipient on the ECO platform/app, would qualify as ‘services supplied through an ECO’ for Section 9(5) applicability. The CBIC may ensure GST parity amongst the industry participants and provide resolution in the present context. In order to bring tax parity in this industry, it is requested to kindly issue a suitable detailed clarification on the applicability of the provisions of Section 9(5). Pending the said clarification, a detailed affidavit may kindly be filed before the Hon’ble Karnataka High Court documenting CBIC’s views on the subject in line with TRU circular No. 334/5/2015-TRU dated February 28th, 2015 issued when aggregator liability was first introduced under service tax law. 4 RAPIDO 22/10 The SaaS model has been recognized by different Authorities of Advance Ruling as being a distinct and different model under which ride services are NOT provided “through” the platform. Under the GST regime, such SaaS platforms are taxed on the subscription fee. The instant SaaS model aligns with this approach, suggesting GST should only apply to the platform's service of providing app access (and not on the independent services provided by Drivers to the Passengers). From a technical standpoint as well, the SaaS model does not fall under the ambit of "supplied through the platform" as provided under Section 9(5) of the CGST Act, since the platform only acts as a lead generator for the Drivers (without involvement in the actual facilitation or delivery of ride services): by enforcing operational protocols such as requiring Passengers to settle fares before booking new rides, offering scheduled ride features with set fares (reserve/ schedule ride feature), and charging convenience fees from the Passengers for the service quality and ease of use. These elements demonstrate the platform's control and involvement in facilitating rides between Drivers and Passengers, which are absent in the SaaS model. In the SaaS model, the platform does not collect the ride fare from the Passengers. In fact, there is no mechanism for collection of ride fare by the platform, thus it cannot be expected to remit tax on transactions it does not financially control since the principles of indirect taxation require that tax is collected from the entity receiving payment for the service. Recent advance rulings issued by the Karnataka Advance Ruling Authority and the West Bengal Advance Ruling Authority, have held that platforms are not liable to pay GST in respect of the Passenger transportation services where the platforms are merely acting as technology service provider against subscription fee. However, the above position has been rendered ambiguous due to another advance ruling of Karnataka Advance Ruling authority in Rapido’s own case, wherein it was held that Rapido is liable to pay GST on the supply of services provided by the independent four-wheeler cab service provider (person who has subscribed to applicants ’Rapido' app) to its Passengers on Rapido’s platform, being an e-commerce operator, in terms of Section 9(5) of the CGST Act 2017. Rapido has filed a writ petition before the Karnataka High Court, and an interim stay has been granted by the High Court in the said proceedings, alongside admitting Rapido’s plea. Having regard to ambiguity created by some divergent rulings, the Company is representing herewith about a pressing requirement for issuance of a clarification regarding the non-applicability of the provision of Section 9(5) of the Central Goods and Services Tax (CGST) Act on the ‘SaaS model’ in India's mobility sector. To clarify that platforms, merely providing lead generation services under SaaS based model are liable to 18% GST on the subscription fee charged and that SaaS model is not covered under Section 9(5) of the CGST Act, 2017. 5 Moving Tech Innovations Private Limited (Namma Yatri) 21/10 It is essential to distinguish between traditional aggregator models and the emerging SaaS based models. Traditional aggregators are deeply involved in every step of the service process, from booking to payment collection, and are therefore justifiably liable under section 9(5) of the CGST Act, 2017. In contrast, SaaS-based models like Namma Yatri merely provide a technology platform that connects service providers (drivers) with consumers, without exercising control over critical elements such as pricing, invoicing, or payment collection. The service is independently conducted by the service providers. Even in advance rulings, it has been held that when companies do not manage or control the essential aspects of the transaction, GST liability under section 9(5) should not apply. Therefore, the applicability of GST liability must be determined by the extent of control and involvement exercised by the platform in the service provision process, as well as the functional nature of the platform itself. Recognize the distinction between traditional aggregators, who take complete control over the transportation process and fare management, and Open Network models, such as Namma Yatri, which operates as part of the Government-backed ONDC. Issue a clarification that GST liability under section 9(5) of the CGST Act, 2017, does not apply to platforms operating under a SaaS model, such as Namma Yatri by MTIPL as these platforms merely facilitate connections between drivers and passengers without controlling fare, invoicing, or payment collection. 6 Taxina Mobility Pvt. Ltd. 21/10 Taxina operates on a subscription base model that allows drivers to retain their entire earnings, providing them with greater financial stability. By eliminating the burden of trip-based commission fee, Taxina enables drivers to achieve greater earnings. A levy of tax may ultimately translate to increased costs for the end users. Taxina operates under Saas model for mere lead generation without any further involvement in the actual delivery of the passenger transportation service to customers and transportation services supplied by drivers are not supplied through it and hence Taxina is not liable to pay tax under section 9 (5) of CGST Act. Taxina operates on a subscription base model that allows drivers to retain their entire earnings, providing them with greater financial stability. By eliminating the burden of trip-based commission fee, Taxina enables drivers to achieve greater earnings. A levy of tax may ultimately translate to increased costs for the end users. Taxina operates under Saas model for mere lead generation without any further involvement in the actual delivery of the passenger transportation service to customers and transportation services supplied by drivers are not supplied through it and hence Taxina is not liable to pay tax under section 9 (5) of CGST Act Issue a comprehensive circular highlighting the criteria and indicative factors for inclusion under the subscription model and clarifying that electronic commerce operators functioning under the subscription model are not engaged in provision of passenger transportation services through the electronic commerce platform and consequently are not liable to discharge tax liability under section 9(5) of CGST Act 7 End Mile Connecti-vity Federation 21/10 End Mile Connectivity Federation is a not-for-profit company owned by Pune's Rickshaw Association and operates "O Rickshaw," a mobility software solution specifically designed for auto-rickshaw drivers in Pune and is zero-commission, direct-to-driver model. There are two primary models in the ride-hailing ecosystem: Aggregator Platforms and SaaS Models. SaaS-based models, like O Rickshaw, merely facilitate connections between drivers and passengers without controlling any part of the transaction which has been recognized in various Authority for Advance Rulings (AAR) such as in the case of Multi-Verse Technologies Private Limited, Juspay Technologies Pvt Ltd and Natural Language Technology Research. Classifying innovative, home grown SAAS models like O Rickshaw alongside foreign-owned aggregators such as Uber for taxation purposes would place an undue burden on domestic startups. Considering the significant distinctions between traditional aggregator models and SaaS-based platforms like O Rickshaw, it is important to adopt a nuanced approach in evaluating the applicability of GST under Section 9(5) of the CGST Act, 2017. Traditional aggregators are heavily involved in the entire service process—justifying their GST liability but SaaS-based platforms like O-Rickshaw simply provide the technology for connecting drivers and passengers without exerting control over key elements. The extent of GST applicability should be determined by the platform’s degree of control and its operational structure. Given that O Rickshaw functions on a commission-free, non-intrusive model, applicability of Section 9(5) be clarified in line with the referred AAR Rulings. 8 NASSCOM 28/10 NASSCOM represent a holistic view of the industry, given the matter is in the court and government has directly asked the companies to provide facts of their model, it would be prudent not to explain their individual models. Over the years, various models of ride hailing platforms have emerged and there are advance rulings obtained by some of the service providers to contest the applicability of GST provisions to their models. Perhaps, when the tax concept was introduced in 2014, the possible evolution of different models of ride and their possible incompatibility/ concerns with the GST obligations was not envisaged. The varying interpretations offered through different advance rulings regarding the taxability of transportation services has created uncertainty, making it challenging to plan future operations with any degree of tax certainty, particularly at a pan India level. Feasibility of implementing the provision of 9(5), for certain models needs to be evaluated as also the question as to how an ecommerce operator can discharge the liability u/s 9(5) if it does not even have the ability to collect the ride fare, as part of its operating model. Effect of the tax policy should be holistic and it should not distort the market. Just because an ecommerce operator is providing additional set of services to the rider and has built its operating model and invested in infrastructure to support the same – should such an ecommerce operator be made liable u/s 9(5), unintentionally, making such a model less attractive to the drivers and riders – purely on account of the GST arbitrage? It is requested to consider a position that is in the larger interest of the industry and ultimately the consumers. 9 Driver’s associations or Taxi Unions 14/10, 28/10, 07/11, 09/11, 11/11, 13/11 In the traditional App based model, passengers use a mobile application to request rides, view available drivers nearby, estimated fare, expected arrival time. Fares are typically calculated by platform through the App, it facilitates communication between drivers and passenger for coordination, undertakes ride monitoring, issue invoice etc. Payments are generally collected through App and settlement of driver partner happens after a time interval. Platform deducts commission on per ride basis. In recent times, subscription-based model has addressed most of the issues faced by driver partners. It is requested to clarify that E-commerce operators shall not be liable to discharge GST on ride hailing services provided under subscription model Agenda Item 3(v): Clarification regarding requirement of reversal of input tax credit by electronic commerce operators in respect of supplies made under section 9(5) of CGST Act, 2017. Representations have been received seeking clarification regarding reversal of input tax credit by electronic commerce operators (ECOs) in cases where services, specified under section 9(5) of Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”), are supplied through their platform. It has been represented that certain field formations are taking a view that such ECOs need to reverse ITC in respect of services notified under section 9(5) of CGST Act (other than restaurant services) on the ground that no circular has been issued in respect of other services notified under the said section on the lines of circular No. 167/23/2021-GST, dated 17.12.2021, issued in case of restaurant service. 2. Background i.Under section 9(5) of the CGST Act, the Central Government has been empowered to specify categories of services on which the tax shall be paid by the ECO if such services are supplied through it as if he is the supplier liable for paying the tax in relation to the supply of such services. ii.The following categories of services have been specified by Notification No. 17/2017-Central Tax (Rate), dated 28.06.2017 (as amended): a.services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab, motor cycle, or any other motor vehicle except omnibus b. services by way of transportation of passengers by an omnibus except where the person supplying such service through electronic commerce operator is a company. c. services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said CGST Act d.services by way of house-keeping, such as plumbing, carpentering etc., except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said CGST Act e.supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises. iii.Vide circular No 167/23/2021-GST, dated 17.12.2021, a clarification was issued in respect of restaurant services on various modalities of compliance to the GST laws in respect of supply of restaurant services through ECOs. The issue involved in the instant case has been clarified in the aforesaid circular. Relevant extract is reproduced as under: S. No. Issue Clarification 6 Would ECOs be liable to reverse proportional input tax credit on his input goods and services for the reason that input tax credit is not admissible on 'restaurant service'? ECOs provide their own services as an electronic platform and an intermediary for which it would acquire inputs/input service on which ECOs avail input tax credit (ITC). The ECO charges commission/fee etc. for the services it provides. The ITC is utilised by ECO for payment of GST on services provided by ECO on its own account (say, to a restaurant). The situation in this regard remains unchanged even after ECO is made liable to pay tax on restaurant service. ECO would be eligible to ITC as before. Accordingly, it is clarified that ECO shall not be required to reverse ITC on account of restaurant services on which it pays GST in terms of section 9(5) of the Act. It may also be noted that on restaurant service, ECO shall pay the entire GST liability in cash (No ITC could be utilised for payment of GST on restaurant service supplied through ECO) 3. Request of the taxpayer i.Some of the audit officers are taking a view that ECOs (other than supply of restaurant service) are required to reverse the ITC to the extent of the liability under section 9(5) of the CGST Act, 2017 on the grounds that such turnover is akin to exempt supplies. ii.Circular No. 167 / 23 /2021 – GST dated 17 December 2021 issued in the context of restaurant services which clarifies that ‘ECOs’ providing restaurant services are not required to reverse ITC. However, the circular is limited to the said service only. iii.As per the provisions of the CGST Act and the Rules made thereunder, ECOs are eligible to claim ITC only for the services provided on its own account viz. commission/ service fee earned for providing electronic platform. iv.Therefore, they have requested that a similar circular may be issued clarifying that there is no requirement to reverse ITC, for all ECOs required to pay tax under section 9 (5) of the CGST Act, 2017 4. Relevant Legal Provision i.Section 2(47) of the CGST Act defines exempt supply to mean supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply; ii.Section 9(5) of CGST Act deals with taxability of supply of specified category of services which are provided through electronic commerce operator. The provision reads as under: “(5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: …” iii.Section 16 of CGST Act provides eligibility and conditions for taking input tax credit. Relevant provisions are as under: “(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) …..” 5. Examination: i.The matter has been examined in light of relevant legal provisions along with the said circular. It is observed that section 16 provides that ITC can be taken by the registered person on supply of goods or services or both to him which are used or intended to be used in the course of furtherance of his business. Further, it is observed that section 9(5) of CGST Act only shifts the liability of tax payment from actual supplier of the specified services to ECOs if such services are supplied through it, (even though ECO is not an actual supplier). ii.In the present matter, ECOs offer platform services to facilitate supplies by actual suppliers of services under Section 9(5) of the CGST Act, such as restaurant services, transportation of passenger services, etc. In doing so, ECOs procure and use inputs and input services (e.g., technology infrastructure and software) to operate their platform. ECOs, as registered taxpayers under section 16 of the CGST Act, subject to provisions of section 17 (5) are eligible to claim Input Tax Credit (ITC) on inputs and input services used in the course or furtherance of their business, including the provision of platform services. iii.The above circular issued in respect of restaurant services also specifically distinguishes between the platform services provided by ECO as an intermediary to restaurant and the restaurant services provided through the platform for which the ECO charges commission/fee etc. Thus, ITC is utilised by ECO for payment of GST on services provided by ECO on its own account itself and therefore, the ECO is not required to reverse the ITC on inputs and input services used for supplying such services on his own account. iv.It is observed that Section 17(2) of the CGST Act, 2017 provides that where the goods or services are used partly for effecting taxable supplies (including zero rated) and partly for exempt/ non-business use then the amount of credit as attributable to exempt supplies or non- business use shall be reversed. Further, it is observed that in accordance with section 2(47) of the CGST Act, exempt services would mean services which are either exempted from tax or which attracts Nil rate of duty. It also includes non-taxable supplies. From the above definition, it is evident that the services, specified under section 9(5) of the CGST Act, would not fall under category of exempted supplies for the ECOs and therefore, the ECOs will not be required to reverse ITC in respect of supply of services under section 9(5) of the CGST Act. v.Accordingly, it is clear that ECOs providing a platform for the supply of services notified under Section 9(5) of the CGST Act are not obligated to reverse the Input Tax Credit availed by them in relation to the inputs and input services used to facilitate such supplies. The ECO, acting as an intermediary, is entitled to retain the ITC on inputs used for providing its own taxable service, and is not required to reverse the ITC on inputs used in connection with the supplies made by the actual service providers through his platform. vi.ECOs will be required to pay the full tax liability on account of supplies under section 9(5) of the CGST Act, only through electronic cash ledger and the credit availed by them in relation to the inputs and input services used to facilitate such supplies cannot be used for discharge of such tax liability under section 9(5) of the CGST Act. However, such credit can be utilized by them for discharge of tax liability in respect of supply of services on their own account. 6. The matter was deliberated by the Law Committee in its meetings held on 06.12.2024 and 07.12.2024 wherein the Law Committee recommended to issue a clarification through a circular, on the above lines. Draft circular as recommended by the Law Committee is enclosed as Annexure A to this agenda. 7. The agenda note is placed before the GST Council for deliberation and approval. Annexure A Circular No. X/X/2024-GST F. No. CBIC-2000X/X/2024-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, dated……, 2024 To, The Principal Chief Commissioners/ Chief Commissioners of Central Tax (All) The Principal Directors General/ Directors General (All) Madam / Sir, Sub: Clarification in respect of input tax credit availed by electronic commerce operators where services specified under Section 9(5) of CGST Act are supplied through their platform -reg. Reference is invited to Circular No. 167/23/2021 – GST dated 17.12.2021 issued which clarified that electronic commerce operators (hereinafter referred to as “ECOs”) required to pay tax under section under section 9(5) of the Central Goods and Services Tax Act 2017 (hereinafter referred to as “CGST Act”) are not required to reverse input tax credit (ITC) where they are providing their platform for supply of restaurant service (notified service under section 9 (5)). In this regard, representations have been received seeking clarification regarding requirement of reversal of ITC, if any, in respect of supply of services other than restaurant services under section 9(5) of CGST Act. 2. The issue has been examined and to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act, hereby clarifies the issue as below: S. No Issue Clarification 1. Whether electronic commerce operator, required to pay tax under section 9(5) of CGST Act, is liable to reverse proportionate input tax credit on his inputs and input services to the extent of supplies made under section 9(5) of the CGST Act. 1.ECO, required to pay tax under section 9(5) of CGST Act, is making supplies under two counts: i.Supplies notified under section 9 (5) for which he is liable to pay tax as if he is the supplier of the said services. ii.Supply of his own services by providing his electronic platform for which he charges platform fee /commission etc. from the platform users. 2.For providing the services mentioned at 1 (ii) above, the ECO procures inputs as well as input services for which he avails Input Tax Credit. 3.It has been clarified vide question no. 6 of Circular No. 167/23/2021 – GST dated 17.12.2021 that the ECO shall not be required to reverse input tax credit on account of restaurant services on which he pays tax under section 9(5) of the CGST Act. It has also been clarified that the input tax credit will not be allowed to be utilized for payment of tax liability under section 9(5) and, whole of the tax liability under section 9(5) will be required to be paid in cash. 4.The principle which has been outlined in question no. 6 of Circular No. 167/23/2021 – GST dated 17.12.2021 also applies to supplies made in respect of other specified services under section 9(5) of CGST Act. 5.In view of this, it is clarified that Electronic Commerce Operator who is liable to pay tax under section 9 (5) of the CGST Act in respect of specified services is not required to reverse the input tax credit on his inputs and input services, proportionately under section 17(1) or section 17(2) of CGST Act to the extent of supplies made under section 9(5) of the CGST Act. 6. It is further clarified that ECO will be required to pay the full tax liability on account of supplies under section 9(5) of the CGST Act, only through electronic cash ledger and the credit availed by him in relation to the inputs and input services used to facilitate such supplies cannot be used for discharge of such tax liability under section 9(5) of the CGST Act. However, such credit can be utilized by him for discharge of tax liability in respect of supply of services on his own account. 3.It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 4.Difficulty, if any, in implementation of this Circular may be brought to the notice of the Board. Hindi version would follow. (Sanjay Mangal) Principal Commissioner (GST) Agenda Item 3(vi): Amendment in Rule 89 of CGST Rules, 2017 for providing the scope and computation of the refund on account of inverted duty structure as provided in sub-section (3) of section 54 of CGST Act, 2017. References were received from the Fertilizer Association of India requesting for clarification regarding scope and computation of refund on account of inverted duty structure under sub-section (3) of section 54 of CGST Act, 2017, in cases where subsidies are granted by the Central and the State Governments in respect of outward supplies, as some of the filed formations are denying refunds in such cases on various grounds. 2. The matter was deliberated by the Law Committee and based on the recommendations of the Law Committee, an Agenda Note on clarification on the scope and computation of the refund on account of inverted duty structure was placed before GST Council in its 50th meeting held on 11.07.2023 as Issue 5 in Agenda Item 3 (vi) for deliberation. After deliberations in the said meeting of the GST Council, the Council referred the matter back to the Law Committee for re-examination based on the existing provisions of the law and after taking inputs from State of Karnataka also. 3. Accordingly, inputs were sought from State of Karnataka, who have stated inter alia that: 3.1 Accumulation of credit in the input tax credit ledger (electronic credit ledger) can happen in the following cases: i.The rate of tax on the outward supplies being lesser than the rate of tax on the inputs. In these cases, the input tax credit would remain unutilised even after utilising the same to pay the entire tax on outward supplies (This is known as “inverted tax structure”). ii.In case of exports, where the outward supplies are zero-rated and since there is no tax payable, the input tax credit gets accumulated and remains unutilised (zero-rated supplies). iii.In case where the value of outward supplies itself is lesser than the value of inward supplies. Here there would be accumulation of input tax credit even after the payment of output tax. 3.2 The provisions of Section 54 (3) of GST Act provide for refund of amounts out of input credit ledger due to inverted tax structure and zero-rated supplies, i.e. cases covered by 3.1 (i) and 3.1 (ii) above. There is a positive bar on the refund of all accumulated input tax credit other than the zero-rated supplies and inverted tax structure. 3.3 It is also pertinent to note that during discussion, reference was made to the Rule 89(5) of the CGST Rules as well. The said Rule relates to Maximum Refund Amount and not to the actual refund amount. Hence this does not override the provisions of Act nor qualifies the amount of accumulated input tax credit on account of the value of outward supplies being lesser than the value of inward supplies. 3.4 Further, in the pertinent case, the accumulation of input tax credit in case of Fertilizer manufacturing companies is occurring on account of the following: i.The rate of tax on the outward supplies being lesser than the rate of tax on the inputs. In these cases, the input tax credit would remain unutilized even after utilizing the same to pay the entire tax on outward supplies (This is known as “inverted tax structure”). ii.In case where the value of outward supplies itself is lesser than the value of inward supplies. Here there would be accumulation of input tax credit even after the payment of output tax. 3.5 In these cases, only the accumulated ITC on account of inverted tax structure is refundable (3.4 (i) above) and the accumulated ITC on account of reduction in the value (3.4 (ii) above) is not refundable. The reduction in the value of outward suppliers is happening on account of subsidies provided by the Government and as per Section 15(2) (e) of CGST Act, 2017, amount of subsidies which affect the price is not a part of the value of supplies. 3.6 The State of Karnataka has already issued notices and also passed adjudicating orders restricting the refunds only to the accumulated input tax credit on account of inverted tax structure and not allowed refund of accumulated input tax credit on account of reduction of value. 3.7 Various Case laws were also cited by the State of Karnataka in support of the fact that unless the words are ambiguous, the words in the notification should be literally interpreted and not otherwise. A statutory enactment must ordinarily be construed according to the plain natural meaning of its language and no words should be added, altered or modified unless it is plainly necessary to do so in order to prevent a provision from being unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute. The State of Karnataka thus proposed to clarify that no refund of accumulated input tax credit on account of reduction of value is allowable as per the present provisions of the GST Law. 4. In view of the comments received from State of Karnataka, the matter was examined afresh as discussed in the following paragraphs. 4.1 Clause (ii) of first proviso to section 54(3) of CGST Act states inter alia that the refund of unutilized ITC shall be allowed only when the credit has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies. Relevant extract of section 54 of the CGST Act, 2017 is as under: (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: 4.2 Therefore, for refund of ITC on account of inverted duty structure, the primary condition that is to be met is that the rate of tax on inputs should be higher than the rate of tax on output supplies. Once this condition is met, the person becomes eligible to claim refund of accumulated ITC on account of inverted rated supplies, which shall be sanctioned in accordance with the formula prescribed in Rule 89 (5) of the CGST Rules, 2017. 4.3 However, there may be cases where in addition to the accumulation of input tax credit on account of inverted rated supplies, a person may have accumulated Input Tax Credit because of other factors also such as stock accumulation, trade discounts, predatory pricing, distress sale, subsidies granted by Central or State Government etc. Such a taxable person would have accumulation of input tax credit both on account of rate of tax on inputs higher than output supplies as well as the other factors mentioned above. 4.4 Reference may be drawn to the judgment of Hon’ble Supreme Court in Union of India vs. M/s. VKC Footsteps {(2021) 52 G.S.TL 513 (SC)}, in which it was interpreted by the Apex Court that Clause (ii) of the first proviso to section 54(3) of CGST Act is not merely a condition of eligibility for availing of a refund but a substantive restriction under which a refund of unutilized ITC can be availed of only when the accumulation is relatable to an inverted duty structure, namely the tax on input goods being higher than the rate of tax on output supplies. The relevant extract is reproduced as under: “55……………….. ……. While enacting Clause (ii) of the first proviso to Section 54(3) in the CGST Act, Parliament, took legislative notice of a specific eventuality namely “where the credit has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies”. Parliament would be cognizant of the fact that ITC may accumulate for a variety of reasons, of which an inverted duty structure is one situation. Parliament was legislating to provide for a refund and therefore restricted it to the two situations spelt out in clauses (i) and (ii) of the first proviso. The opening words of the substantive part of Section 54(3) contemplate a claim of refund of “any unutilized input tax credit”. Undoubtedly, any unutilized ITC would include credit on account of tax charged on any supply of goods or services or both. The opening sentence of Section 54(3) provides for (i) a claim of refund by a registered person; (ii) of any unutilized input tax credit; (iii) at the end of any tax period. But the impact of the first proviso, as its opening words indicate, is that : (i) “No refund” of unutilized ITC “shall be allowed” “in cases other than” (i) and (ii); (ii) The expression “claim” in the substantive part must be distinguished from the phrase “shall be allowed” in the opening sentence of the first proviso. Likewise, the expression “may claim refund” in the opening part must be distinguished from “no refund” in the opening part of the first proviso; (iii) The impact of the first proviso is that a refund of unutilized ITC shall be allowed only in cases falling under (i) and (ii). The expression ‘only’ in the previous sentence is not a judicial addition to statutory language but follows plainly from the expressions “no refund” of unutilized ITC shall be allowed “in cases other than”; (iv) The expression “in cases other than” is a clear indicator that clauses (i) and (ii) are restrictive and not conditions of eligibility. A refund, in other words, can be allowed in the two contingencies spelt out in clauses (i) and (ii) of the first proviso; (v) There is a clear distinction between clause (i) and clause (ii) of the first proviso: (a) in the case of exports, the contingency is zero-rated supplies without any distinction between input goods or input services; (b) in contrast for domestic supplies, clause (ii) relates to the accumulation of credit on account of rate of tax on inputs being higher than the rate of tax on output supplies; (vi) The legislative draftsperson has made a clear distinction between clause (i) and clause (ii) of the first proviso and it was in this context that the opening words of Section 54(3) have used the expression “may claim refund of any unutilized ITC”; (vii) Explanation 1 to Section 54, while defining the expression “refund” for the purposes of the section adopts an inclusive definition covering (a) refund of tax paid on zero rated supplies of goods or services or both; (b) refund of tax paid on input goods or inputs services used in making such zero-rated supplies; (c) refund of tax on supply of goods regarded as deemed exports; and (d) refund of unutilized ITC as provided under sub-section (3) of Section 54; and (viii) Explanation 1 indicates that with reference to exports, the Legislature has brought within its fold ITC on input goods and input services. In contrast, in the case of domestic supplies it has contemplated refund of unutilized ITC “as provided under sub-section (3)”. The Explanation is a clear indicator that in respect of domestic supplies, it is only unutilized credit which has accumulated on the rate of tax on input goods being higher than the rate of output supplies of which a refund can be allowed. Clause (ii) of the first proviso in other words is a restriction and not a mere condition of eligibility. 69. ……… Clause (ii) of the proviso, when it refers to “on account of” clearly intends the meaning which can ordinarily be said to imply ‘because of or due to’. When proviso (ii) refers to “rate of tax”, it indicates a clear intent that a refund would be allowed where and only if the inverted duty structure has arisen due to the rate of tax on input being higher than the rate of tax on output supplies.……………” 4.5 Thus, applying the ratio of the above judgment, it would imply that clause (ii) of the proviso to sub-section 3 of section 54 is a restriction which would mean that refund would be restricted to only that portion where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. Any credit accumulation on account of any other factor would not be eligible for refund under clause (ii) of the proviso to sub-section 3 of section 54. 4.6 It may also be noted that that to simplify the mechanism for calculation of maximum refund amount in cases involving inverted rated supplies, a formula has been prescribed under rule 89(5) of CGST Rules, based on the recommendations of the GST Council. The refund is being sanctioned in such cases involving inverted rated structure based on minimum of (i) the amount as per the said formula under rule 89(5); (ii) the amount of unutilized input tax credit at the end of the relevant tax period; and (iii) the amount of unutilized input tax credit on the date of filing the said refund application. The definitions of various terms used in the formula under rule 89(5) have also been defined in the Explanation to the said sub-rule. No other mechanism or formula has been presently prescribed to calculate the refund amount in a case involving inverted rated structure, other than the manner prescribed under rule 89(5) of CGST Rules. Accordingly, at present, neither the CGST Act nor the CGST Rules—including the formula prescribed in sub-rule (5) of Rule 89 of the CGST Rules—provide any mechanism for the removal of ITC attributable to factors such as stock accumulation, trade discounts, predatory pricing, distress sales, or subsidies granted by the Central or State Government while calculating the amount of refund admissible under section 54, read with sub-rule (5) of Rule 89, in cases involving inverted rated structure. 4.7 Moreover, it is also worth mentioning that in such cases involving inverted rated structure, where accumulation of input tax credit is also on account of other factors such as stock accumulation, trade discounts, predatory pricing, distress sale, subsidies granted by Central or State Government etc., it may be very difficult to bifurcate or ascertain the proportion of accumulation of ITC owing to only rate of tax on inputs being higher than rate of tax on output supplies, out of the total accumulated ITC, as no one to one correlation has been prescribed in such cases. Further, no standard input output norms (SION) are provided or prescribed upon to calculate refund in such cases. Therefore, under the present provisions of the GST law, a formula based approach, as provided in rule 89(5) of CGST Rules, has been adopted to sanction refunds. In cases involving inverted rated structure, where subsidy is also being provided by the Central or the State Governments, the accumulation of input tax credit may also be on account of such subsidies, but the present formula does not distinguish between the ITC accumulated due to subsidies vis-à-vis ITC accumulated due to inversion in rate of taxes of inputs and output supplies, and hence, there is a possibility that refund of accumulated ITC owing to subsidy is also being included in the refund claim amount. 4.8 It is felt that for the past period, adopting any artificial approach to modify the formula under rule 89(5) of CGST Rules to calculate amount of permissible refund in cases involving inverted rated structure, including interpreting definitions of “Net ITC” or Turnover in the said formula in a manner different from the one provided in the Explanation to the said sub-rule, may not be legally sound and correct. 5. The matter was deliberated by the Law Committee in its meetings held on 23.10.2024 and 13.11.2024. The Law Committee was of the view that the formula under rule 89(5) of CGST Rules may be amended prospectively so as to exclude such refund on account of ITC attributable to the subsidies from the total refund amount to be sanctioned under rule 89(5) of the CGST Rules, which would ensure that no refund is granted in respect of the ITC which has accumulated due to subsidy. Law Committee also observed that since the existing formula under Rule 89(5) of the CGST Rules did not provide any mechanism for the exclusion of ITC attributable to subsidies granted by the Central or State Government from the maximum refund amount, retrospective amendment of formula under rule 89(5) of CGST Rules may not withstand judicial scrutiny and accordingly, may not be desirable. 6. The Law Committee noted that the subsidies provided by the Central Government and State Governments are not included in the value of taxable supply as per clause (e) of sub-section (2) of section 15 of CGST Act, 2017 and hence at present, the subsidy amount on the outward supplies is not included in both “turnover of inverted rated supply of goods and services” as well as "Adjusted Total Turnover" in the formula prescribed under rule 89(5) of CGST Rules. To ensure that such ITC, accumulated due to subsidies, is not monetized by claiming a refund under the inverted duty structure, Law Committee recommended that a non-obstante clause may be inserted as sub-rule 6 of rule 89 and the explanation to sub-rule (5) of rule 89 may be omitted as follows (in red): “Rule 89… (5)… Explanation: - (1) For the purposes of this sub-rule, the expressions – (a) "Net ITC" shall mean input tax credit availed on inputs during the relevant period; and (b) “Adjusted Total turnover" and "relevant period" shall have the same meaning as assigned to them in sub-rule (4). “6. Notwithstanding anything contained in sub-rule (5), in cases where subsidies have been provided by the Central Government and the State Governments, and the value of taxable supply does not include such subsidies provided by the Central Government and the State Governments, as per clause (e) of sub-section (2) of section 15, the refund of input tax credit on account of inverted duty structure shall be granted as per the following formula:- Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services + Amount of subsidies on inverted rated supply) x Net ITC ÷ (Adjusted Total Turnover + Total Amount of subsidies)} - {(tax payable on inverted rated supply of goods and services including amount of subsidies) x (Net ITC ÷ ITC availed on inputs and input services)}. Explanation: - For the purposes of sub-rule (5) and sub-rule (6), the expressions – (a) "Net ITC" shall mean input tax credit availed on inputs during the relevant period; (b) “Adjusted Total turnover" and "relevant period" shall have the same meaning as assigned to them in sub-rule (4); (c) “Amount of subsidies on inverted rated supply” shall mean the amount of subsidies provided by the Central Government and the State Governments which have not been included in the value of inverted rated supply of goods and services as per clause (e) of sub-section (2) of section 15; (d) “Total Amount of subsidies” shall mean the total amount of subsidies provided by the Central Government and the State Governments which have not been included in the value of taxable supplies as per clause (e) of sub-section (2) of section 15; and (e) “tax payable on inverted rated supply of goods and services including amount of subsidies” shall mean the amount of tax that would have been payable on inverted rated supply of goods and services if the amount of subsidies provided by the Central Government and the State Governments was included in the value of inverted rated supply of goods and services”. 7. Such amendment in CGST Rules will address the issue where the ITC accumulated also include the accumulation due to subsidies provided by Central and State Governments, in addition to inverted rated structure. The said changes may be explained using illustrative values of Subsidy amount, Adjusted Total Turnover, Inverted rated supply and ITC on inputs and ITC on input services, as per the chart given below: Scenario 1 Scenario 2 Scenario 3 Subsidy amount 600 900 1200 Adjusted total turnover 1000 1000 1000 Inverted rated supply 900 900 900 Tax payable @5% on inverted rated supply 45 45 45 ITC on inputs and input services 500 500 500 Net ITC i.e. ITC on inputs 450 450 450 Scenario Maximum Refund amount If no adjustment i.e. present formula 364.5 364.5 364.5 If inverted rated supplies and adjusted total turnover are calculated after including subsidy amount in them. Tax payable on inverted rated supplies will also be calculated accordingly. 354.37 345.31 335.04 8. The agenda note is placed before the GST Council for deliberation and approval. *** Agenda Item 3(vii): Miscellaneous proposals for amendment of the CGST Act, 2017. Law Committee has recommended various amendments in the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act”). 2. The details of the proposed amendments are as given below: I. Amendment in section 107(6) and section 112(8) of CGST Act, 2017 to provide for payment of pre-deposit for filing an appeal in respect of an order demanding penalty amount without any demand of tax-reg References have been received from tax authorities regarding non-availability of a provision for pre-deposit for filing appeal in Appellate Tribunal in respect of an order passed under sub-section (3) of section 129 of CGST Act, 2017. Besides, it has also been mentioned that there may also be need for a general provision under section 107(6) and 112(8) of CGST Act, 2017 for pre-deposit for filing appeal in cases where no demand of tax is involved and only penalty amount has been demanded. 2. The relevant legal provisions of CGST Act, 2017 are as under: 2.1 Section 107. Appeals to Appellate Authority. - (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. … (6) No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been filed; Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant. … 2.2 Section 112. Appeals to Appellate Tribunal. — (1) Any person aggrieved by an order passed against him under section 107 or section 108 of this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act may appeal to the Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal. ….. (8) No appeal shall be filed under sub-section (1), unless the appellant has paid–– (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been filed. … 2.3 Section 129. Detention, seizure and release of goods and conveyances in transit. — … (3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1) … 3.1 The Law Committee deliberated on the matter in its meeting held on 06.12.2024. The Law Committee observed that there is already a provision in sub-section (6) of section 107 of CGST Act for pre-deposit for filing appeal with Appellate Authority against the order passed under section 129(3) of CGST Act. But no similar provision is available in sub-section (8) of section 112 to provide for payment of pre-deposit for filing an appeal before the Appellate Tribunal against an order passed under section 107 or section 108 in respect of an order passed under sub-section (3) of section 129. 3.2 The Law Committee also observed that there may be some cases where no tax demand is raised by adjudicating officer and only penalty is imposed. For such cases, no requirement of pre-deposit for filing appeal before Appellate Authority and Appellate Tribunal is presently available in the existing provisions of CGST Act. This may lead to filing of frivolous appeals in such cases. Law Committee, therefore, felt that there may be a need for inserting a specific provision for requirement of pre-deposit in cases involving demand of penalty without involving any demand of tax, for the purpose of filing appeal before Appellate Authority and Appellate Tribunal. In such a scenario, the existing proviso to section 107(6) of CGST Act providing for requirement of pre-deposit in cases involving an order under section 129(3) of CGST Act may not be separately required. 3.3 The Law Committee further observed that as per recommendations of the GST Council, amendment has already been made in clause (b) of sub-section (6) of section 107 of CGST Act and in clause (b) of sub-section (8) of section 112 of CGST Act for rationalization of amount of pre-deposit in case of filing of appeal before the Appellate Authority and the Appellate Tribunal respectively, vide Finance (No.2) Act 2024, made effective from 01.11.2024, as per which now the amount of pre-deposit is only ten per cent of the disputed amount of tax. In view of this, there may be a need to align the amount of pre-deposit in the proposed provisions for cases involving penalty without involving demand of any tax with the amount of pre-deposit in the existing provisions in respect of cases involving tax. 3.4 In light of the above, Law Committee recommended that the proviso to section 107(6) of CGST Act, 2017 (providing for the pre-deposit for filing appeal against the order passed tax, section 129(3) of CGST Act) may be omitted, and in place of it, proviso may be inserted in section 107(6) to provide for requirement of pre-deposit for filing appeals with Appellate Authority against an order involving demand of penalty without involving demand of any tax, as follows: 107(6) “Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five percent of the penalty has been paid by the appellant.” “Provided that where an order has been issued demanding penalty without involving demand of any tax, no appeal shall be filed against the said order, unless a sum equal to ten percent, of the said penalty has been paid by the appellant.” 3.5 Law Committee also recommended that a similar proviso may also be inserted in section 112(8) of CGST Act to provide for requirement of pre-deposit for filing appeals with Appellate Tribunal against an order involving demand of penalty without involving demand of any tax, as follows: 112(8) “Provided that where an order has been issued demanding penalty without involving demand of any tax, no appeal shall be filed against the said order, unless a sum equal to ten percent of the said penalty, in addition to the amount paid under proviso to sub section (6) of section 107 has been paid by the appellant.” 3.6 The Law Committee further recommended that para 15 of Form GST APL-01 and para 14 of Form GST APL-05 may be amended accordingly, as per Annexure-A enclosed with this agenda note. Annexure-A Form GST APL-01 15. Details of payment of admitted amount and pre-deposit; - (a) Details of payment required Particulars Central tax State tax/UT tax Integrated tax Cess Total amount (a)Admitted amount Tax/cess
Confidential
Agenda for
55th GST Council Meeting
21st December, 2024
Volume - II
GST Council Secretariat New Delhi
5th Floor, Tower-II, Jeevan Bharti Building, New Delhi
15th November, 2024
OFFICE MEMORANDUM
Subject: Notice for the 55th GST Council Meeting to be held on 21st December, 2024-reg
The undersigned is directed to refer to the above subject and to convey that the 55th Meeting of the GST Council will be held on 21st December, 2024 at Jaisalmer, Rajasthan. The schedule of the meeting is as follows:-
Saturday, 21st December, 2024, from 11.00 A.M. onwards
2. In addition, an Officers’ Meeting will be held on 20th December, 2024 at Jaisalmer, Rajasthan as per the following schedule:
Friday, 20th December, 2024 from 10.00 A.M. onwards
3. The venue of the meeting, agenda items and other details for the 55th Meeting of the GST Council and officers’ Meeting will be communicated in due course of time.
4. Kindly convey the invitation to the Hon’ble Member of the GST Council to attend the 55th Meeting of the GST Council.
Sd/-
(Sanjay Malhotra)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653
Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.
2. PS to the Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.
3. The Chief Secretaries of all the State Governments, Union Territories of Delhi, Puducherry and Jammu and Kashmir with the request to intimate the Minister in charge of Finance/Taxation or any other Minister nominated by the State Government as a Member of the GST Council about the above said meeting.
4. Chairman, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the Council.
5. CEO, GST Network
TABLE OF CONTENTS
(VOLUME-II)
Sl. No. Agenda Item Page No.
7. DoR Agendas:
a) Review of revenue position under Goods and Services Tax 7-15
b) Status update on issues related to IGST Settlement to States 16-82
c) GSTAT Procedure Rules to regulate the procedure for functioning of the GSTAT 83-128
d) Relaxation in the eligibility criteria for selection to the post of Technical Member (State) of GSTAT for officers of the state of Goa. 129-130
e) Relaxation in eligibility conditions for appointment of Technical Member (State) in GSTAT for the State of Jharkhand 131-141
f) Status Report of GoM on restructuring Compensation Cess 142-144
8. Issues recommended by GSTN
a) B2C e-Invoicing 145
b) Successful Rollout of IMS 146
9. Performance Report of Competition Commission of India (CCI) along with Performance Reports of State Level Screening Committee (SLSC), Standing Committee (SC) and Directorate General of Anti-Profiteering (DGAP), for 2nd quarter of the F.Y 2024-25. 147-149
10. Ad-hoc Exemption Orders issued under section 25(2) of the Customs Act, 1962 to be placed before the Council for information 150-154
Any other agenda with the permission of the Chair
Discussion on Agenda Items
Agenda Item 7: DoR Agendas.
Agenda Item 7(a): Review of revenue position under Goods and Services Tax
GST Revenue performance
1.The Figure below shows the trend and Table 1 shows the details of the collection in Apr’24 – Nov’24 vis-à-vis Apr’23 – Nov’23.
Figure 1: Monthly gross GST collection (in ₹ lakh crore)
Table 1: Monthly gross GST collection (₹ crore)
GST Collection Apr’24 May’24 Jun’24 Jul’24 Aug’24 Sep’24 Oct’24 Nov’24
CGST 43,846 32,409 32,627 32,386 30,862 31,422 33,821 34,141
SGST 53,538 40,265 40,715 40,289 38,411 39,283 41,864 43,047
IGST 99,623 87,781 87,310 96,447 93,621 90,594 99,111 91,828
Domestic 61,797 47,902 47,270 49,437 44,593 46,087 54,878 50,093
Imports 37,826 39,879 40,040 47,009 49,028 44,507 44,233 41,736
Comp Cess 13,260 12,284 13,160 12,953 12,068 11,941 12,550 13,253
Domestic 12,252 11,207 12,188 11,923 11,120 11,059 11,688 12,398
Imports 1,008 1,076 972 1,029 948 883 862 855
Gross Collection 2,10,267 1,72,739 1,73,812 1,82,075 1,74,962 1,73,240 1,87,346 1,82,269
YoY Growth 12.4% 10.0% 7.6% 10.3% 10.0% 6.5% 8.9% 8.5%
Less – Refunds
(Domestic + Imports) 18,507 28,410 19,946
16,283
24,460
20,458
19,306 19,259
Net Collection
1,91,760
1,44,329
1,53,866
1,65,792
1,50,502
1,52,782
1,68,040 1,63,010
YoY Growth 15.5% 6.9% 6.3% 14.4% 6.5% 3.9% 7.9% 11.1%
2.Table 2 shows the IGST collected, refunded, and settled/apportioned during FY 2024-25 till Nov, 2024.
Table 2: IGST Collection/Settlement/Apportionment/Refund in FY 2023-24 & 2024-25
(Figures in Rs. Crore)
# Particulars 2023-24 2024-25 (as of Nov 2024)
1 Collections (+) 10,22,280 7,48,490
2 Recovery from IGST Ad-hoc apportionment (+) - -
3 Refunds (-) 1,46,730 1,15,841
4 Settlement (-) 8,99,067 6,59,406
i. CGST 4,87,039 3,54,754
ii. SGST 4,12,028 3,04,652
5 Ad-hoc Settlement (-) -18,000 -
i. CGST ad hoc -9,000 -
ii. SGST ad hoc -9,000 -
6 Net (1+2-3-4-5) -5,516 -26,757
Total as of date -32,273
*Source: Pr. CCA, CBIC (updated on 02-12-2024)
States Revenue Comparison
3. The State-wise details of comparison of SGST revenue and the post settlement SGST revenue (including ad-hoc settlement) for FY 2024-25 (April-Nov) as compared to FY 2023-24 (April-Nov) may be seen in the Table 3.
Table 3: State-wise Revenue Comparison (Apr-Nov) (FY 2024-25) vs (Apr-Nov) (FY 2023-24)
(Amount Rs. in Crore)
State Code State/UT Pre-settlement (Apr'23-Nov'23) Pre-settlement (Apr'24-Nov'24) SGST Growth (%) Post-Settlement (Apr'23-Nov'23) Post-Settlement (Apr'24-Nov'24) SGST Growth Post settlement (%)
1 Jammu and Kashmir 1,960 2,013 3% 5,367 5,932 11%
2 Himachal Pradesh 1,731 1,841 6% 3,701 4,178 13%
3 Punjab 5,612 6,129 9% 14,734 16,102 9%
4 Chandigarh 439 502 14% 1,505 1,576 5%
5 Uttarakhand 3,625 3,915 8% 5,586 6,275 12%
6 Haryana 13,415 15,468 15% 23,134 26,246 13%
7 Delhi 10,340 11,847 15% 21,037 24,028 14%
8 Rajasthan 11,348 12,017 6% 25,699 28,658 12%
9 Uttar Pradesh 21,624 23,376 8% 49,282 56,687 15%
10 Bihar 5,377 5,913 10% 16,991 18,735 10%
11 Sikkim 321 264 -18% 677 646 -5%
12 Arunachal Pradesh 418 361 -14% 1,276 1,188 -7%
13 Nagaland 206 186 -10% 701 699 0%
14 Manipur 229 249 9% 730 783 7%
15 Mizoram 182 189 4% 634 633 0%
16 Tripura 335 352 5% 1,037 1,139 10%
17 Meghalaya 394 407 3% 1,103 1,187 8%
18 Assam 3,885 4,206 8% 9,553 10,352 8%
19 West Bengal 15,600 16,025 3% 28,042 30,737 10%
20 Jharkhand 5,866 5,776 -2% 8,116 9,327 15%
21 Odisha 10,626 11,723 10% 15,515 17,253 11%
22 Chhattisgarh 5,398 5,692 5% 8,831 10,143 15%
23 Madhya Pradesh 8,496 9,043 6% 20,673 23,674 15%
24 Gujarat 27,671 30,000 8% 41,545 48,096 16%
25&26 Dadra and Nagar Haveli & Daman and Diu 426 497 17% 699 845 21%
27 Maharashtra 65,983 73,941 12% 96,551 1,12,174 16%
29 Karnataka 26,713 29,514 10% 48,766 54,922 13%
30 Goa 1,487 1,659 12% 2,616 2,873 10%
31 Lakshadweep 16 6 -60% 69 70 2%
32 Kerala 9,171 9,743 6% 20,623 21,792 6%
33 Tamil Nadu 27,046 30,282 12% 42,472 51,430 21%
34 Puducherry 330 363 10% 933 1,042 12%
35 Andaman and Nicobar Islands 140 140 0% 347 378 9%
36 Telangana 12,994 13,859 7% 26,691 29,186 9%
37 Andhra Pradesh 9,291 9,613 3% 20,952 21,998 5%
38 Ladakh 155 176 14% 457 528 15%
97 Other Territory 156 125 -20% 822 554 -33%
Grand Total 3,09,003 3,37,412 9% 5,67,464 6,42,064 13%
Trends in Return filing
4. The tables 4A and 4B shows the trend in return filing in FORM GSTR-3B and GSTR-1 respectively as on 01.12.2024 for return period April to October of FY 2023-24 and FY 2024-25. Tables 5 and 6 show the State wise filing for April to October of FY 2024-25.
Table 4A: Return filing GSTR-3B (%) as on 01.12.2024
Return Period FY 2023-24 FY 2024-25
Apr 99.4% 98.4%
May 98.7% 97.6%
Jun 99.1% 98.0%
July 99.0% 97.7%
Aug 98.3% 95.5%
Sep 99.3% 95.2%
Oct 99.0% 90.4%
Figure 2A: GSTR-3B Filing as on 01.12.2024
Table 4B: Return filing GSTR-1(%) as on 01.12.2024
Return Period FY 2023-24 FY 2024-25
Apr 99.3% 98.4%
May 98.6% 97.7%
Jun 99.3% 98.3%
July 98.9% 97.8%
Aug 98.3% 95.8%
Sep 99.4% 95.9%
Oct 98.9% 92.9%
Figure 2B: GSTR-1 Filing as on 01.12.2024
Table 5: State-wise Return filing (GSTR-3B) till 01.12.2024 (Apr’24-Oct’24)
S. No. State/UT Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24
1 Jammu and Kashmir 99.4% 98.5% 99.0% 99.0% 96.5% 96.3% 91.6%
2 Himachal Pradesh 98.9% 97.8% 98.3% 97.8% 94.6% 95.5% 91.2%
3 Punjab 98.8% 97.7% 98.3% 98.6% 96.2% 96.4% 91.7%
4 Chandigarh 99.8% 98.7% 99.2% 98.8% 97.6% 97.1% 93.6%
5 Uttarakhand 98.5% 95.9% 97.8% 97.7% 94.3% 94.5% 89.9%
6 Haryana 98.7% 98.3% 98.5% 98.2% 96.1% 96.2% 90.8%
7 Delhi 98.1% 97.0% 97.5% 97.5% 95.2% 94.7% 90.2%
8 Rajasthan 99.1% 98.1% 98.2% 98.5% 95.4% 96.1% 91.7%
9 Uttar Pradesh 98.4% 97.5% 98.0% 97.7% 95.6% 95.3% 91.3%
10 Bihar 96.5% 94.5% 96.3% 95.2% 90.9% 90.9% 86.1%
11 Sikkim 96.8% 90.1% 94.7% 94.0% 91.2% 89.9% 82.3%
12 Arunachal Pradesh 94.6% 94.4% 95.3% 94.7% 90.6% 87.4% 78.5%
13 Nagaland 96.8% 97.1% 96.5% 96.0% 93.5% 91.5% 85.1%
14 Manipur 95.4% 95.5% 95.3% 93.5% 79.3% 86.5% 73.2%
15 Mizoram 97.1% 96.2% 95.4% 94.5% 92.9% 92.0% 86.9%
16 Tripura 95.0% 97.2% 97.9% 97.3% 94.8% 94.8% 89.7%
17 Meghalaya 98.2% 96.8% 97.9% 96.6% 93.9% 92.3% 87.4%
18 Assam 95.0% 95.1% 96.1% 94.9% 91.9% 90.9% 84.1%
19 West Bengal 98.4% 96.9% 97.8% 97.5% 95.1% 95.2% 90.9%
20 Jharkhand 98.1% 97.5% 97.5% 96.7% 94.9% 93.3% 89.0%
21 Odisha 97.8% 96.8% 97.2% 97.0% 93.9% 94.0% 88.7%
22 Chhattisgarh 99.5% 98.5% 99.3% 98.6% 95.8% 95.5% 88.2%
23 Madhya Pradesh 98.7% 97.6% 98.5% 98.0% 94.9% 95.4% 90.5%
24 Gujarat 100.0% 99.4% 99.7% 99.7% 98.9% 98.8% 95.5%
25 Dadra and Nagar Haveli & Daman and Diu 98.8% 98.7% 98.6% 97.8% 96.6% 95.5% 89.8%
27 Maharashtra 98.7% 97.9% 98.4% 98.0% 95.6% 95.4% 89.5%
29 Karnataka 98.1% 97.6% 97.9% 97.3% 95.4% 94.3% 89.6%
30 Goa 98.9% 97.8% 98.1% 97.1% 94.3% 93.5% 87.4%
31 Lakshadweep 97.1% 95.3% 97.6% 98.1% 92.6% 89.0% 84.9%
32 Kerala 98.2% 97.9% 97.7% 97.3% 95.5% 94.1% 87.9%
33 Tamil Nadu 98.8% 98.3% 98.3% 98.2% 97.1% 96.3% 92.3%
34 Puducherry 98.0% 98.1% 97.7% 97.1% 94.9% 93.2% 87.4%
35 Andaman and Nicobar Islands 98.6% 97.4% 96.7% 95.7% 92.9% 90.1% 82.2%
36 Telangana 98.1% 97.3% 97.2% 96.7% 93.8% 92.8% 87.5%
37 Andhra Pradesh 97.8% 97.0% 97.1% 96.9% 94.9% 94.0% 88.8%
38 Ladakh 99.6% 96.6% 98.9% 97.3% 91.0% 92.1% 83.2%
97 Other Territory 81.3% 81.3% 83.3% 107.7% 113.8% 112.3% 97.8%
Total 98.4% 97.6% 98.0% 97.7% 95.5% 95.2% 90.4%
Table 6: State-wise Return filing (GSTR-1) till 01.12.2024 (Apr’24-Oct’24)
S. No. State/UT Apr-24 May-24 Jun-24 Jul-24 Aug’24 Sep’24 Oct’24
1 Jammu and Kashmir 99.4% 98.4% 99.2% 98.9% 96.7% 96.9% 93.4%
2 Himachal Pradesh 98.3% 97.6% 98.6% 97.5% 94.7% 96.3% 93.4%
3 Punjab 98.5% 97.7% 98.5% 98.6% 96.4% 97.1% 93.5%
4 Chandigarh 99.6% 98.8% 99.4% 98.9% 97.8% 97.8% 95.8%
5 Uttarakhand 98.2% 95.8% 98.2% 97.6% 94.5% 95.3% 92.1%
6 Haryana 98.6% 98.3% 98.7% 98.2% 96.4% 97.0% 93.7%
7 Delhi 97.9% 97.1% 97.8% 97.5% 95.5% 95.6% 92.9%
8 Rajasthan 98.6% 97.9% 98.4% 98.2% 95.4% 96.7% 93.7%
9 Uttar Pradesh 98.4% 97.6% 98.3% 97.8% 95.8% 96.0% 93.3%
10 Bihar 96.6% 94.6% 96.7% 95.3% 91.2% 91.7% 88.0%
11 Sikkim 96.6% 90.0% 95.1% 94.1% 91.6% 90.5% 85.1%
12 Arunachal Pradesh 94.7% 94.6% 95.6% 94.9% 91.2% 88.1% 80.8%
13 Nagaland 97.0% 97.4% 96.7% 96.3% 93.7% 92.2% 87.3%
14 Manipur 95.8% 95.7% 95.6% 93.9% 79.7% 87.3% 76.1%
15 Mizoram 97.2% 96.5% 95.9% 94.9% 93.3% 92.5% 88.6%
16 Tripura 95.1% 97.4% 98.2% 97.4% 95.1% 95.4% 92.1%
17 Meghalaya 98.0% 96.9% 98.1% 96.3% 94.2% 92.9% 89.1%
18 Assam 95.0% 95.2% 96.5% 95.2% 92.4% 91.9% 86.8%
19 West Bengal 98.4% 97.0% 98.0% 97.6% 95.5% 95.9% 93.0%
20 Jharkhand 98.2% 97.6% 97.7% 96.9% 95.3% 94.0% 91.2%
21 Odisha 97.8% 96.8% 97.4% 97.1% 94.1% 94.7% 90.8%
22 Chhattisgarh 99.3% 98.4% 99.5% 98.3% 95.9% 96.4% 91.0%
23 Madhya Pradesh 98.4% 97.5% 98.7% 97.9% 95.0% 96.1% 92.4%
24 Gujarat 99.7% 99.1% 99.9% 99.6% 99.0% 99.3% 97.4%
25 Dadra and Nagar Haveli & Daman and Diu 98.9% 98.9% 98.9% 98.1% 97.2% 96.7% 94.5%
27 Maharashtra 98.7% 98.0% 98.7% 98.2% 95.9% 96.3% 92.8%
29 Karnataka 98.2% 97.7% 98.2% 97.5% 95.8% 95.1% 92.1%
30 Goa 98.8% 97.9% 98.4% 97.4% 94.8% 94.4% 90.4%
31 Lakshadweep 97.6% 95.7% 97.6% 100.0% 93.1% 89.9% 86.3%
32 Kerala 98.4% 98.1% 98.0% 97.7% 96.1% 95.1% 91.6%
33 Tamil Nadu 98.9% 98.5% 98.6% 98.4% 97.5% 97.0% 94.8%
34 Puducherry 98.2% 98.3% 98.0% 97.5% 95.4% 94.2% 90.7%
35 Andaman and Nicobar Islands 98.7% 97.7% 97.2% 96.3% 93.5% 91.2% 85.6%
36 Telangana 98.3% 97.5% 97.5% 97.1% 94.3% 93.7% 90.1%
37 Andhra Pradesh 97.9% 97.2% 97.4% 97.2% 95.2% 94.7% 91.3%
38 Ladakh 99.3% 96.2% 99.1% 97.3% 91.5% 93.7% 86.0%
97 Other Territory 81.3% 81.3% 83.3% 107.7% 113.8% 112.3% 102.2%
Total 98.4% 97.7% 98.3% 97.8% 95.8% 95.9% 92.9%
5. Sector wise Revenue:
Sector wise Y-o-Y growth in Cash collections for top 30 sectors is given in the charts below:
Figure 3: Sector wise cash collection and growth (Top 10)
Figure 4: Sector wise cash collection and growth (Top 11-20)
Figure 5: Sector wise cash collection and growth (Top 21-30)
Table 7: Relative contribution of Sectors
Sectors Relative Contribution in Cash Collection
FY 25 (upto Oct 24) FY 24
Financial Services 7.4% 6.9%
Support Services such as Cleaning/ Packaging/ Security/ etc 7.2% 6.9%
Iron and Steel - Primary forms 5.3% 5.8%
Mineral oils and Mineral Fuels 5.2% 5.6%
Tobacco products 4.9% 4.8%
Passenger Cars and Buses 4.8% 4.7%
Transport Services - Passgener and Goods; Postal and Courier Services 4.8% 4.4%
Commercial Buildings and Other Construction Services 4.6% 5.6%
Products of the Chemical or Allied Industries 4.2% 4.1%
Other Professional/ Technical and Business Services 4.2% 4.2%
Cement/ Glass/ Ceramic and Stone Products 4.1% 4.9%
Prepared Food stuff 4.1% 3.9%
Other Machinery and Appliances 3.5% 3.4%
Goods Carriers and other Vehicles/ Railways/ Aircarfts and Ships 3.2% 3.3%
Plastic and Rubber Articles/ Products 3.2% 3.3%
Electric machinery and Electronic appliances 2.7% 2.6%
Real Estate Services 2.6% 2.4%
Two-wheelers and Bicycles 1.6% 1.4%
Leather/ Paper/ Wood and and their articles 1.6% 1.8%
Leasing/ Rental or Licensing Services 1.6% 1.0%
Telecom/ Broadcasting and Information Supply Services 1.4% 1.1%
Residential buildings - Construction Services 1.4% 1.4%
Articles of Iron and Steel 1.4% 1.4%
Pharmaceuticals and Medical Devices 1.3% 1.2%
Gold and precious metals/ articles thereof 1.2% 1.0%
Accommodation/ Food and Beverages Services 1.1% 1.2%
Plants and Plant Products 1.1% 1.1%
Miscellaneous Manufactured Articles 1.1% 1.1%
Other metals/ articles thereof 1.1% 0.9%
Textiles and Textile Articles including Headgear and Footwear 1.1% 1.1%
Agenda Item 7(b): Status update on issues related to IGST Settlement to States.
1.Background and Terms of Reference
1.1Pursuant to the decision made in the 54th meeting of the GST Council held on 9th September 2024, a Committee of Officers (“the Committee” or “CoO”) under the Chairmanship of Additional Secretary (Revenue) was set up vide OM dated 17th September 2024. Members of the Committee are given in Annexure – 1.
1.2The Committee was tasked with the following mandate:
(a)To examine the legislative provisions and rules relating to process of IGST Settlement under GST.
(b)To examine the current process followed by GSTN in making the IGST settlement and analyse in detail any items of settlement not carried out and the reasons thereof.
(c)To analyse and apprise the GST Council regarding the following:
detailed understanding of the workings and the process followed in making the IGST settlement.
reasons and circumstances under which there can be a positive/negative balance in the IGST account.
manner in which settlement may be carried out of positive or negative balances going forward.
suggestions to improve the process of IGST so as to arrive at a more accurate settlement to States including any amendments desired in the relevant GST laws and the rules.
2.A brief of the deliberations of the CoO
2.2.1The members of the Committee highlighted various issues in respect of Settlement and the issues were deliberated over multiple meetings.
2.2Each of the settlement (STL) forms along with the source of data for these forms were discussed and examined at length. Sample data was called for from GSTN and the issues were analysed for possible solutions. While arriving at the possible solutions for the issues, it was ensured that:
(a)There is transparency in the settlement process.
(b)Demystification of the items included in the settlement forms with sufficiently detailed data.
(c)Resolve the anomalies in reporting and ensure accurate reporting.
(d)Align the current rules to the settlement process and bring clarity in the process of settlement.
(e)Ensure continuous reporting of data / MIS to the States.
2.3Based on the various deliberations and views of the Members, the Committee proposed certain amendments in Rules and certain methodologies to be followed for a smooth and transparent Settlement Process. finalized its report. Accordingly, the Committee also recommended various amendments to the Settlement Rules. The detailed report of the Committee and the proposed amendment in the Settlement Rules are placed as Annexure – 2 and Annexure – 3 to this Agenda Note.
2.4The details of the recommendations and the proposed amendments in the Rules are placed below in the succeeding paragraphs. The summary of the recommendations is placed below:
Issue Suggestion/Recommendation
Blank forms with no settlement pertaining to un-availed ITC on both domestic and imports and ineligible ITC on both domestic and imports.
Settlement based on individual line item-wise information is possible only after implementation of Invoice Management System (IMS).
Until IMS is implemented:
i.Settle un-availed ITC (on both imports and domestic) in summary form based on reporting in Table 4D in GSTR 3B on a monthly basis in STL Form 1.07.
ii.Settle ineligible ITC (on both imports and domestic) in summary form based on reporting in Table 4B in GSTR 3B on a monthly basis in STL Form 1.06.
Once the IMS is operational, settlement is to be done separately for domestic and imports with line-item wise information in the respective forms.
Requirement of legal framework for mandating the tax payer to report ineligible ITC and ITC reversals under IMS or otherwise. Circular no 170/02/2022-GST dated 6th July, 2022 should be included as a legal provision so that it brings a binding obligation on the taxpayers.
Law Committee to evaluate and suggest a legal provision which may be introduced for adjudication of taxpayers who have not availed/short availed IGST ITC.
Under IMS, rules should be framed to make it mandatory for the taxpayers to report un-availed ITC and ineligible ITC. In case of un-availed ITC based on limitation, automatic reversal may also be envisaged in IMS.
Over a period of time changes have been introduced in GSTR forms and rules which are not reflected in settlement rules and forms. Make consequential changes in the rules to align with the current business process.
Rules to be amended for certain issues like updating terms used such as Common Portal for GSTN, OIDAR being included in the settlement process, reference to UN refunds etc.
Settlement Forms are not aligned to the Rules and Source for capturing the data for each of the forms are not well delineated. Amend the relevant Rules and Forms to clearly delineate the various categories of settlement items contained in this form.
Sources for all the forms are to be specified in the headings of the forms.
In case of imports by unregistered persons, there were credits which were reversed without any explanation. GSTN to share sample data with States for Bills of Entry that were wrongly settled, including month, name, and reverse settlement details. If discrepancies are found, States can request complete data from GSTN, which will be provided as needed.
Going forward the States to be provided with the details of the bills of entry as received from ICEGATE.
Importer Exporter Code to be included in STL Form 1.08.
Information regarding place of supply in case of imports by unregistered persons is not available in the settlement forms. Importer Exporter Code to be included in STL Form 1.08.
Issues in settlement of accumulated ITC between centre and states upon cancellation of GST registration both voluntary and enforced. Many cancellations may involve fake or non-genuine taxpayers, making ITC settlement inappropriate.
Introducing a mechanism for the ‘Proper Officer’ to certify credits could also be counterproductive.
Committee felt that this requires further deliberation, and status quo can be maintained for now.
Reporting of revenue in ‘state code 97’ (Other Territory) is unclear indicating possibility of state revenue being allocated to centre. GSTN has provided sample data on entries appearing in “97. Other Territory”.
Based on analysis of the same, States to report back anomalies in reporting in the category “97. Other Territory”.
Upon review of the data, Committee to evaluate and recommend if instead of “97. Other Territory”, more specific classification can be considered. SRS to be amended appropriately.
Details pertaining to ‘online information data access retrieval services’ (OIDAR) regarding place of supply not available to states. GSTN to share data pertaining to OIDAR (TIN of supplier, Name, PoS, IGST collected etc) as it appears in the return filed in GSTR-5A as an MIS on a monthly basis.
States may seek further data from the jurisdictional officer for OIDAR (i.e) Bengaluru West Zone of CBIC.
Settlement for OIDAR would be reflected in STL Form 1.04 and the rules would be amended accordingly.
3.Deliberations on the manner of recovery
3.3.1The Committee also deliberated on the Method of apportionment / recovery of the balance (positive / negative) remaining in the IGST account. The issue was discussed in detail. It was felt that off late, the balance has been negative and if the trend of negative balance does not reverse, it will become imperative to recover the shortfall equally from the Centre and the States.The present status of the
3.2balance in the IGST Account is as follows:
Financial Year Balance in cr.
FY 2023-24 - 5,516
FY 2024-25 (till November) -26,757
Total -32,273
3.3The Committee observed that the ratio of apportionment between the Centre and the States (50:50) is specified in law, method of apportionment between the States is not specified. Although there is no clear specification in law, ad-hoc advance apportionment has been consistently distributed in a set ratio (base year revenue). Recovery adjustments from FY 2019-20 were also made consistently based on the actual settlement of the month since it reflects the actual utilization of the balance lying with the states.
3.4Various options for recovery, if needed, were discussed with the objective to decide on a method which is demonstrably simple, equitable, uniform, transparent, and which accurately reflects the current economic realities / actual pattern of the IGST utilization amongst States. IGST Settlement is done on a monthly basis based on actual final consumption (in terms of the returns and other similar statements furnished by taxpayers) under various heads as provided in the Settlement rules. In this regard, it was noted that the present ratio of revenues of the States has moved substantially from the base year revenues of the States. Advance apportionment in base year ratio and recovery based on IGST settlement ratio of the month may not reflect the actual pattern of IGST utilization over a period of time.
3.5Two major options were discussed, the first being to adopt the base year revenue ratio for both apportionment of positive balance and recovery of negative balance. The second option is to adopt the ratio of the cumulative IGST settlement ratio in the past 3 years for both apportionment of positive balance and recovery of negative balance. Based on the views of the States, the following was recommended by the Committee:
Recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
Although there was no consensus on the method for apportionment, in order for the ad-hoc advance apportionment to closely mimic the actual expected IGST settlement in future period, it is not appropriate to apportion the IGST balance (positive or negative) based on base year revenue or VAT revenue. In case if GST Council decides to apportion the IGST balance in the ratio of the cumulative IGST settlement ratio, then the consensus is to adopt the IGST settlement ratio of the immediate previous financial year and the same ratio is to be adopted for recovery of negative balance as well.
Further in line with the suggestion of some States, accumulated positive balance over Rs.10,000 crores may be distributed to the States as per the agreed method of apportionment. However, the negative balance shall be recovered within the same financial year by March 15th of every year and cannot be postponed to the subsequent financial year. Any balance for the last fifteen days can be settled when the figures are finalised by CCA.
4.Other items:
4.4.1It has been further recommended that System Requirement Specification (SRS) document for implementing the changes recommended by the Committee may be placed before the Committee and the approval of the Committee be taken before the same is implemented.
4.2Certain other issues were recommended for GSTN and the GST Council Secretariat. The gist of the same is as below:
i.Issues which may be considered by GSTN. GSTN to report status on these items to the Committee on an ongoing basis.
Centralised database of bill traders may be maintained.
Furnishing of settlement report to all States in the login of all CCTs.
Data on actual credit leger balance of IGST ITC, month-wise data for all IGST in-flow, month-wise data for all IGST outflow.
Validation mechanism for Table 4(D)(2) reversal similar to summary available for undue reversal in Table 4(8)(1).
Report of IGST ITC balance in ECL as of 25th of every month to be made available to States.
MIS report on GSTR-2B vs. GSTR-3B.
ii.GST Council Secretariat may be advised to issue an advisory to all States to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS.
4.3It was also recommended that the Committee may continue to review and examine various IT related issues faced by the States and Central formations and provide necessary directions and guidance to GSTN from time to time.
5.Approval required from the GST Council
5.5.1The recommendations of the Committee are placed before the GST Council for approval.
5.2The GST Council may approve that draft amendments to the Settlement rules be notified after being vetted by the Law Committee for consistency and approval of GIC.
5.3Approval of the GST Council is also sought for extending the term of the Committee as a Standing Committee so that IT related issues may be examined and resolved in a regular and comprehensive manner. Remaining issues regarding IGST Settlement may also be considered by the Committee for resolution.
*****
Annexure-1
6.
Annexure-2
Annexure-3
REPORT OF THE COMMITTEE SET UP TO EXAMINE ISSUES IN IGST SETTLEMENT
October 2024
Table of Contents
1. Background and Terms of Reference 3
2. Deliberations of the Committee 3
3. Current Legislative Framework and Rules: 3
4. Issues in brief raised by the Members for resolution: 4
6. Approach for discussion within the Committee: 5
7. Analysis of the Issues and Suggestions / Recommendations of the Committee: 6
7.1 Settlement of ITC lapsed due to not being availed within the limitation u/s 16(4) of the CGST Act 6
7.2 Issues in Settlement relating to imports by unregistered persons in STL 1.08 7
7.3 Settlement in STL 1.06 and 1.10 7
7.4 Settlement for pre-deposit and part recoveries 9
7.5 Settlement of collections made under “97. Other Jurisdictions” 9
7.6 Settlement of collections made under OIDAR 10
7.7 Other Changes required in the settlement rules 10
8. Methodology for apportionment of positive and negative balance in IGST Account: 11
8.1 IGST Balance: 11
8.2 Current method 11
8.3 Options 12
8.4 Views of the State 12
8.5 Recommendations: 13
9. Way forward and further work on other issues: 13
10. Summary of Recommendations: 15
1. Background and Terms of Reference
1.1 Pursuant to the decision made in the 54th meeting of the GST Council held on 9th September 2024, a Committee under the Chairmanship of Additional Secretary (Revenue) was set up vide OM dated 17th September 2024. Members of the Committee are given in Annexure 1.
1.2 The Committee was tasked with the following mandate:
(a) To examine the legislative provisions and rules relating to process of IGST Settlement under GST.
(b) To examine the current process followed by GSTN in making the IGST settlement and analyse in detail any items of settlement not carried out and the reasons thereof.
(c) To analyse and apprise the GST Council regarding the following:
• detailed understanding of the workings and the process followed in making the IGST settlement.
• reasons and circumstances under which there can be a positive/negative balance in the IGST account.
• manner in which settlement may be carried out of positive or negative balances going forward.
• suggestions to improve the process of IGST so as to arrive at a more accurate settlement to States including any amendments desired in the relevant GST laws and the rules.
2. Deliberations of the Committee
2.1 The Committee met on 20th September 2024, 10th October 2024, 17th October 2024 and 29th October 2024. Members participated in hybrid mode in all the meetings.
2.2 Based on the discussions, written comments were also received from the Member representing States of Karnataka, Kerala, Tamil Nadu, Maharashtra, Uttar Pradesh and Punjab.
2.3 Based on the various deliberations and views of all the Members, this report is being submitted.
3. Current Legislative Framework and Rules:
3.1 IGST settlement is carried out based on Section 17 & 18 of the Integrated Goods and Services Act, 2017 (IGST Act). The method and process of settlement is laid down in Goods and services Tax Settlement of funds Rules, 2017 (Settlement Rules).
3.2 Section 18 provides for the settlement based on cross utilisation of credit lying in CGST, SGST, UTGST and IGST account of each of the taxpayers. Relevant rules are contained in Rule 4(1)(b)(i), 4(1)(b)(ii) and 5(b).
3.3 Section 17 provides for the settlement for various items relating to final consumption of Input Tax Credit (ITC) in a particular state, like for example, B2C supplies, imports by unregistered tax persons, ineligible inputs/input services etc.
3.4 Tables showing the mapping of the current process with the relevant provisions of the Act and Rules and source of the data for each of the settlement (STL) reports are given in Annexure 2.
4. Issues in brief raised by the Members for resolution:
4.1 The Settlement Rules were drafted at the inception of the GST Regime. It was drafted with the original design of GST in mind in which the compliance was based on GSTR 1-2-3 architecture wherein all details of inputs and output supplies were to be auto drafted with little manual interventions. However, the returns were changed drastically to bring about ease of compliance. With GSTR-3B in place as summary return, many of the minute details which would have been captured in the GSTR 1-2-3 architecture are not available for making accurate settlement. Hence, there is no settlement being made in the Form 1.07, 1.11 and 1.10.
4.2 In July 2022, Circular no 170/02/2022-GST dated 6th July, 2022 was issued wherein the details required for settlement in Form 1.07, 1.11 and 1.10 were mandated to be captured in a summary form in GSTR 3B. This paved the way for making settlement for these items from August 2022. GSTN incorporated the items covered by these forms in another Form 1.06. These practices have to be recognised and provided for in the Rules so that the current settlement process is incorporated appropriately in the Rules and there is clarity in the process of settlement
4.3 It was highlighted that endeavour should be made to ensure that the settlement is done line item wise in Forms 1.07, 1.11 and 1.10 going forward so that there is transparency in settlement. It will also ensure that the capturing of data in these settlement forms are automatic and not solely based on reporting by the taxpayers. In this regard, the rules should be framed under the new invoice management system (IMS) so that there is obligation on part of the taxpayers to report correctly the items covered by these forms.
4.4 Many of the references in the Rules are outdated and requires to be updated. For instance, the date of annual return as per Settlement Rules is still September whereas in the parent GST Rules, date is now November. Many consequential amendments are required in the Settlement Rules.
4.5 The nomenclature on the Settlement Forms is not in sync with the rules and the source of the data are not explicitly mentioned on these forms. This also affects the way System Requirement Specification (SRS) document is drafted.
4.6 In the Settlement Form 1.08, it was noted that there have been negative settlements in the past few months. There is no clarity on what these negative settlements pertain to and whether these relate to settlements made earlier during the period in which compensation payments were due. Also, bill of entry wise data for the settlement in Form 1.08 is not available with the States.
4.7 While the collections from Online Information Database Access and Retrieval Services (OIDAR) Services are included in the settlement every month, taxpayer data regarding OIDAR services are not made available to the States. Similarly, there is a requirement to provided various MIS reports to the States in IGST settlement every month.
4.8 Further, issue of apportionment of IGST balance (positive or negative) was put forth by many Members and also by DoR. DoR pointed out that there is accumulation of negative balance in this year and hence it is important to resolve the issue of methodology of apportionment.
5. Approach for discussion within the Committee:
5.1 Each of the settlement (STL) forms along with the source of data for these forms were discussed and examined at length. Sample data was called for from GSTN and the issues were analysed for possible solution.
5.2 The following objectives were kept in mind in arriving at the possible solutions for each of the issues identified for resolution:
(a) There is transparency in the settlement process.
(b) Demystification of the items included in the settlement forms with sufficiently detailed data.
(c) Resolve the anomalies in reporting and ensure accurate reporting.
(d) Align the current rules to the settlement process and bring clarity in the process of settlement.
(e) Ensure continuous reporting of data / MIS to the States.
6.Analysis of the Issues and Suggestions / Recommendations of the Committee:
6.1Settlement of ITC lapsed due to not being availed within the limitation u/s 16(4) of the CGST Act
(a)As per the current Settlement Rules, ITC not availed till the lapse of limitation u/s 16(4) of the CGST Act is required to be settled on a yearly basis in STL 1.07 (for domestic purchases) and STL 1.11 (for imports).
(b)Data for these forms were required to be collated from the annual return in GSTR 9.
(c)However, since GSTR 9 is not mandatory for all taxpayers, data in these forms were not part of settlement.
(d)According to Circular no 170/02/2022-GST dated 6th July, 2022, amounts not availed are to be disclosed in GSTR-3B in Table 4D(2) for both domestic and imports. Hence from the month of August 2022, settlement for these items is being made in STL 1.06 instead of STL 1.07 and 1.11.
(e)Although, not provided in the current form in STL 1.06, settlement is being made in respect of such amounts.
(f)Committee noted that under the current scheme of filing of return, the best way to capture the un-availed ITC is based on the reporting in Table 4(D)(2) in Form GSTR-3B. However, there is a need to identify these lapsed credits based on data being populated in GSTR-2B. It may become possible to accurately determine such lapsed credits under the new Invoice Management System (IMS) which is being implemented.
(g)Recommendations:
i.Amend STL 1.07 to bring more clarity with respect to settlement done through reporting in Table 4D (2) of GSTR 3B. Reporting in STL 1.07 is to be made on an aggregate basis for both domestic and imports which, however, are to be reflected separately in the said Form.
ii.Law Committee to frame rules for IMS and the issue of capturing lapsed credit be addressed in the same.
iii.Once the IMS is operational, settlement in STL 1.07 is to be done separately for domestic and imports.
iv.Meanwhile, the current dispensation of settling such amounts may continue to be settled vide Table STL-1.06
6.2Issues in Settlement relating to imports by unregistered persons in STL 1.08
(a)As per the current settlement rules, IGST paid on imports by unregistered persons are reported in STL 1.08.
(b)It was observed that in STL 1.08, there have been negative settlement (or reverse settlement) in the last 2 years resulting in lesser IGST settlement to most states.
(c)The issue was analysed in detail, and it was noted that in respect of certain bills of entry in the earlier period (particularly 2021-22 and 2022-23), IGST was settled on the basis that the same pertains to unregistered persons, whereas it was found later that such bills of entry were indeed pertaining to registered persons, and they have claimed ITC in their GST returns.
(d)GSTN confirmed that the issue is completely resolved and all recoveries for the past period have been made. Going forward, process has been geared up to capture the GSTIN properly so that the issue is not repeated.
(e)It was also noted that in STL 1.08, there is no Importer Exporter Code (IEC) which would enable the States to verify the settlement.
(f)Recommendations:
i.GSTN to share sample data with States for the Bills of entries which were wrongly settled with details of month, name of person etc along with the details of the month in which the same was recovered as reverse settlement. In case of discrepancy noted, States may request for complete data from GSTN and the same shall be provided on need basis.
ii.Going forward the States to be provided with the details of the bills of entry as received from ICEGATE.
iii.Importer Exporter Code to be included in form STL 1.08.
6.3Settlement in STL 1.06 and 1.10
(a)Currently, form STL 1.06 is being used to settle the following:
ineligible credits (ineligible credit on imports was to be covered by STL 1.10; however, the same is being settled vide STL-1.06)
lapsed credits due to time limitation envisaged u/s 16(4) of the CGST/SGST Act (supposed to be covered by STL 1.07 and 1.11)
lapsed credits due to composition scheme and
cancellation of registration.
(b)Rules are not elaborate enough to cover all the scenarios which are currently being considered and settled vide STL 1.06.
(c)Sources for each of the form are not clearly delineated.
(d)Ineligible ITC on Imports are also settled in STL 1.06 instead of STL 1.10 since the source of this settlement is from Table 4B(1) of GSTR 3B and currently there is no split of domestic and imports in the same.
(e)However, there is a need to identify these ineligible credits separately for imports and domestic based on a separate provision made in GSTR-3B to capture data relating to ineligible ITC separately for domestic and imports. It may become possible to accurately determine such lapsed credits under the new Invoice Management System (IMS) which is being implemented.
(f)As regards cancellation of registration it was observed that there should be an automatic mechanism to settle the ITC upon cancellation of registration. It was noted that the current settlement based on return to be filed by the taxpayer does not fully capture the ITC that would accrue to the States. It was also pointed out that many of the cancellations may be involuntary where the taxpayers were found to be fake or non-genuine, in which case settlement of ITC is not appropriate. Furthermore, introducing a mechanism to allow the ‘Proper Officer’ to certify that the credits are correct and not fake may also be counterproductive.
(g)It was also pointed out especially by the State of Karnataka that the reverse settlement of IGST upon identification of fake credits is also an important aspect.
(h)Recommendations:
i.Amend the relevant Rule and Form STL 1.06 to provide for clarity on various categories of settlement contained in the form.
ii.Sources for all the forms (including STL 1.06) to be specified in the headings of the form.
iii.Law Committee to frame rules for IMS and the issue of capturing ineligible credit separately for domestic and imports be addressed in the same.
iv.Settle ineligible credits related to imports in STL 1.06 till the time the data is captured through IMS or GSTR-3B in which case the settlement will be made through STL 1.10.
v.Regarding settlement of ITC upon cancellation of registration, the current method may be followed. Committee may further deliberate on the right mechanism to have an automatic settlement of ITC which would balance the requirements of IGST settlement and the objectives of identifying fake/non-genuine taxpayers. This would also include the issue of reverse settlement of IGST upon identification of fake credits
6.4Settlement for pre-deposit and part recoveries
(a)Issue of settlement of amount pre-deposited before filing an appeal represent part payment or recovery is covered by Rule 6 and Forms STL 3.01, 3.02 and 5.05. Other part payment/recoveries also may exist.
(b)Place of supply is not readily available. It can’t be settled to the State in which taxpayer is located as place of supply (PoS) will be another State in IGST.
(c)Pre-deposit may also get refunded in future depending on the outcome of the appeal.
(d)Hence it is necessary to have a formulation to settle pre-deposit at the time of deposit.
(e)Recommendations:
i.PoS to be indicated as a mandatory field in payment challan including for part payment and pre-deposits and the same is captured in the system.
ii.If subsequently refunded, same PoS be used so that there can be reverse settlement.
6.5Settlement of collections made under “97. Other Jurisdictions”
(a)It was noted that there are collections made and settled under “97 Other Jurisdictions”. ‘Other territory’ as per clause (81) of section 81 of the CGST/SGST Act is a territory which is neither a part of any State or that of any Union Territory. Strictly speaking the units falling in the territorial waters (including sea-bed or subsoil underlying the same), continental shelf, EEZ or any other maritime zone of India would be covered by this and, as such, such territory of India is outside the state’s jurisdiction. A minor exception as regards territorial waters immediately adjoining a State has been provided in Section 9 of the IGST Act. Thus, it would be seen that ‘other territory’ is essentially that part of India which is neither in a State nor in any Union Territory.
(b)Data is required to be analysed to understand the various scenarios in which revenue is accounted under “97-Other Territory”.
(c)States has requested that there must be transparency in the amounts appearing under this code as well as the mode of settlement. Maharashtra pointed out that in the SRS, settlement of this jurisdiction is entirely taken to centre’s kitty.
(d)Recommendation:
i.GSTN to provide sample data on entries appearing in “97. Other Territory”.
ii.GSTN to come out with clear guidance on what scenarios are covered by “97. Other territory”.
iii.Upon review of the data, Committee may evaluate and recommend if instead of “97. Other territory”, more specific classification like EEZ may be included to avoid confusion. This may be reviewed by the Committee.
6.6Settlement of collections made under OIDAR
(a)It was noted that there needs to be more transparency in sharing of data pertaining to OIDAR tax collections.
(b)It was noted that settlement is currently been done for OIDAR services in table STL 1.04 based on PoS reported by taxpayers in GSTR 5A.
(c)Recommendation:
i.GSTN to share data pertaining to OIDAR (TIN of supplier, Name, PoS, IGST collected etc) as it appears in the return filed in GSTR-5A as an MIS on a monthly basis.
ii.States may seek further data from the jurisdictional officer for OIDAR (i.e) Bengaluru West Zone of CBIC.
iii.Settlement for OIDAR would be reflected in STL Form 1.04 and the rules would be amended accordingly.
6.7Other Changes required in the settlement rules
Certain other changes were identified in the Settlement Rules which requires an amendment. These are as follows:
ii.Reference to “Goods and Services Tax Network” to be changed to “common portal” as in the parent GST Acts. Similarly reference to CBEC changed to CBIC.
iii.R.3(2)(b) is to be deleted as the annual reports have no significance in settlement. All settlements are based on monthly returns only.
iv.Minor changes in language – words “adjusted liability of tax from”, replaced with “discharged liability of tax by utilizing”.
v.In R.4(b)(iii) –references to exports, supplies to SEZ, UINs have to be reworded as these supplies are entitled to refunds. Objective is to restrict it to the extent of refunds not claimed beyond the due date specified.
vi.Settlement for IGST collected from Online Information Database Access and Retrieval Services (OIDAR) to be added in the relevant rule and in Form 1.04.
vii.R.8(b)(v) refers to S.42 & 43 of CGST Act which stand omitted. Hence this sub-rule and Form 5.06 are required to be deleted.
Draft changes to the Settlement Rules are attached as Annexure 3 to this report.
7.Methodology for apportionment of positive and negative balance in IGST Account:
7.1IGST Balance:
(a)It is noted that in the current year, IGST account started with a negative balance of Rs.5,500 crore. Upto Aug 2024, cumulative negative balance swelled to Rs.14,218 crore. In Sep 2024, the trend reversed and was at Rs.8,000 crore.
(b)If the negative balance does not reverse before Nov 2024, there will be a necessity to recover the negative balance from the States.
(c)Issue of the method to be adopted for apportionment of positive balance and recovery of negative balance was deliberated in the Committee.
7.2Current method
(a)As discussed earlier, IGST Settlement is done on a monthly basis based on actual final consumption (in terms of the returns and other similar statements furnished by taxpayers) under various heads as provided in the Settlement rules.
(b)Due to various timing issues in the collection of IGST and actual consumption-based apportionment, there is generally balance lying in the IGST account. It may be noted that from Feb 2018 onwards, surplus in IGST amounting to ₹ 402,000 Crores was apportioned in advance in the ratio of 50:50 to the Centre (₹ 201,000) and the States (₹ 201,000). Thereafter, as and when there were negative balance, the said negative balance was also adjusted/recovered from Centre and State in the same 50:50 ratio. Including the above adjustment of ₹ 18,000 Crores made in November 2023, an amount of ₹ 68,000 Crores has been recovered due to negative balance from time to time, out of this ₹34,000 pertain to the shares of the States. Accordingly, balance of ad-hoc advance apportionment lying with the states is ₹ 1,67,000 Crores (₹ 2,01,000 minus ₹ 34,000) as of December 2023.
(c)While the ratio of apportionment between the Centre and the States (50:50) is specified in law, method of apportionment between the States is not specified. Although there is no clear specification in law, ad-hoc advance apportionment has been consistently distributed in a set ratio (base year revenue). Recovery adjustments from FY 2019-20 were also made consistently based on the actual settlement of the month since it reflects the actual utilization of the balance lying with the states. Recoveries made in FY 2018-19 alone were based on the base-year revenue ratio.
7.3Options
(a)Various options were discussed on the method for apportionment and of positive balance and recovery of negative balance.
(b)The first option is to adopt the base year revenue ratio for both apportionment of positive balance and recovery of negative balance.
(c)The second option is to adopt the ratio of the cumulative IGST settlement ratio in the past 3 years for both apportionment of positive balance and recovery of negative balance.
(d)The objective is to decide on a method which is demonstrably simple, equitable, uniform, transparent, and which accurately reflects the current economic realities / actual pattern of the IGST utilization amongst States. It may be noted that the base year revenue ratio has moved substantially. Advance apportionment in base year ratio and recovery based on IGST settlement ratio of the month may not reflect the actual pattern of IGST utilization over a period of time.
7.4Views of the State
(a)Kerala, UP and Punjab supported Option 1.
(b)Kerala also stated that recovery should be made only after the positive balance lying with the States as of the end of the compensation period is exhausted.
(c)Karnataka stated that the positive balance in IGST account shall be apportioned to the states whenever the positive balance is over a threshold amount. Threshold can be recommended by the committee. Further, in a financial year if there is negative balance at the end of the year, it can be recovered in the first quarter of the next financial year.
(d)Tamil Nadu stated that there should be no requirement to recover any negative balance as IGST account would even out over a period of time.
(e)Maharashtra and Tamil Nadu pointed that recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
(f)Tamil Nadu has further pointed out that VAT revenue be used as the basis for apportionment of positive and negative balance. In the alternative, TN has supported that the ratio should be IGST settlement of the immediate previous financial year and not 3 years. This has been supported by Karnataka, Maharashtra and Gujarat.
7.5Recommendations:
i.Recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
ii.Although there is no consensus on the method for apportionment, in order for the ad-hoc advance apportionment to closely mimic the actual expected IGST settlement in future period, it is not appropriate to apportion the IGST balance (positive or negative) based on base year revenue or VAT revenue. In case if GST Council decides to apportion the IGST balance in the ratio of the cumulative IGST settlement ratio, then the consensus is to adopt the IGST settlement ratio of the immediate previous financial year and the same ratio is to be adopted for recovery of negative balance as well.
iii.Further in line with the suggestion of Karnataka, accumulated positive balance over Rs.10,000 crores may be distributed to the States as per the agreed method of apportionment. However, the negative balance shall be recovered within the same financial year by March 15th of every year and cannot be postponed to the subsequent financial year. Any balance for the last fifteen days can be settled when the figures are finalised by CCA.
8.Way forward and further work on other issues:
8.1It was also further discussed that the Committee should continue to work on certain issues and the approval of the GST Council may be sought for the same.
8.2There were other issues raised by the Member States on various issues which were outside the mandate of the terms of reference of the Committee. However, since these issues may have a bearing on the IGST settlement, the issues were deliberated, and it was decided to refer certain issued to Law Committee.
8.3States sought certain MIS reports and data on an ongoing basis, and these were found to be relevant to have a transparent system of settlement. GSTN may provide these reports on an ongoing basis. It was also requested that States may be advised to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS.
8.4Recommendations:
i.System Requirement Specification (SRS) document for implementing the changes recommended by the Committee may be placed before the Committee and the approval of the Committee be taken before the same is implemented.
ii.The Committee may continue to review and examine various IT related issues faced by the States and Central formations and provide necessary directions and guidance to GSTN from time to time.
iii.Issues which may be considered by Law Committee in a time bound manner:
a)Legal provision needs to be introduced for adjudication of taxpayers who have not availed/short availed IGST ITC.
b)Circular no 170/02/2022-GST dated 6th July, 2022 should be included as a legal provision so that it brings a binding obligation on the taxpayers.
iv.Issues which may be considered by GSTN. GSTN to report status on these items to the Committee on an ongoing basis.
a)Centralised database of bill traders may be maintained.
b)Furnishing of settlement report to all States in the login of all CCTs.
c)Data on actual credit leger balance of IGST ITC, month-wise data for all IGST in-flow, month-wise data for all IGST outflow.
d)Validation mechanism for Table 4(D)(2) reversal similar to summary available for undue reversal in Table 4(8)(1).
e)Report of IGST ITC balance in ECL as of 25th of every month to be made available to States.
f)MIS report on GSTR-2B vs. GSTR-3B.
v.GST Council Secretariat may be advised to issue an advisory to all States to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS.
9.Summary of Recommendations:
Issue Suggestion/Recommendation Action owner
Settlement of ITC not availed due to lapse of limitation u/s 16(4) of the CGST Act
Amend STL 1.07 to bring more clarity with respect to settlement done through reporting in Table 4D (2) of GSTR 3B. Reporting in STL 1.07 is to be made on an aggregate basis for both domestic and imports.
Law Committee to frame rules for IMS and the issue of capturing lapsed credit be addressed in the same.
Once the IMS is operational, settlement in STL 1.07 is to be done separately for domestic and imports. DOR
LC
LC/ DoR
Issues in Settlement relating to imports by unregistered persons in STL 1.08 i.GSTN to share sample data with States for the Bills of entries which were wrongly settled with details of month, name of person etc alongwith the details of the month in which the same was recovered as reverse settlement. In case of discrepancy noted, States may request for complete data from GSTN and the same shall be provided on need basis.
ii.Going forward the States to be provided with the details of the bills of entry as received from ICEGATE.
iii.Importer Exporter Code to be included in form STL 1.08. GSTN
GSTN
DoR
Settlement in STL 1.06 and 1.10 i.Amend the relevant Rule and Form STL 1.06 to provide for clarity on various categories of settlement contained in the form.
ii.Sources for all the forms (including STL 1.06) to be specified in the headings of the form.
iii.Law Committee to frame rules for IMS and the issue of capturing eligible credit separately for domestic and imports be addressed in the same.
iv.Settle ineligible credits related to imports in STL 1.06 till the time the data is captured through IMS or GSTR-3B.
v.Regarding settlement of ITC upon cancellation of registration, the current method may be followed. Committee may further deliberate on the right mechanism to have an automatic settlement of ITC which would balance the requirements of IGST settlement and the objectives of identifying fake/non-genuine taxpayers. This would also include the issue of reverse settlement of IGST upon identification of fake credits DoR
DoR
LC
GSTN-DoR
DoR
Settlement for pre-deposit and part recoveries i.PoS to be indicated as a mandatory field in demand/SCN/payment challan and the same is captured in the system.
ii.If subsequently refunded, same PoS be used so that there can be reverse settlement. LC
LC
Settlement of collections made under “97. Other Jurisdictions” i.GSTN to provide sample data on entries appearing in “97. Other territory”.
ii.GSTN to come out with clear guidance on what scenarios are covered by “97. Other territory”.
iii.Upon review of the data, Committee may evaluate and recommend if instead of “97. Other territory”, more specific classification like EEZ may be included to avoid confusion. This may be reviewed by the Committee. GSTN
GSTN
DoR
Settlement of collections made under OIDAR i.GSTN to share data pertaining to OIDAR (TIN of supplier, Name, PoS, IGST collected etc) as it appears in the return filed in GSTR-5A as an MIS on a monthly basis.
ii.States may seek further data from the jurisdictional officer for OIDAR (i.e) Bengaluru West Zone of CBIC. GSTN
Method of apportionment of IGST balance (positive or negative i.Recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
ii.Although there is no consensus on the method for apportionment, in order for the ad-hoc advance apportionment to closely mimic the actual expected IGST settlement in future period, it is not appropriate to apportion the IGST balance (positive or negative) based on base year revenue or VAT revenue. In case if GST Council decides to apportion the IGST balance in the ratio of the cumulative IGST settlement ratio, then the consensus is to adopt the IGST settlement ratio of the immediate previous financial year and the same ratio is to be adopted for recovery of negative balance as well.
iii.Further in line with the suggestion of Karnataka, accumulated positive balance over Rs.10,000 crores may be distributed to the States as per the agreed method of apportionment. However, the negative balance shall be recovered within the same financial year by March 15th of every year and cannot be postponed to the subsequent financial year. Any balance for the last fifteen days can be settled when the figures are finalised by CCA. DoR
DoR
Way Forward and iii.System Requirement Specification (SRS) document for implementing the changes recommended by the Committee may be placed before the Committee and the approval of the Committee be taken before the same is implemented.
iv.The Committee may continue to review and examine various IT related issues faced by the States and Central formations and provide necessary directions and guidance to GSTN from time to time.
v.Issues which may be considered by Law Committee in a time bound manner:
Legal provision needs to be introduced for adjudication of taxpayers who have not availed/short availed IGST ITC.
Circular no 170/02/2022-GST dated 6th July, 2022 should be included as a legal provision so that it brings a binding obligation on the taxpayers.
vi.Issues which may be considered by GSTN. GSTN to report status on these items to the Committee on an ongoing basis.
Centralised database of bill traders may be maintained.
Furnishing of settlement report to all States in the login of all CCTs.
Data on actual credit leger balance of IGST ITC, month-wise data for all IGST in-flow, month-wise data for all IGST outflow.
Validation mechanism for Table 4(D)(2) reversal similar to summary available for undue reversal in Table 4(8)(1).
Report of IGST ITC balance in ECL as of 25th of every month to be made available to States.
MIS report on GSTR-2B vs. GSTR-3B.
vii.GST Council Secretariat may be advised to issue an advisory to all States to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS. DoR
DoR
LC
GSTN
GSTCS
Other changes in the rules i.Reference to “Goods and Services Tax Network” to be changed to “common portal” as in the parent GST Acts. Similarly reference to CBEC changed to CBIC.
ii.R.3(2)(b) is to be deleted as the annual reports have no significance in settlement. All settlements are based on monthly returns only.
iii.Minor changes in language – words “adjusted liability of tax from”, replaced with “discharged liability of tax by utilizing”.
iv.In R.4(b)(iii) –references to exports, supplies to SEZ, UINs have to be reworded as these supplies are entitled to refunds. Objective is to restrict it to the extent of refunds not claimed beyond the due date specified.
v.Settlement for IGST collected from Online Information Database Access and Retrieval Services (OIDAR) to be added in the relevant rule.
vi.R.8(b)(v) refers to S.42 & 43 of CGST Act which stand omitted. Hence this sub-rule and Form 5.06 are required to be deleted. DOR
Annexure 2:
(a)STL reports related to Cross-utilisation:
(b)STL Reports related to Apportionment
(c)Source of STL Reports
Agenda Item 7(c): GSTAT Procedure Rules to regulate the procedure for functioning of the GSTAT.
GST Appellate Tribunal (GSTAT) is a new attached office under the Department of Revenue which was established on 1st September, 2024 with Principal Bench at New Delhi and 31 state benches at 45 locations across the country.
2. The following developments have taken place till date for making the GSTAT operational:
i.The President of GSTAT has been appointed and he joined the post on 6th May, 2024.
ii.The process of appointment of the Members of the Tribunal is underway.
iii.953 posts of supporting staff have been created and the process of filling up the positions is underway.
3. However, to fully operationalize the benches, certain procedures and methodologies are required to be laid out. In this regard, section 106 of the CGST Act, 2017 states that:
106. Procedure of Authority, Appellate Authority and National Appellate Authority
The Authority or the Appellate Authority 2[or the National Appellate Authority] shall, subject to the provisions of this Chapter, have power to regulate its own procedure.
Further, as per sub-section (1) of section 111 of the CGST Act, 2017 mentions that:
Section 111. Procedure before Appellate Tribunal
(1) The Appellate Tribunal shall not, while disposing of any proceedings before it or an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and subject to the other provisions of this Act and the rules made thereunder, the Appellate Tribunal shall have power to regulate its own procedure.
4. Accordingly, GSTAT Procedure Rules, 2024 has been drafted by Principal Bench, GSTAT for functioning of the GSTAT. The rules include important instructions/information related to filing of appeal, documents required, hearing of appeal, records to be maintained and pronouncement of order, etc.
5. Accordingly, the Draft rules have been prepared and are placed in Annexure-1. If approved, the same may be placed before the GST Council for consideration and approval. Once approved, the same may be vetted by Law Committee and notified with the approval of GIC.
*****
Annexure - 1
INDEX
Preamble
Chapter I: Preliminary
1.Short title and commencement
2.Definitions
Chapter II: Powers and Functions
3.Computation of time period
4.Format of order or direction or rule
5.Official seal of the Appellate Tribunal
6.Custody of the records
7.Sittings of Bench
8.Sitting hours of the Appellate Tribunal
9.Working hours of office
10.Inherent powers
11.Calendar
12.Listing of cases
13.Power to exempt
14.Power to extend time
15.Powers and functions of the Registrar
16.Power of adjournment
17.Delegation powers of the President
Chapter III: Institution of appeals - Procedure.
18.Filing of Appeals
19.Grounds which may be taken in appeal
20.Rejection or amendment of Form of Appeal
21.Who may be joined as respondents
22.Endorsing copies to the party.
23.Filing of Form of cross-objections, applications or replies to appeals/applications.
24.Filing of Reply and other Documents by the Respondents.
25. Filing of Rejoinder
Chapter IV: Cause list
26.Preparation and publication of daily cause list.
27.New cause list and adjournment of cases on account of non-sitting of an Appellate Tribunal
28.Service of Notices and processes.
Chapter V: Hearing of Appeal
29.Hearing of appeal
30.Action on appeal for appellant’s default
31.Hearing of appeals ex parte
32.Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application
33.Production of additional evidence
34.Production of Evidence by Affidavit
35.Adjournment of appeal
36.Proceedings to be open to public
37.Procedure for filing of and disposal of interlocutory Application
38.Appeal referred to larger Bench
39.Order to be signed and dated
40.Publication of orders
Chapter VI: Record of Proceedings
41.Court Diary
42.Order sheet
43.Maintenance of court diary
44.Statutes or citations for reference
45.Calling of cases in court
46.Regulation of court work
Chapter VII: Maintenance of Registers
47.Registers to be maintained.
48.Arrangement of records in pending matters.
49.Contents of main file.
50.Contents of process file.
51.Contents of Execution file.
52.File for miscellaneous applications
53.Preservation of Record
54.Retention, Preservation and Destruction of Records.
Chapter VIII: Inspection of Record
55.Inspection of the records.
56.Grant of inspection.
57.Application for grant of inspection.
58.Mode of inspection.
59.Maintenance of register of inspection.
Chapter IX: Appearance of authorised representative
60.Appearance of authorised representative
61.Consent for engaging or change of authorised representative (Duly stamped as per the respective High Court Rules)
62.Restrictions on appearance
63.Restriction on party’s right to be heard
64.Empanelment of special authorised representatives by the Appellate Tribunal
65.Professional dress for the authorised representatives.
Chapter X: Affidavits
66.Title of affidavits.
67.Form and contents of the affidavit.
68.Persons authorised to attest.
69.Affidavits of illiterate, visually challenged persons.
70.Identification of deponent.
71.Annexures to the affidavit.
Chapter XI: Discovery, Production and Return of Documents
72.Application for production of documents, form of summons.
73.Suo motu summoning of documents.
74.Marking of documents.
75.Return and transmission of documents.
Chapter XII: Examination of Witnesses and Issue of Commissions
76.Procedure for examination of witnesses, issue of Commissions
77.Examination in camera.
78.Form of oath or affirmation to witness.
79.Form of oath or affirmation to interpreter.
80.Officer to administer oath.
81.Form recording of deposition.
82.Numbering of witnesses
83.Grant of discharge certificate
84.Witness allowance payable
85.Records to be furnished to the Principal Commissioner or Commissioner
86.Taking of specimen handwriting, signature etc.
Chapter XIII: Disposal of Cases and Pronouncement of Orders
87.Disposal of Cases.
88.Operative portion of the order.
89.Corrections.
90.Power to impose Costs.
91.Pronouncement of Order.
92.Pronouncement of order by any one member of the Bench
93.Authorising any member to pronounce order
94.Recusal
95.Enlargement of time.
96.Rectification of Order.
97.General power to amend.
98.Making of entries by Court officer.
99.Transmission of order by the Court officer.
100.Format of order.
101.Indexing of case files after disposal.
102.Copies of orders in library.
Chapter XIV: Goods and Services Tax Appellate Tribunal Orders
103.Register of Appeals, Petitions, etc
104.Placing of order of Hon’ble Supreme Court and Hon’ble High Courts before the Appellate Tribunal
105.Registrar to ensure compliance of Hon’ble Supreme Court or Hon’ble High Courts orders
106.Fees
107.Award of costs in the proceedings
108.Dress for the Members
109.Dress for the parties
110.Removal of difficulties and issue of directions
111.Inspection by the President
GSTAT Procedural Rules 2024
Preamble
In exercise of the powers conferred by Section 106 and 111 of the Central Goods and Services Tax Act, 2017 (CGST Act 2017), the Goods and Services Appellate Tribunal, hereinafter referred to as the GSTAT, hereby makes the following rules for regulating the procedure and functioning of the Goods and Services Tax Appellate Tribunal (GSTAT).
Chapter I: Preliminary
1.Short title and commencement
(i)These rules may be called the Goods and Services Tax Appellate Tribunal (GSTAT) Procedural Rules, 2024. They shall come into force on the date of their publication in the official Gazette.
2.Definitions
(i)In these rules, unless the context otherwise requires:
(a)"Act" means the Central Goods and Services Tax Act, 2017 (CGST Act 2017) or State/Union Territory Goods and Services Tax Act 2017 (SGST/UTGST Act 2017);
(b)“adjudicating authority” means the adjudicating authority as defined under Section 2(4) of the CGST/SGST/UTGST Act 2017;
(c)"Appellate Tribunal" means the Goods and Services Tax Appellate Tribunal (GSTAT) established under Section 109 of the CGST Act 2017;
(d)“authorised representative” in relation to any proceedings before the Appellate Tribunal means, —
(i)“authorised representative” means a person authorised in writing/vakalatnama (duly stamped) by a party to present his case before the Appellate Tribunal as provided under Section 116 of the Act, to appear, plead or act on his behalf in such proceedings;
Provided that a vakalatnama can be filed by an advocate within the meaning of the professional defined under the Advocates Act 1961.
or
(ii)a person duly appointed [by the Central Government or State Government or by an officer duly authorised in this behalf] as authorised representative to appear, plead and act for the [Principal Commissioner or Commissioner] in such proceedings;
(e)“Bench” means the Bench of the Appellate Tribunal and includes a Principal Bench –
(i)and a Member sitting singly;
(ii)Principal Bench means a Bench constituted at the principal seat of the Appellate Tribunal (at New Delhi) to which the cases arising anywhere in India may (also) be assigned;
(iii)State Bench means a Bench notified by the Central Government and having jurisdiction over a specified area;
(f)“Certified copy” means the original copy of the order/documents received by the party, or a copy (including a Photostat copy) thereof duly authenticated by the concerned department, or a copy (including a Photostat copy) duly authenticated by the ‘Authorized Representative’ of the appellant/respondent;
(g)“CGST” means Central Goods and Services Tax;
(h)“form” means a form prescribed under Central Goods and Services Tax, State Goods and Services Tax /Union Territory Goods and Services Tax Rules 2017;
(i)“Interlocutory application” means an application to the Appellate Tribunal in any appeal or proceeding already instituted in such Appellate Tribunal, other than a proceeding for execution of an order;
(j)“member” means a member of the Appellate Tribunal and includes the President and a Vice-President;
(k)“party” means a person who prefers an appeal before the Appellate Tribunal and includes respondent of any person interested in the appeal;
(l)“prescribed” means prescribed by or under these rules;
(m)"President" means the President of the Appellate Tribunal as per Section 109 of the Act;
(n)“[Principal Commissioner or Commissioner]” means the [Principal Commissioner or Commissioner of CGST & Customs/SGST/UTGST] as the case may be;
(o)"Registrar" means the Registrar of the Appellate Tribunal as per CGST, SGST /UTGST Rules 2017;
(p)"Rules" means the Goods and Services Tax Appellate Tribunal Procedural Rules, 2024;
(q)"Section" means a section of the Act;
(r)“SGST” means State Goods and Services Tax;
(s)“UTGST” means Union Territory Goods and Services Tax;
(t)“Vice-President” means a Vice-President of the State Benches as per Section 109(7) of the Act;
(u)All other words and expressions used in these rules but not defined herein and defined in the Act and CGST, SGST/UTGST Rules 2017 shall have the meanings respectively assigned to them in the Act and in the above-mentioned rules.
Chapter II: Powers and Functions
3.Computation of time period- Where a period is prescribed by the Act and these rules or under any other law or is fixed by the Appellate Tribunal for doing any act, in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded.
4.Format of order or direction or rule- every rule, direction, order, summons, warrant or other mandatory process shall be issued in the name of the President/Member and shall be signed by the Registrar or any other officer specifically authorised in that behalf by the President, with the day, month and year of signing and shall be sealed with the official seal of the Appellate Tribunal.
5.Official seal of the Appellate Tribunal- The official seal and emblem of the Appellate Tribunal shall be such, as the President may from time to time specify and shall be in the custody of the Registrar.
6.Custody of the records- The Registrar shall have the custody of the records of the Appellate Tribunal and no record or document filed in any case or matter shall be allowed to be taken out of the custody of the Appellate Tribunal without the leave of the Appellate Tribunal.
Provided that the Registrar may allow any other officer of the Appellate Tribunal to remove any official paper or record for administrative purposes from the Appellate Tribunal.
7.Sittings of Bench — Subject to such general or special orders as may be made by the President, a Bench shall hold its sittings either at Headquarters or at such other place falling within its jurisdiction as may be notified by the Central Government.
8.Sitting hours of the Appellate Tribunal- The sitting hours of the Appellate Tribunal shall ordinarily be from 10.30 AM. to 01.30 P.M. and from 2.30 P.M. to 4.30 P.M. subject to any order made by the President and this shall not prevent the Appellate Tribunal to extend its sitting as it deems fit.
9.Working hours of office - (i) The office of the Appellate Tribunal shall remain open on all working days from 10:00 A.M. to 5 P.M.
(ii) The filing counter of the Registry shall be open on all working days from 10.30 AM to 5.00 P.M.
10.Inherent powers - Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal.
11.Calendar - The Calendar of days of working of Appellate Tribunal in a year shall be as decided by the President and Members of the Appellate Tribunal.
12.Listing of cases - All urgent matters filed before 12 noon shall be listed before the Appellate Tribunal on the following working day, if it is complete in all respects as provided in these rules and in exceptional cases, it may be received after 12 noon but before 3.00 P.M. for listing on the following day, with the specific permission of the Appellate Tribunal or President.
13.Power to exempt - The Appellate Tribunal may on sufficient cause being shown, exempt the parties from compliance with any requirement of these rules and may give such directions in matters of practice and procedure, as it may consider just and expedient on the application moved in this behalf to render substantial justice.
14.Power to extend time - The Appellate Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed.
15.Powers and functions of the Registrar- The Registrar shall have the following powers and functions, namely: -
(a)shall be responsible for the day-to-day administration of the Appellate Tribunal;
(b)notify the procedure of filing appeal to the Appellate Tribunal;
(c)registration of appeals, petitions and applications and scrutiny thereof;
(d)receive applications for amendment of appeal or the petition or application or subsequent proceedings;
(e)receive applications for fresh summons or notices and regarding services thereof;
(f)receive applications for short date summons and notices;
(g)receive applications for substituted service of summons or notices;
(h)receive applications for seeking orders concerning the admission and inspection of documents;
(i)maintain records of proceedings and manage the registry; and
(j)such other incidental or matters as the President may direct from time to time.
16.Power of adjournment - All adjournments shall normally be sought before the concerned Bench and in extraordinary circumstances, the Registrar may, if so directed by the Appellate Tribunal in chambers, at any time adjourn any matter and lay the same before the Appellate Tribunal in chambers.
17.Delegation powers of the President – (i) The President may assign or delegate to the Vice president of State Bench of GSTAT some of the functions required by these rules to be exercised by the President.
(ii) The President may assign or delegate to a Joint/Deputy/Assistant Registrar or to any other suitable officer all or some of the functions required by these rules to be exercised by the Registrar.
Chapter III: Institution of appeals - Procedure.
18.Filing of Appeals -
A.An appeal to the Appellate Tribunal shall be filed online on GSTAT Portal in Form prescribed under CGST/SGST/UTGST Rules, 2017 along with the relevant documents.
(i)the cause title shall state “In the Goods and Service Tax Appellate Tribunal” and also set out the proceedings or order of the authority against which it is preferred;
(ii)appeal shall be divided into paragraphs and shall be numbered consecutively and each paragraph shall contain as nearly as may be, a separate fact or allegation or point;
(iii)full name, parentage, GSTIN, description of each party and address, as applicable, shall also be set out at the beginning of the appeal and need not be repeated in the subsequent proceedings in the same appeal;
(iv)the names of parties shall be numbered consecutively and a separate line should be allotted to the name and description of each party and these numbers shall not be changed and in the event of the death of a party during the pendency of the appeal, his legal heirs or representative, as the case may be, if more than one shall be shown by sub-numbers.
B.Notwithstanding the number of show cause notices, bills of entry, shipping bills, refund claims/demands, letters or declarations dealt with in the decision or order appealed against, it shall suffice for purposes of these rules that the appellant files one Appeal in prescribed Form against the order or decision of the authority below, along with such number of copies thereof as provided in rule 18(E).
Explanation- In a case where the —
(i)impugned order-in-appeal has been passed with reference to more than one orders-in-original, the prescribed Form for Appeal filed as per CGST/SGST/UTGST Rules 2017 shall be as many as the number of the orders-in-original to which the case relates in so far as the appellant is concerned;
(ii)In case an impugned order is in respect of more than one person, each aggrieved person will be required to file a separate appeal (and common appeals or joint appeals shall not be entertained).
C.Date of presentation of appeals. — The Registrar or, as the case may be, the officer authorised by him, shall endorse on every Form of Appeal the date on which it is presented or deemed to have been presented under that rule and shall sign the endorsement, if the appeal is filed physically.
D.Contents of an appeal Form. Every Form of Appeal shall set forth concisely and under distinct heads, the grounds of appeal and such grounds shall be numbered consecutively and shall be typed in double space of the paper.
Every Form of Appeal, cross-objections, reference applications, stay applications or any other miscellaneous applications shall also be typed neatly in double spacing on the A4 size paper and the same shall be duly paged, indexed and tagged firmly with Form of Appeal in a separate folder.
Every Form of Appeal/application/Cross-objection shall be signed and verified by the appellant/applicant/respondent or the authorised representative to sign Form of Appeal/application/Cross-objection. The appellant/ applicant/ respondent or authorized representative retained by them shall certify as true copy the documents produced before the Appellate Tribunal.
E.What to accompany Form of Appeal — Every Form of Appeal required to be heard by a two-Member Bench shall be
(i) filed in quadruplicate and shall be accompanied by four copies, one of which shall be a certified copy of the order appealed against in the case of an appeal against the original order passed by the adjudicating authority and where such an order has been passed in appeal or revision, four copies (one of which shall be a certified copy) of the order passed in appeal or in revision and four copies of the order of the original authority along with all the relevant documents including relied upon documents.
Explanation. — “Copy” for the purpose of this rule shall mean a true copy certified by the appellant or appellant’s authorized representative to be a true copy.
In an appeal filed under the direction of the Principal Commissioner or Commissioner, one of the copies of the order appealed against shall be an attested copy instead of a certified copy.
In the case of an appeal which can be heard by a single Member, Form of Appeal shall be filed in triplicate and number of copies of the order shall be three instead of four along with all the relevant documents including relied upon documents.
Note: - As to which appeals are to be heard by single Members shall be determined by the President by separate orders in the light of the relevant statutory provisions.
(ii)Where an appeal which can be heard by a Bench is referred to or placed before a larger Bench, the appellant shall immediately furnish additional copy of the Form of Appeal as per additional number of Members of referred Bench and of the order or orders of the lower authorities along with relevant documents.
(iii)A certified copy of the decision or order appealed against along with fees as specified in rule 110(5) of the CGST/SGST/UTGST Rules 2017 shall be submitted online and a final acknowledgement, indicating the appeal number shall be issued thereafter in Form prescribed under CGST/SGST/UTGST Rules 2017, by the Registrar:
(iv)The President may further direct that in case of non-filing of the documents as specified under this Rule, the Registrar or any other authorised officer would be competent to return the specified documents or sets of documents and to receive the same back only after rectification of the defects to the satisfaction of the proper officer or the Bench as the case may be and on the return the case may be assigned a new number.
(v)The Appellate Tribunal may on its own motion direct the preparation of as many copies as may be required of all the relevant documents including relied upon documents by and at the cost of the appellant or the respondent, containing copies of such statements, papers or documents as it may consider necessary for the proper disposal of the appeal.
(vi)President may by a general or special order allow attestation of the documents filed along with appeal/application or as a part of relevant documents including relied upon documents or otherwise by a gazetted officer or such other person as may be authorised by the President to attest or certify such documents or photo copies thereof.
(vii)All relevant documents including relied upon documents shall be clearly legible, duly paged, indexed and tagged firmly.
F.Endorsement and verification.- At the foot of every appeal or pleading along with all the relevant documents including relied upon documents, there shall appear the name and signature of the authorised representative and every appeal or pleadings shall be signed and verified by the party concerned in the manner provided by these rules.
(i)Translation of document. - (a) A document other than English language intended to be used in any proceeding before the Appellate Tribunal shall be received by the Registry accompanied by a copy in English, which is agreed to by both the parties or certified to be a true translated copy by the authorised representative engaged on behalf of parties in the case;
(b) Appeal or other proceeding shall not be set down for hearing until and unless all parties confirm that all the documents filed on which they intend to rely are in English or have been translated into English and required number of copies are filed with the Appellate Tribunal.
G.Endorsement and scrutiny of petition or appeal or document -(i) If, on scrutiny, the appeal or document is found to be defective, such document shall, after notice to the party, be returned for compliance and if there is a failure to comply within seven days from the date of return, the same shall be placed before the Registrar who may pass appropriate orders.
(ii) The Registrar may for sufficient cause return the said document(s) for rectification or amendment to the party filing the same, and for this purpose may allow to the party concerned such reasonable time as he may consider necessary or extend the time for compliance.
(iii) Where the party fails to take any step for the removal of the defect within the time fixed for the same, the Registrar may, for reasons to be recorded in writing, decline to register the appeal or pleading or document.
H.Registration of proceedings admitted. - On admission of appeal, the same shall be numbered and registered in the appropriate register maintained in this behalf and its number shall be entered therein.
I.Ex-parte amendments. - In every appeal or application, arithmetical, grammatical, clerical and such other errors may be rectified on the orders of the Registrar without notice to Parties.
Provided that no amendments shall be allowed ex-parte after appearance of the respondents.
J.Calling for records. - On the admission of appeal, the Registrar shall, if so directed by the Appellate Tribunal, call for the records relating to the proceedings from the respective Bench of Appellate Tribunal or adjudicating authority and retransmit the same at the conclusion of the proceedings or at any time.
K.Production of authorisation for and on behalf of an applicant/respondent/party. - Where an appeal purported to be instituted by or on behalf of an applicant/respondent/party, the person who signs or verifies the same shall produce along with such appeal, for verification by the Registrar, a true copy of authorization letter empowering such person to do so:
Provided that the Registrar may at any time call upon the party to produce such further materials as he deems fit for satisfying himself about due authorization.
L.Interlocutory applications. - Every interlocutory application for stay, direction, rectification in order, condonation of delay, early hearing, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall include all the information as per the prescribed GSTAT FORM-01 and the requirements prescribed in that behalf shall be complied with by the applicant, besides filing an affidavit supporting the application.
M.Procedure on production of defaced, torn or damaged documents. - When a document produced along with any pleading appears to be defaced, torn, or in any way damaged or otherwise its condition or appearance requires special notice, a mention regarding its condition and appearance shall be made by the party producing the same in the Index of such a pleading and the same shall be verified and initialed by the officer authorized to receive the same.
19.Grounds which may be taken in appeal — The appellant shall not, except by leave of the Appellate Tribunal, urge or be heard in support of any grounds not set forth in the Form of Appeal, but the Appellate Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the Form of Appeal or those taken by leave of the Appellate Tribunal under these rules:
Provided that the Appellate Tribunal shall not rest its decision on any other grounds unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground.
20.Rejection or amendment of Form of Appeal. — (i) The Registrar may, in its discretion, on sufficient cause being shown, accept a Form of Appeal which is not accompanied by the documents referred to in rule 18(E) above or is in any other way defective, and in such cases may require the appellant to file such documents or, as the case may be, make the necessary amendments within such time as it may allow.
The Registrar may reject the Form of Appeal, if the documents referred to therein are not produced, or the amendments are not made, within the time-limit allowed.
The President may in his discretion authorise any officer of the Appellate Tribunal to return any Form of Appeal, application or document(s) which is/are not in accordance with the GSTAT Procedural Rules, 2024. The Officer so authorised may, however, allow the documents to be refiled after removal of the defects in the specified time.
On representation the Bench concerned may in its discretion either accept the Form of Appeal in terms of above rules but the appeal/application may not be restored to its original number unless the Bench allows it to be so restored on sufficient cause being shown.
21.Who may be joined as respondents. — (i) In an appeal or an application by a person other than the [Principal Commissioner or Commissioner], the [Principal Commissioner or Commissioner] concerned shall be made the respondent to the appeal or, as the case may be.
In an appeal or an application by the [(ii)Principal Commissioner or Commissioner], the other party shall be made the respondent to the appeal or, as the case may be, application.
22.Endorsing copies to the party. — A copy each of appeal and relevant documents along with relied upon documents shall be provided to the respondent as well as to the concerned Principal Commissioner or Commissioner, as the case may be, as soon as they are filed.
23.Filing of Form of cross-objections, applications or replies to appeals/applications. — Every Form of cross-objections filed as prescribed under CGST/SGST/UTGST Rules 2017, and every application made, under the provisions of the Act, shall be registered and numbered, and the provisions of these rules, relating to appeals shall, so far as may be, apply to such Form or application.
24.Filing of Reply and other Documents by the Respondents. - (i) Each respondent may file his reply to the petition or the application and copies of the documents, either in person or through an authorised representative, with the registrar as specified by the Appellate Tribunal within one month and on the receipt thereof.
(ii) A copy of the reply or the application and the copies of other documents shall be forthwith served on the applicant by the respondent.
(iii) To the reply or documents filed under sub-rule (i), the respondent shall specifically admit, deny or rebut the facts stated by the applicant in his petition or application and state such additional facts as may be found necessary in his reply.
25.Filing of Rejoinder. - Where the respondent states such additional facts as may be necessary for the just decision of the case, the Bench may allow the petitioner to file a rejoinder to the reply filed by the respondent, with an advance copy to be served upon the respondent within one month or within such time as may be specified/extended by Bench.
Chapter IV:
Cause list
26.Preparation and publication of daily cause list. - (i) The Registrar shall prepare and publish which shall include all the information as in the prescribed Format GSTAT REG-01 on the notice board of the Appellate Tribunal before the closing of working hours on each working day the cause list for the next working day and subject to the directions of the President, listing of cases in the daily cause list shall be in the following order of priority, unless otherwise ordered by the concerned Bench; namely; -
(a) cases for pronouncement of orders;
(b) cases for clarification;
(c)cases for admission;
(d)cases for orders or directions;
(e)part-heard cases, latest part-heard having precedence; and
(f)cases posted as per numerical order or as directed by the Bench;
The Registrar shall communicate to the parties the date and place of hearing of the appeal or application.
(ii) The title of the daily cause list shall consist of the number of the appeal, the day, date and time of the sitting Bench Hall number and the coram indicating the names of the, Judicial members and Technical members constituting the Bench.
(iii) Against the number of each case listed in the daily cause list, the following shall be shown, namely;-
(a)names of the legal practitioners or authorised representative appearing for both sides and setting out in brackets the designation of the parties whom they represent;
(b)names of the parties, if unrepresented, with their ranks in brackets.
27.New cause list and adjournment of cases on account of non-sitting of an Appellate Tribunal - (i) If by reason of declaration of holiday or for any other unforeseen reason, the Appellate Tribunal does not function for the day, the new daily cause list shall be prepared for the cases listed for the day.
(ii) When the sitting of a particular Bench is cancelled for the reason of inability of any Member of the Bench, the Registrar shall, unless otherwise directed, adjourn the cases posted before that Bench to a convenient date.
(iii) The adjournment or posting or directions shall be notified on the notice board.
28.Service of Notices and processes. - (i) Any notice or process to be issued by the Appellate Tribunal may be served by post or at the e-mail address as provided in the petition or application or in the reply;
(ii) The notice or process if to be served physically may be served in any one of the following modes as may be directed by the Appellate Tribunal; -
(a)by hand delivery through a process server or respective authorised representative;
(b)by registered post or speed post with acknowledgment due.
(iii) Notwithstanding anything contained in sub-rules (i), the Appellate Tribunal may after taking into account the number of respondents and their place of residence or work or service could not be effected in any manner and other circumstances, direct that notice of the petition or application shall be served upon the respondents in any other manner, including any manner of substituted service, as it appears to the Appellate Tribunal just and convenient.
(iv) A notice or process may also be served on an authorised representative of the applicant or the respondent, as the case may be, in any proceeding or on any person authorised to accept a notice or a process, and such service on the authorised representative shall be deemed to be a proper service.
Chapter V:
Hearing of Appeal
29.Hearing of appeal — On the day fixed, or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal. The Appellate Tribunal shall then, if necessary, hear the respondent against the appeal and in such a case the appellant shall be entitled to reply.
30.Action on appeal for appellant’s default — Where on the day fixed for the hearing of the appeal or on any other day to which such hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Appellate Tribunal may, in its discretion, either dismiss the appeal for default or hear and decide it on merits:
Provided that where an appeal has been dismissed for default and the appellant appears afterwards and satisfies the Appellate Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Appellate Tribunal shall make an order setting aside the dismissal and restore the appeal.
31.Hearing of appeals ex parte — Where on the day fixed for the hearing of the appeal or on any other day to which the hearing is adjourned the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Appellate Tribunal may hear and decide the appeal ex parte.
32.Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application — Where in any proceedings the appellant or applicant or a respondent dies or is adjudicated as an insolvent or in the case of a company, is being wound up, the appeal or application shall abate, unless an application is made for continuance of such proceedings by or against the successor-in-interest, the executor, receiver, liquidator or other legal representative of the appellant or applicant or respondent, as the case may be:
Provided that every such application shall be made within a period of sixty days of the occurrence of the event:
Provided further that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period so specified, allow it to be presented within such further period as it may deem fit.
33.Production of additional evidence — (i) The parties to the appeal shall not be entitled to produce any additional evidence, either oral or documentary, before the Appellate Tribunal, but if the Appellate Tribunal is of opinion that any documents should be produced or any witness should be examined or any affidavit should be filed to enable it to pass orders or for any sufficient cause, or if adjudicating authority or the appellate or revisional authority has decided the case without giving sufficient opportunity to any party to adduce evidence on the points specified by them or not specified by them, the Appellate Tribunal may, for reasons to be recorded, allow such documents to be produced or witnesses to be examined or affidavits to be filed or such evidence to be adduced.
(ii) The production of any document or the examination of any witness or the adducing of any evidence under sub-rule (i) may be done either before the Appellate Tribunal or before such authority as the Appellate Tribunal may direct.
(iii) Where any direction has been made by the Appellate Tribunal to produce any documents or to examine any witnesses or to adduce any evidence before any authority, the authority shall comply with the directions of the Appellate Tribunal and after such compliance send the documents, the record of the deposition of the witnesses or the record of evidence adduced, to the Appellate Tribunal.
(iv) The Appellate Tribunal may, of its own motion, call for any documents or summon any witnesses on points at issue, if it considers necessary to meet the ends of justice.
34.Production of Evidence by Affidavit - (i) The Appellate Tribunal may direct the parties to give evidence, if any, by affidavit.
(ii) Notwithstanding anything contained in sub-rule (i), where the Appellate Tribunal considers it necessary in the interest of natural justice, it may order cross-examination of any deponent on the points of conflict either through information and communication technology facilities such as video conferencing or otherwise as may be decided by the Appellate Tribunal, on an application moved by any party.
35.Adjournment of appeal — The Appellate Tribunal may, on such terms as deem fit and at any stage of the proceedings, adjourn the hearing of the appeal.
36.Proceedings to be open to public — The proceedings before the Appellate Tribunal shall be open to the public:
Provided that the Appellate Tribunal may, if deem fit, order at any stage of the proceedings of any particular case that the public generally or any particular person shall not have access to, or be or remain in, the room or building used by the Appellate Tribunal.
37.Procedure for filing of and disposal of interlocutory Application — The provisions of the rules regarding the filing of interlocutory applications shall, in so far as may be, apply to the filing of applications under this rule (mutatis mutandis).
38.Appeal referred to larger Bench – In case of different opinion of Members of Bench while hearing an appeal, the appeal shall be referred to larger Bench by the President, as it deems fit, for disposal of the appeal.
39.Order to be signed and dated - Every order of the Appellate Tribunal shall be in writing and shall be signed and dated by the Members constituting the Bench concerned. Last date of hearing of the matter shall be typed on the first page of the order. If the order is dictated on the Bench, the date of dictation will be the date of the final order. If the order is reserved, the date of final order will be the date on which the order is pronounced.
In cases, where gist of the decision is pronounced without the detailed order, the last para of the detailed order shall specify the date on which the gist of the decision was pronounced. In such cases, the date of the final order shall be the date on which all the Members of the Bench sign the order. If they sign on different dates, the last of the dates will be the date of the order.
40.Publication of orders — Such of the orders of the Appellate Tribunal as are deemed fit for publication in any authoritative report or the press, may be released for such publication on such terms and conditions as the Appellate Tribunal may lay down.
Chapter VI:
RECORD OF PROCEEDINGS
41.Court Diary —(i) Diaries shall be kept by the Court Officer which shall include all the information as given in form GSTAT REG-02 as may be specified in each appeal or petition or application and they shall be written legibly;
(ii) The diary in the main file shall contain a concise history of the appeal or petition or application, the substance of the order passed thereon and in execution proceedings, it shall contain a complete record of all proceedings in execution of order or direction or rule and shall be checked by the Deputy/Assistant Registrar and initiated once in a fortnight.
42.Order sheet — (i) The Court officer of the Bench shall maintain order sheet which shall include all the information as prescribed in GSTAT FORM-02 in every proceedings and shall contain all orders passed by the Appellate Tribunal from time to time;
(ii) All orders passed by the Appellate Tribunal shall be in English and the same shall be signed by the Members of the Appellate Tribunal constituting the Bench:
Provided that the routine orders, such as call for of the records, put up with records, adjourned and any other order as may be directed by the Member of the Tribunal shall be signed by the Court officer of the Bench;
(iii) The order sheet shall also contain the reference number of the appeal or petition or application, date of order and all incidental details including short cause title thereof.
43.Maintenance of court diary — (i) The Court officer of the Bench shall maintain legibly /on GSTAT portal a Court Diary, wherein he shall record the proceedings of the court for each sitting with respect to the applications or petitions or appeals listed in the daily cause list;
(ii) The matters to be recorded in the court Diary shall include details as to whether the case is adjourned or part-heard or heard and disposed of or heard and orders reserved, as the case may be, along with dates of next sitting wherever applicable.
44.Statutes or citations for reference. —The parties or authorised representative or legal practitioners shall, before the commencement of the proceedings for the day, furnish to the Court officer a list of law journals, reports, statutes and other citations, which may be needed for reference or photocopy of full text thereof.
45.Calling of cases in court. —Subject to the orders of the Bench, the Court officer shall call the cases listed in the cause list in the serial order.
46.Regulation of court work. — (i) When the Appellate Tribunal is holding a sitting, the Deputy/ Assistant Registrar shall ensure –
(a) that no inconvenience or wastage of time is caused to the Bench in making available the services of Court officer or stenographer or peon or attender;
(b) the Court officer shall ensure that perfect silence is maintained in and around the Court Hall and no disturbance whatsoever is caused to the functioning of the Bench and that proper care is taken to maintain dignity and decorum of the court.
(ii) When the Bench passes order or issues directions, the Court officer shall ensure that the records of the case along with proceedings or orders of the Bench are transmitted immediately to the Deputy/Assistant Registrar and the Deputy/Assistant Registrar shall verify the case records received from the Court Officer with reference to the cause list and take immediate steps to communicate the directions or orders of the Bench.
Chapter VII:
MAINTENANCE OF REGISTERS
47.Registers to be maintained. —The following Registers shall be maintained online/offline and posted on a day-to-day basis by such ministerial officer or officer of the Registry may, subject to any order of the President, –
(a) register of un-numbered petitions or appeals (GSTAT-REG-03);
(b) register of petitions or appeals (GSTAT-REG-04); and
(c) register of interlocutory applications(GSTAT-REG-05);
48.Arrangement of records in pending matters. —The record of appeal or petition shall be divided into the following four parts and shall be collated and maintained –
(a) main file: (Petition being kept separately);
(b) miscellaneous application file;
(c) process file; and
(d) execution file
49.Contents of main file. —The main file shall be kept in the following order and it shall be maintained as permanent record till ordered to be destroyed under the rules –
(a) index;
(b) order sheet;
(c) final order or judgment;
(d) Form of Appeal or petition, as the case may be, together with any schedule annexed thereto;
(e) counter or reply or objection, if any;
(f) (i) oral evidence or proof of affidavit;
(ii) evidence taken on commission; and
(iii) documentary evidence;
(g) written arguments.
50.Contents of process file. —The process file shall contain the following items; namely –
(a) index;
(b) power of attorney or vakalatnama;
(c) summons and other processes and affidavits relating thereof;
(d) applications for summoning witness;
(e) letters calling records; and
(f) all other miscellaneous papers such as postal acknowledgements.
51.Contents of Execution file. —The execution file shall contain the following items, namely-
(a) index;
(b) the order sheet;
(c) the execution application;
(d) all processes and other papers connected with such execution proceedings;
(e) transmission of order to civil court, if ordered; and
(f) result of execution;
52.File for miscellaneous applications —For all miscellaneous applications there may be only one file with a title page prefixed to it and immediately after the title page, the diary, the miscellaneous applications, supporting affidavit, the order sheet and all other documents shall be filed.
53.Preservation of Record — (i) All necessary documents and records relating to petitions or applications dealt with by the Appellate Tribunal shall be stored or maintained as provided in these rules and other physical records kept in a record room shall be preserved for a period of five years after the passing of the final order;
(ii) Notwithstanding anything contained in sub-rule (i) the record of the petitions or applications dealt with by the Appellate Tribunal including the orders and directions passed by the Appellate Tribunal, shall be maintained by the Registry of the Appellate Tribunal for a period of fifteen years after the passing of the final order.
54.Retention, Preservation and Destruction of Records. — (i) The Record Keeper or any other officer so designated shall be responsible for the records consigned to the Record Room. He shall scrutinize the records received by him within three days and prepare an index in prescribed Format;
(ii) On the expiry of the period for preservation of the records specified under rule 53, the Registrar shall weed out the record.
Chapter VIII:
INSPECTION OF RECORD
55.Inspection of the records. - The applicant to any case or their authorised representative may be allowed to inspect the record of the case by making an application in writing in prescribed GSTAT-FORM-03 to the Registrar and by paying the fee prescribed as per Schedule of Fee.
56.Grant of inspection. - Inspection of records of a pending or decided case before the Appellate Tribunal shall be allowed only on the order of the Registrar.
57.Application for grant of inspection. - (i) Application for inspection of record under rule 55, shall be presented at Registry between 10.30 AM to 01:30 PM on any working day and two days before the date on which inspection is sought, unless otherwise permitted by the Registrar;
(ii) The Registry shall submit the application with its remarks before the Registrar, who shall, on consideration of the same, pass appropriate orders;
(iii) Inspection of records of a pending case shall not ordinarily be permitted on the date fixed for hearing of the case or on the preceding day.
58.Mode of inspection. - (i) On grant of permission for inspection of the records, the Deputy/Assistant Registrar shall arrange to procure the records of the case and allow inspection of such records on the date and time fixed by the Registrar between 10.30 AM and 12.30 PM and between 2.30 PM and 4.30 PM in the immediate presence of an officer authorised in that behalf by the Registrar;
(ii) The person inspecting the records shall not in any manner cause dislocation, mutilation, tampering or damage to the records in the course of inspection;
(iii) The person inspecting the records shall not make any marking on any record or paper so inspected and taking notes;
(iv) The person supervising the inspection, may at any time prohibit further inspection, if in his opinion, any of the records are likely to be damaged in the process of inspection or the person inspecting the records has violated or attempted to violate the provisions of these rules and shall immediately make a report about the matter to the Registrar and seek further orders from the Registrar and such notes shall be made in the Inspection Register.
59.Maintenance of register of inspection. - The Deputy/Assistant Registrar shall cause to maintain a Register as per GSTAT REG-06 for the purpose of inspection of documents or records and shall obtain therein the signature of the person making such inspection on the Register as well as on the application on the conclusion of inspection.
Chapter IX:
Appearance of authorised representative
60.Appearance of authorised representative - Subject to as hereinafter provided, no legal practitioner or authorised representative shall be entitled to appear and act, in any proceeding before the Appellate Tribunal unless he files into Appellate Tribunal vakalatnama or Memorandum of Appearance or letter of authorisation which shall include all the information as prescribed in GSTAT FORM-04 as the case may, duly executed by or on behalf of the party for whom he appears.
61.Consent for engaging or change of authorised representative (Duly stamped as per the respective High Court Rules) - A legal practitioner or authorised representative proposing to file a Vakalatnama or Memorandum of Appearance or letter of authorisation as the case may be, in any pending case or proceeding before the Appellate Tribunal in which there is already a legal practitioner or authorised representative on record, shall do so only with the written consent of the legal practitioner or the authorised representative on record or when such consent is refused, with the permission of the Appellate Tribunal after revocation of Vakalatnama or Memorandum of Appearance as the case may be, on an application filed in this behalf, which shall receive consideration only after service of such application on the counsel already on record.
62.Restrictions on appearance - A legal practitioner or the authorised representative as the case may be, who has tendered advice in connection with the institution of any case or other proceeding before the Appellate Tribunal or has drawn pleadings in connection with any such matter or has during the progress of any such matter acted for a party, shall not, appear in such case or proceeding or other matter arising there from or in any matter connected therewith for any person whose interest is opposed to that of his former client, except with the prior permission of the Appellate Tribunal.
63.Restriction on party’s right to be heard - The party who has engaged a legal practitioner or authorised representative to appear for him before the Appellate Tribunal may be restricted by the Appellate Tribunal in making presentation before it.
64.Empanelment of special authorised representatives by the Appellate Tribunal - (i) The Appellate Tribunal may draw up a panel of authorised representatives or valuers or such other experts as may be required by the Appellate Tribunal to assist in proceedings before the Appellate Tribunal;
(ii) The President may call upon any of the persons from panel under sub-rule (i) for assistance in the proceedings before the Bench, if so required;
(iii) The remuneration payable and other allowances and compensation admissible to such persons shall be specified in consultation with the Appellate Tribunal.
65.Professional dress for the authorised representatives. - While appearing before the Appellate Tribunal, the authorised representatives shall wear the same professional dress as prescribed in their Code of Conduct.
Chapter X:
AFFIDAVITS
66.Title of affidavits. - Every affidavit shall be titled as ‘Before the Goods and Services Tax Appellate Tribunal (GSTAT).’ followed by the cause title of the appeal or application or other proceeding in which the affidavit is sought to be used.
67.Form and contents of the affidavit. - The affidavit shall conform to the requirements of order XIX, rule 3 of Civil Procedure Code, 1908 (5 of 1908).
68.Persons authorised to attest. - Affidavits shall be sworn or affirmed before an advocate or notary, who shall affix his official seal.
69.Affidavits of illiterate, visually challenged persons. - Where an affidavit is sworn or affirmed by any person who appears to be illiterate, visually challenged or unacquainted with the language in which the affidavit is written, the attester shall certify that the affidavit was read, explained or translated by him or in his presence to the deponent and that he seemed to understand it, and made his signature or mark in the presence of the attester which shall include all the information as prescribed in GSTAT FORM-05.
70.Identification of deponent. - If the deponent is not known to the attester, his identity shall be testified by a person known to him and the person identifying shall affix his signature in token thereof.
71.Annexures to the affidavit. - (i) Document accompanying an affidavit shall be referred to therein as Annexure number and the attester shall make the endorsement thereon that this is the document marked putting the Annexure number in the affidavit;
(ii) The attester shall sign therein and shall mention the name and his designation.
Chapter XI:
DISCOVERY, PRODUCTION AND RETURN OF DOCUMENTS
72.Application for production of documents, form of summons. -(i) Except otherwise provided hereunder, discovery or production and return of documents shall be regulated by the provisions of the Code of Civil Procedure, 1908 (5 of 1908);
(ii) An application for summons to produce documents shall be on plain paper setting out the document the production of which is sought, the relevancy of the document and in case where the production of a certified copy would serve the purpose, whether application was made to the proper officer and the result thereof;
(iii) A summons for production of documents in the custody of a public officer other than a court shall include all the information as Prescribed in GSTAT FORM-06 and shall be addressed to the concerned Head of the Department or such other authority as may be specified by the Appellate Tribunal.
73.Suo motu summoning of documents. - Notwithstanding anything contained in these rules, the Appellate Tribunal may, suo motu, issue summons for production of public document or other documents in the custody of a public officer.
74.Marking of documents. - (i) The documents when produced shall be marked as follows:
(a) If relied upon by the appellant’s or petitioner’s side, they shall be numbered as ‘A’ series;
(b) If relied upon by the respondent’s side, they shall be marked as ‘B’ series;
(c) The Appellate Tribunal exhibits shall be marked as ‘C’ series.
(ii) The Appellate Tribunal may direct the applicant to deposit with the Appellate Tribunal through online mode a sum sufficient to defray the expenses for transmission of the records.
75.Return and transmission of documents. - (i) An application for return of the documents produced shall be numbered and no such application shall be entertained after the destruction of the records;
(ii) The Appellate Tribunal may, at any time, direct return of documents produced subject to such conditions as it deems fit.
Chapter XII:
EXAMINATION OF WITNESSES AND ISSUE OF COMMISSIONS
76.Procedure for examination of witnesses, issue of Commissions - The provisions of the Orders XVI and XXVI of the Code of Civil Procedure, 1908 (5 of 1908), shall mutatis mutandis apply in the matter of summoning and enforcing attendance of any person and examining him on oath and issuing commission for the examination of witnesses or for production of documents.
77.Examination in camera. - The Appellate Tribunal may in its discretion examine any witness in camera.
78.Form of oath or affirmation to witness. - Oath shall be administered to a witness in the following form:
“I do swear in the name of God/solemnly affirm that what I shall state shall be truth, the whole truth and nothing but the truth”.
79.Form of oath or affirmation to interpreter. - Oath or solemn affirmation shall be administered to the interpreter in the following form before the Bench Officer or the Court Officer as the case may be, as taken for examining a witness:
“I do swear in the name of God/solemnly affirm that I will faithfully and truly interpret and explain all questions put to and evidence given by witness and translate correctly and accurately all documents given to me for translation.”
80.Officer to administer oath. - The oath or affirmation shall be administered by the Court officer.
81.Form recording of deposition. - (i) The Deposition of a witness shall be recorded in prescribed GSTAT FORM-07;
(ii) Each page of the deposition shall be initialed by the Members constituting the Bench;
(iii) Corrections, if any, pointed out by the witness may, if the Bench is satisfied, be carried out and duly initialed. If not satisfied, a note to the effect be appended at the bottom of the deposition.
82.Numbering of witnesses - The witnesses called by the applicant or petitioner shall be numbered consecutively as PWs and those by the respondents as RWs.
83.Grant of discharge certificate - Witness discharged by the Appellate Tribunal may be granted a certificate in prescribed GSTAT FORM-08 by the Registrar.
84.Witness allowance payable - (i) Where the Appellate Tribunal issues summons to a Government servant to give evidence or to produce documents, the person so summoned may draw from the Government travelling and daily allowances admissible to him as per rules;
(ii) Where there is no provision for payment of Travelling Allowances and Daily Allowance by the employer to the person summoned to give evidence or to produce documents, he shall be entitled to be paid as allowance, (a sum in the opinion of the Registrar sufficient to defray the travelling and other expenses considering unemployed or retired person diet money in addition to T.A.), having regard to the status and position of the witness;
(iii) The party applying for the summons shall deposit with the Registrar the amount of allowance as estimated by the Registrar well before the summons is issued;
(iv) If the witness is summoned as a court witness, the amount estimated by the Registrar shall be paid as per the directions of the Appellate Tribunal;
(v) The aforesaid provisions would govern the payment of bhatta to the interpreter as well.
85.Records to be furnished to the Principal Commissioner or Commissioner - (i) The Principal Commissioner or Commissioner shall be furnished by the Appellate Tribunal with such of the records of the case as the Appellate Tribunal considers necessary for executing the Commission;
(ii) Original documents shall be furnished only if a copy does not serve the purpose or cannot be obtained without unreasonable expense or delay and delivery and return of records shall be made under proper acknowledgement.
86.Taking of specimen handwriting, signature etc. -The Principal Commissioner or Commissioner may, if necessary, take specimen of the handwriting, signature or fingerprint of any witness examined before him.
Chapter XIII:
DISPOSAL OF CASES AND PRONOUNCEMENT OF ORDERS
87.Disposal of Cases. - On receipt of an application, petition, appeal etc, the Appellate Tribunal, after giving the parties a reasonable opportunity of being heard, pass such orders thereon as it thinks fit:
Provided that the Appellate Tribunal, after considering an appeal, may summarily dismiss the same, for reasons to be recorded, if the Appellate Tribunal is of opinion that there are no sufficient grounds for proceedings therewith.
88.Operative portion of the order. - All orders or directions of the Bench shall be stated in clear and precise terms in the last paragraph of the order.
89.Corrections. - Every Member of the Bench who has prepared the order shall initial all corrections and affix his initials at the bottom of each page.
90.Power to impose Costs. - The Appellate Tribunal may, in its discretion, pass such order in respect of imposing costs on the defaulting party as it may deem fit.
91.Pronouncement of Order. - (i) The Appellate Tribunal, after hearing the applicant and respondent, shall make and pronounce an order either at once or, as soon as thereafter as may be practicable but not later than thirty days from the final hearing excluding vacations or holidays;
(ii) Every order of the Appellate Tribunal shall be in writing and shall be signed and dated by the President or Member or Members constituting the Bench which heard the case and pronounced the order;
(iii) A certified copy of every order passed by the Appellate Tribunal shall be given to the parties;
(iv) The Appellate Tribunal, may transmit order made by it to any court for enforcement, on application made by either of the parties to the order or suo motu;
(v) Every order or judgment or notice shall bear the seal of the Appellate Tribunal.
92.Pronouncement of order by any one member of the Bench –
(i) Any Member of the Bench may pronounce the order for and on behalf of the Bench;
(ii) When an order is pronounced under this rule, the Court officer shall make a note in the order sheet, that the order of the Bench consisting of President or Members was pronounced in open court on behalf of the Bench.
93.Authorising any member to pronounce order (i) If the Members of the Bench who heard the case are not readily available or have ceased to be Members of the Appellate Tribunal, the President may authorise any other Member to pronounce the order on his behalf after being satisfied that the order has been duly prepared and signed by all the Members who heard the case;
(ii) The order pronounced by the Member so authorised shall be deemed to be duly pronounced;
(iii) The Member so authorised for pronouncement of the order shall affix his signature in the order sheet of the case stating that he has pronounced the order as provided in this rule;
(iv) If the order cannot be signed by reason of death, retirement or resignation or for any other reason by anyone of the Members of the Bench who heard the case, it shall be deemed to have been released from part heard and listed afresh for hearing.
94.Recusal - (1) For the purpose of maintaining the high standards and integrity of the Appellate Tribunal, the President or a Member of the Appellate Tribunal shall recuse himself:-
(a) in any cases involving persons with whom the President or the Member has or had a personal, familial or professional relationship;
(b) in any cases concerning which the President or the Member has previously been called upon in another capacity, including as advisor, representative, expert or witness; or
(c) if there exists other circumstances such as to make the President or the Member’s participation seem inappropriate.
(2) The President or any Member recusing himself may record reasons for recusal:
Provided that no party to the proceedings or any other person shall have a right to know the reasons for recusal by the President or the Member in the case.
95.Enlargement of time. - Where any period is fixed by or under these rules, or granted by Appellate Tribunal for the doing of any act, or filing of any document or representation, the Appellate Tribunal may, in its discretion from time to time in the interest of justice and for reasons to be recorded, enlarge such period, even though the period fixed by or under these rules or granted by the Appellate Tribunal may have expired.
96.Rectification of Order. - (i) Any clerical or arithmetical mistakes in any order of the Appellate Tribunal or error therein arising from any accidental slip or omission may, at any time, be corrected by the Appellate Tribunal on its own motion or on application of any party by way of rectification.
(ii) An application under sub-Rule (i) may be made online which shall include all the information as prescribed in GSTAT FORM-01 within one month from the date of the final order for rectification of the final order.
97.General power to amend. – The Appellate Tribunal may, within a period of thirty days from the date of completion of pleadings, and on such terms as to costs or otherwise, as it may think fit, amend any defect or error in any proceeding before it; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceeding.
98.Making of entries by Court officer. - Immediately on pronouncement of an order by the Bench, the Court officer shall make necessary endorsement on the case file regarding the date of such pronouncement, the nature of disposal and the constitution of the Bench pronouncing the order and he shall also make necessary entries in the court diary which shall include all the information as prescribed in GSTAT REG-02 maintained by him.
99.Transmission of order by the Court officer. - (i) The Court officer shall immediately on pronouncement of order, transmit the order with the case file to the Deputy/ Assistant Registrar;
(ii) On receipt of the order from the Court officer, the Deputy/Assistant Registrar shall after due scrutiny, satisfy himself that the provisions of these rules have been duly complied with and in token thereof affix his initials with date on the outer cover of the order;
(iii) The Deputy/Assistant Registrar shall thereafter cause to transmit the case file and the order to the Registrar for taking steps to prepare copies and their communication to the parties.
100.Format of order. - (i) All orders shall be neatly and fairly typewritten in double space on one side only on durable foolscap folio paper of metric A-4 size (30.5 cm long and 21.5 cm wide) with left side margin of 5 cm and right-side margin of 2.5 cm. Corrections, if any, in the order shall be carried out neatly and sufficient space may be left both at the bottom and at the top of each page of the order to make its appearance elegant;
(ii) Members constituting the Bench shall affix their signatures in the order of their seniority from right to left.
101.Indexing of case files after disposal. - After communication of the order to the parties or authorised representative, the official concerned shall arrange the records with pagination and prepare in the Index Sheet in Format prescribed by the Appellate Tribunal. He shall affix initials and then transmit the records with the Index initials to the records room.
102.Copies of orders in library. - (i) The officer in charge of the Registry shall send copies of every final order to the library of the Appellate Tribunal;
(ii) Copies of all orders received in each month shall be kept at the library in a separate folder, arranged in the order of date of pronouncement, duly indexed and stitched;
(iii) At the end of every year, a consolidated index shall also be prepared and kept in a separate file in the library;
(iv) The order folders and the indices may be made available for reference in the library to the authorised representative.
Chapter XIV:
Goods and Services Tax Appellate Tribunal Orders
103.Register of Appeals, Petitions, etc.- (i) A Register in prescribed GSTAT REG-07 & 08 shall be maintained in regard to appeals, petitions, etc., against the orders of the Appellate Tribunal to the Hon’ble Supreme Court and Hon’ble High Courts and necessary entries therein be promptly made by the judicial branch;
(ii) The register shall be placed for scrutiny by the President/Vice President, as the case may be, in the first week of every month.
104.Placing of order of Hon’ble Supreme Court and Hon’ble High Courts before the Appellate Tribunal - Whenever an interim or final order passed by the Hon’ble Supreme Court/ Hon’ble High Courts in an appeal or other proceeding preferred against a decision of the Appellate Tribunal is received, the same shall forthwith be placed before the President and same Bench of Members for information and kept in the relevant case file and immediate attention of the Registrar shall be drawn to the directions requiring compliance.
105.Registrar to ensure compliance of Hon’ble Supreme Court or Hon’ble High Courts orders - It shall be the duty of the Registrar to take expeditious steps to comply with the directions of the Hon’ble Supreme Court/Hon’ble High Courts matter pertains to the Appellate Tribunal.
106.Fees — (i) In respect of the several matters, there shall be paid fees as prescribed in the Schedule of Fees appended to these rules;
Provided that no fee shall be payable or shall be liable to be collected on a petition or application filed or reference made by any departmental authority connected with a matter in question before the Appellate Tribunal.
(ii) In respect of every interlocutory application, there shall be paid fees as prescribed in Schedule of Fees of these rules:
Provided that no fee shall be payable or shall be liable to be collected on a petition or application filed or reference made by any departmental authority connected with a matter in question before the Appellate Tribunal.
(iii) In respect of a petition or appeal or application filed or references made before the Principal Bench or the Bench of the Appellate Tribunal, fees referred to in this Part shall be paid by means of a bank demand draft or Indian Postal Order drawn in favour of the Pay and Accounts Officer, Ministry of Finance, New Delhi, as the case may be or as decided by the President.
107.Award of costs in the proceedings — (i) Whenever the Appellate Tribunal deems fit, it may award cost for meeting the legal expenses of the respondent of defaulting party.
(ii) The Appellate Tribunal may in suitable cases direct appellant or respondent to bear the cost of litigation of the other side, and in case of abuse of process of court, impose exemplary costs on defaulting party.
108.Dress for the Members — The dress for the Members shall be such as the President may prescribe.
109.Dress for the parties — Every authorised representative other than a relative or regular employee of a party shall appear before the Appellate Tribunal in his professional dress, if any, and, if there is no such dress, —
(i)if a male, in a close-collared black coat, or in an open-collared black coat, with white shirt and black tie; or
(ii)if a female, in a black coat over a white sari or any other white dress :
Provided that during the summer season from 15th April to 31st August, the authorised representatives may, when appearing before a Bench of the Appellate Tribunal, dispense with the wearing of a black coat.
Explanation. - For the purpose of this Rule, the expression, “regular employee of a party‟ shall not include a departmental officer who is appointed as an authorised representative.
110. Removal of difficulties and issue of directions.- Notwithstanding anything contained in the rules, wherever the rules are silent or not provisions is made, the President may issue appropriate directions to remove difficulties and issue such orders or circulars to govern the situation or contingency that may arise in the working of the Appellate Tribunal.
111.Inspection by the President – The President, Principal Bench, or any Judicial or Technical Member of the Principal Bench, nominated by the President, shall have the authority to inspect the office and proceedings of the State Benches, as per procedure & Rules for travel and inspection decided by the President and the Member of the Appellate Tribunal.
GSTAT FORM -01
[See rule 18(L) and 37]
Interlocutory Application to the Appellate Tribunal
1. GSTIN/ Temporary ID /UIN –
2. Name of the appellant –
3. Address of the appellant –
4. Original Appeal Number- Date-
5. Date of last hearing –
6. Name of the representative –
7. Purpose of the Interlocutory application –
8. Whether the appellant wishes to be heard in person? -
9. Statement of facts -
10. Grounds of appeal -
11. Prayer -
Place: Date:
Signature
Name of the Applicant:
Designation /Status:
GSTAT FORM -02 - ORDER SHEET
[See rule 42]
(in Appeal)
No........................................ Registrar
Appellate Tribunal
(Appellant) Vs (Respondent)
------------------------------------------------------------------------------------------
Sl. No., or Brief order, mentioning How complied
Order and date Reference, if necessary with & date of
compliance
------------------------------------------------------------------------------------------
1. Form of Appeal presented by hand/
received by post/ Online from Appellant on...........................has been registered.
It is in order .........................
It is not in order for the reasons stated.
1.
2.
3.
4.
For Deputy/ Assistant Registrar
2. A copy of Order be
sent to the respondent/appellant
For Deputy/Assistant Registrar Dispatched on.........
Format of Indexing
[See rule 54 & 101]
1.Appeal No.-
2.Appellants’ Name(s), (GSTIN, if any) and Address –
3.Respondent name(s), (GSTIN, if any) and Address –
4.No. of Order in Appeal –
5.Period of dispute –
6.Section under which original order passed –
7.State Jurisdiction –
8.Bench to which assigned and whether single member case-
9.Name of Members -
10.Date of Hearings -
11.Interim Order, if any with date –
12.Date of final appeal order -
13.Nature of order allowed, partly allowed or dismissed –
14.Remarks –
GSTAT FORM-03 - INSPECTION
[See rule 55]
Application to the Registrar for inspection of records
1. GSTIN/ Temporary ID /UIN –
2. Name of the appellant –
3. Address of the appellant –
4. Original Appeal/Order Number - Date-
5. Grounds of inspection –
6. Purpose of inspection –
7. Details of payment -
8. Detail of documents for inspection –
(i) ………..
(ii) ………..
(iii) ……………
9. Remarks, if any -
Place: Date:
Signature
Name of the Applicant:
Designation /Status:
SCHEDULE OF FEES
S.No. Relevant Section/Rules Nature of application / petition Fees
1. Rule 55 of GSTAT Procedural Rules 2024 Application for Inspection of Records 5,000/-
2. Rule 106(ii) of GSTAT procedural Rules 2024 Interlocutory Applications 5000/-
3. Rule 110(5) of CGST/SGST/UTGST Rules 2017 Appeals to GSTAT As per rule
4. Application under any other provisions specifically not mentioned herein above 5,000/-
5. Fee for obtaining certified true copy of final order passed to parties other than the concerned parties under Rule 5/- per page
GSTAT FORM-04
(see rule 60)
Memorandum of appearance
To
The Registrar,
The Goods and Services Tax Appellate Tribunal
In the matter of …………. Petitioner.
Vs.
………………..Respondent
(Appeal No. ………of 20………)
Sir,
Please take notice that I, …….., authorised representative/ practising Chartered Accountant/practising Cost Accountant/ legal practitioner, duly authorised to enter appearance, and do hereby enter appearance, on behalf of …………….. petitioner/ respondent/ Registrar/ Government of ………………….. in the above-mentioned petition.
*A copy of the authorisation/vakalatnama passed by the Appellant/Respondent authorising me to enter appearance and to act for every purpose connected with the proceedings for the said party is enclosed, duly signed by me for identification.
Yours sincerely,
Dated ………. day of ……………
Address:
Enclosure: as aforesaid Tele No.:
GSTAT FORM-05
BEFORE THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
[See Rule 69]
Certification when deponent is unacquainted with the language of the affidavit or is blind or illiterate.
Contents of the affidavit were truly and audibly read over/translated into ………............... language known to the deponent and he seems to have understood the same and affixed his Left Thumb Impression/Signature/Mark.
(Signature)
Name and designation with date.
GSTAT FORM-06 - SUMMONS
BEFORE THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
[See Rule 72]
To,
…………
Whereas the Appellate Tribunal suo motu or on consideration of the request made by Shri/ Smt/ M/s …………………..(Appellant/Respondent) having been satisfied that production of the following documents or records under your control or custody is necessary for proper decision of the above case, you are hereby directed to cause production of the said documents/records before this Tribunal /forward duly authenticated copies thereof on or before the …………………day of…..20………
(Enter description of documents requisitioned)
“By Order of Appellate Tribunal”
Registrar
GSTAT FORM-07
[See Rule 81]
BEFORE THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
Appeal No…………… of 20……………
Deposition of Petitioner’s Witness/Respondent’s Witness
1. Name :
2. Father’s/Mother’s/Husband’s Name :
3. Age :
4. Occupation :
5. Place of Residence and address :
6. Name of the Officer administering the
Oath / affirmation :
7. Name of the Interpreter if any, duly
Sworn/ solemnly affirmed :
Duly sworn/ solemnly/ affirmed
Examination-in-chief: By
Date:
…………………………………………………………………….
Cross-examination: By
……………………………………………………………………
Re-examination, if any:
……………………………………………………………………
(Signature of the witness on each page)
Statement of witness as recorded was read over/translated to the witness, who admitted it to be correct.
Signature of the Member of the Appellate Tribunal with date
GSTAT FORM-08
[See Rule 83]
CERTIFICATE OF DISCHARGE
Certified that …………………………………………… appeared before this Appellate Tribunal as a witness/in/Appeal No. …………………………..of 20……, on behalf of the appellant or respondent as Court witness on this ……………day of ….20…… and that he was relieved at ………………….on…………………… He was paid/not paid any T.A. and D.A. or allowance of Rs……………….
Date : Signature of the Registrar
(Seal of the Appellate Tribunal)
CAUSE LIST- GSTAT REG-01
[See rule 26]
Date:
Sl.No. Court No. & Time Name of the Members Appeal No. Interlocutory Application/ Main Application Purpose Section Name of Parties Name of AR for Petitioner/ Appellant Name of counsel for Respondent Remarks
GSTAT REG-02 - COURT DIARY
[See rule 41 & 98]
Sl. No. Appeal No. Appellant/ Respondent Time at which sitting of Bench commenced Time at which the Bench rose for lunch break Time at which Bench re-assembled Time at which the Bench finally rose for the day Whether the judgement is dictated in the open court, if so by which Member and Which SPS/PA took dictation If not, Member to whom the case is assigned for passing the order Whether the matter is part-heard, if so the next date given for hearing Whether order is reserved, if so, the date of pronouncement of the order Whether matter is adjourned with date then the next date of hearing Initials of Gazetted Officer Remarks
1 2 3 4 5 6 7 8 9 10 11 12 13 14
GSTAT-REG-03 - Register of Provisional Appeals
[See rule 47(a)]
Sl.
No. Prov. Appeal No. Appellants’ Name(s) and Address Respondent name(s) and Address No. of Order in Appeal State Jurisdiction Appeal accepted or rejected with date Payment of fee Remarks
1 2 3 4 5 6 7 8 9
GSTAT-REG-04- Register of Appeals
[See rule 47(b)]
Sl.
No. Appeal No. Appellants’ Name(s) and Address Respondent name(s) and Address No. of Order in Appeal Period of dispute Section under which original order passed State Jurisdiction Bench to which assigned and whether single member case Interim Order, if any with date Date of final appeal order Nature of order allowed, partly allowed or dismissed Remarks
1 2 3 4 5 6 7 8 9 10 11 12 13
GSTAT-REG-05 - Register of Interlocutory Appeals
[See rule 47(c)]
Sl.
No. Original Appeal No. No. of Interlocutory Appeal Appellants’ Name(s) and Address Respondent Name(s) and Address Bench for which application/appeal filed Date of order in interlocutory application Order- whether allowed or dismissed, with date Remarks
1 2 3 4 5 6 7 8 9
GSTAT-REG-06- Register of Inspection
[See rule 59]
Sl.
No. No. of Application with date Name of Applicant and Address No. of Appeal related, if any Application dismissed / allowed with date Payment of Fee Date of Inspection & conclusion Signature of the applicant Inspection Supervisory Officer Remarks
1 2 3 4 5 6 7 8 9
GSTAT REG- 07-SUPREME COURT
[See Rule 103]
Court No. No. of Appeal
Before the GSTAT No. of Order in Appeal Name of the Applicant/ Respondent Date of dispatch
of records to GSTAT Date of receipt of records at GSTAT Appeal dismissed/
allowed with date Interim Direction
If any, with date Final order
in the appeal with date Direction
If any, for compliance by the Appellate Tribunal Steps
Taken for compliance Remarks
1 2 3 4 5 6 7 8 9 10 11 12
GSTAT REG-08 – HIGH COURT
[See Rule 103]
Court No. No. of Appeal
Before the GSTAT No. of Order in Appeal Name of the Applicant/ Respondent Date of dispatch
of records to GSTAT Date of receipt of records at GSTAT Appeal dismissed/
allowed with date Interim Direction
If any, with date Final order
in the appeal with date Direction
If any, for compliance by the Appellate Tribunal Steps
Taken for compliance Remarks
1 2 3 4 5 6 7 8 9 10 11 12
Agenda Item 7(d): Relaxation in the eligibility criteria for selection to the post of Technical Member (State) of Goods and Services Tax Appellate Tribunal (GSTAT) for officers of the state of Goa.
Post the recommendations of the GST Council, relaxation regarding eligibility criteria for selection of Technical Member (State) was conveyed to the State of Goa vide letter F. No. A 50050/102/2023-CESTAT-DOR dated 08.05.2024.
2. In this regard, it may be noted that the search for the Technical Member (State) of the respective State Benches is to be carried out by the concerned State. The eligibility for the Technical Member (State) is governed by section 110(1)(d) of the CGST Act which states as follows:-
A person shall not be qualified for appointment as-
a Technical Member (State), unless he is or has been an officer of the State Government or an officer of All India Service, not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank, not lower than that of the First Appellate Authority, as may be notified by the concerned State Government, on the recommendations of the Council and has completed twenty-five years of service in Group A, or equivalent, with at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government:
Provided that the State Government may, on the recommendations of the Council, by notification, relax the requirement of completion of twenty-five years of service in Group A, or equivalent, in respect of officers of such State where no person has completed twenty-five years of service in Group A, or equivalent, but has completed twenty-five years of service in the Government, subject to such conditions, and till such period, as may be specified in the notification.
3. In this regard, a proposal was earlier received from Government of Goa which was duly brought before the GST Council for recommendations and as per the recommendations, the following approval was conveyed:
"Proposal of the State of Goa for notifying an officer of the Commercial Tax Department of Goa, who has completed at least twenty-five years of service in the Government, as Gazetted Officer, to be eligible for the appointment as Technical Member (State) in the State Bench".
4. Thereafter, another request was received from Government of Goa to relax the eligibility criteria of Technical Member (State) by replacing “an officer of the Commercial Tax Department of Goa" with “an officer of the Government of Goa”. The following rationale has been provided by the State:
i. the highest-level post under the Commercial Tax Department in State of Goa is of State Tax officer (STO) (Group 'B' Gazetted) and all other higher posts i.e. Deputy Commissioner of State Tax (Level 10, Gr. A Gazetted) and Additional Commissioner of State Tax (Level 11, Gr. A Gazetted) are filled from the Goa Civil Services. The post of Commissioner of State Tax is filled from IAS Cadre.
ii. Hence, any State Tax officer (STO), after rendering service as an STO for 5 years may get promotion to GCS holding the post of Junior Scale Officer (JSO) of GCS, even if he is posted as Deputy Commissioner of State Tax in this department, he belongs to Goa Civil service (GCS) and not Commercial Tax Department as such.
iii. Therefore, the relaxation for eligibility criteria of 25 years in Group 'A' was proposed to consider as 25 years of service in Group 'A' and Group B' under the Government of Goa and not in Commercial Tax Department of Government of Goa.
iv. However, the approval for the proposal of relaxation is received for notifying an "officer of the Commercial tax Department of Goa, who has completed at least of 25 years of service in the Government as Gazetted Officer" to be eligible for the appointment as Technical Member (State) in the State Bench.
v. It may therefore not be possible to find any Officer of Commercial Tax Department with 25 years’ service as Gazetted Officer, because after promotion from the post of STO, the Officer goes into Goa Civil Service under Department of Personnel, Govt. of Goa. Similarly, it may not happen that after induction into GCS, the Officer may be posted under Commercial Tax Department continuously for such a long period.
5. It may be seen from section 110(1)(d) of the CGST Act that for an officer of the State Government to be nominated, the law provides that the officer should have "at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government.".
6. Accordingly, approval of GST Council is sought for the proposal of Government of Goa for replacing the wordings "an officer of the Commercial Tax Department of Goa" with "an officer of the Government of Goa". Accordingly, the revised wordings of the approval would stand amended as below:
"Proposal of the State of Goa for notifying an officer of the Government Commercial Tax Department of Goa, who has completed at least twenty-five years of service in the Government, as Gazetted Officer, to be eligible for the appointment as Technical Member (State) in the State Bench".
7. The approval would be subject to other terms and conditions as mentioned in section 110(1)(d) of the CGST Act.
*****
Agenda Item 7(e): Relaxation in eligibility conditions for appointment of Technical Member (State) in GSTAT for the State of Jharkhand.
In context of the GST Appellate Tribunal, it may be noted that where there are in-sufficient number of officers eligible for the post of the Technical Member (State) in the State, the criteria may be relaxed in accordance with the provisions of section 110(1)(d) and proviso thereof of the CGST Act, 2017. In this context, representation has been received from State of Jharkhand seeking such relaxation. Request letter of Jharkhand attached as Annexure – 1.
2. Section 110(1)(d), which provides for relaxation in the qualification for Technical Member (State), is as follows:
110. (1) A person shall not be qualified for appointment as—
a.…
(d) a Technical Member (State), unless he is or has been an officer of the State Government or an officer of All India Service, not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank, not lower than that of the First Appellate Authority, as may be notified by the concerned State Government, on the recommendations of the Council and has completed twenty-five years of service in Group A, or equivalent, with at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government:
Provided that the State Government may, on the recommendations of the Council, by notification, relax the requirement of completion of twenty-five years of service in Group A, or equivalent, in respect of officers of such State where no person has completed twenty-five years of service in Group A, or equivalent, but has completed twenty-five years of service in the Government, subject to such conditions, and till such period, as may be
specified in the notification.
3. Accordingly, Jharkhand state had requested for relaxations in the qualification of Technical Member (State) in respect of the number of years in Government be considered in place of number of years in Group A; and in respect of notifying the Joint Commissioner as the rank of officer eligible for Technical Member State in Jharkhand. State has confirmed that there is no officer currently meeting the present criteria. State has also verbally confirmed that the present first Appellate Authority in the State is of the rank of Joint Commissioner.
4. In light of the above, and as the process of appointment of Members of the GSTAT are to be expedited, approval of GST Implementation Committee was sought on the proposal. The request sought was for a period of ten years, and the details of the same is placed below:
i.To notify an officer of the Commercial Tax Department of Jharkhand, who has completed at least twenty-five years of service in the Government, as Gazetted Officer, to be eligible for the appointment as Technical Member (State); and
ii.To notify the rank of an officer of the State of Jharkhand, not below the rank of “Joint Commissioner of State Tax”, as a minimum qualifying rank of the officer who shall be eligible for Technical Member (State) subject to other conditions of section 110(1)(d) of the CGST Act, 2017.
5. The same was approved by GIC [attached as Annexure – 2], subject to post-facto approval of the GST Council, and was conveyed to the State. Accordingly, the Agenda Note is placed for post-facto approval of the GST Council on Relaxation of eligibility criteria of Technical Member (State) for GST Appellate Tribunal for the State of Jharkhand, as detailed in para 4, earlier provided by the GIC. The said relaxation is applicable for a period of ten years and is subject to the other terms and conditions of section 110(1)(d) of the CGST Act, 2017.
*****
Annexure – 1
Annexure-2
Agenda Item 7(f): Status Report of GoM on restructuring Compensation Cess.
1. GST Council in its 54th GST Council Meeting held on 09.09.2024 in New Delhi recommended to constitute a Group of Ministers (GoM) to make taxation proposal to replace the Compensation Cess after its abolition. Accordingly, a Group of Ministers has been constituted under the chairmanship of Hon’ble Union Minister of State for Finance [OM for constitution of GoM on restructuring of Compensation Cess].
2. The First and second meeting of the GoM have taken place on 16.10.2024 and 12.12.2024 respectively. Deliberations were primarily on the following issues:
i.Recommendation on the treatment of the levy and collection of Cess under the present law for FY 2025-26 and manner of distribution of surplus, if any, at the end March 2026 by which the current levy would lapse.
ii.Recommendation on the future course of action post abolition of Cess (i.e. after 31.03.2026).
3. On the issue of levy and collection of cess for the FY 2025-26, the GoM recommends that the Cess at the present rates should be continued until 31.03.2026. As regards the surplus or excess collection, if any of Cess remaining in the Cess Account at the end of the transition period after meeting the obligations of back to back loan (including interest thereon), the GoM agreed that the same be distributed between the Centre and the States in the ratio of 50:50 as provided under section 10(3) of the GST Compensation to Cess Act, 2017
4. The Ministers felt that more time is required to examine the second issue (i.e) the future course of action post abolition of Cess as it requires analysis of Constitutional, Legal and operational issues of impact on State revenues. Accordingly, GoM decided to seek an extension of time upto June 30, 2025 from the GST Council.
5. Accordingly, the GoM’s recommendation in para 3 above and the proposal in para 4 for extension of tenure of GoM on restructuring Compensation Cess upto 30th June 2025 are placed before the GST Council for approval.
*****
Agenda Item 8: Issues recommended by GSTN.
Agenda Item 8(a): B2C e-Invoicing.
1. In the 54th meeting of the GST Council held on 9th September 2024, the Council had provided in-principle approval for the implementation of B2C e-Invoicing in India on a voluntary basis, for States willing to implement such a project.
2. GSTN is in the advanced stages of developing the proof of concept. Given that B2C e-Invoicing is a large-scale initiative, it is imperative to assess and evaluate the various technology options and implementation methodologies adopted for B2C e-invoicing in other countries in order to learn from such global experience, identify best practices, and integrate these insights into India's B2C e-Invoicing framework.
3. In order to facilitate this evaluation, it is proposed that GSTN conduct a global technology and policy framework evaluation of B2C e-Invoicing implementation in other countries. For this purpose, a few delegations comprising representatives from GSTN, the Department of Revenue, CBIC, and commercial tax departments of States/UTs may visit countries like South Korea, Brazil, Chile, the Russian Federation, Mexico, Saudi Arabia, etc to carry out the evaluation. To maximize knowledge-sharing and insights, it is proposed that each delegation visiting a specific country would include new members.
4. Accordingly, approval of the Council is sought for the above proposal.
***
Agenda Item 8(b): Successful Rollout of IMS.
1. In the 54th meeting of the GST Council, it was informed that the IMS (Invoice Management System) would be rolled out by GSTN as an optional facility. In this regard, GSTN has informed that the functionality has been rolled out for the return period of October, 2024 and is now live on the GST portal.
2. GSTN has made available the following features in the IMS:
i . Actions (Accept/Reject/Pending): Taxpayers can take these actions from October 15, 2024, on records saved in GSTR-1/IFF/1A by the supplier taxpayer until the recipient taxpayer files their corresponding GSTR-3B.
ii. Deemed Accepted: At the time of GSTR-2B generation, a record would be considered "Deemed Accepted" if no action is taken on that record in IMS.
iii. GSTR-2B Generation: Based on actions taken, the first GSTR-2B for the October 2024 period was generated on 14 November 2024.
iv. Recomputing GSTR-2B: Taxpayers can take actions on the draft GSTR-2B and recompute it based on changed actions anytime until filing GSTR-3B.
v. User Adoption: Approximately 5.26 lakh taxpayers have used IMS to take some action on the records uploaded (as of 20 November 2024).
vi. Supplier View: The Supplier View of IMS is available on the UI, allowing suppliers to see the actions taken by their recipients on records/invoices reported in GSTR-1/1A/IFF.
3. The October GSTR-3B has been successfully filed by taxpayers using IMS. GSTN continues to provide support to taxpayers in navigating any IMS-related difficulties. Further, the following enhancements are in the pipeline for IMS and would be rolled out successively:
i. Handling of Credit Notes: Taxpayers would have the option to keep credit notes pending until a specified time. Additionally, for cases where ITC has not been availed or has been permanently reversed, taxpayers would be given the option to not decrease the ITC on accepting the credit note.
ii. Offline Tool: An offline tool would be introduced to handle bulk data
iii. Rejected Section in GSTR-2B: A new section in GSTR-2B would display all rejected records by recipient taxpayers.
iv. Supplier View for GSPs: Extension of Supplier View functionality to GSPs.
4. Proposal before the GST Council
The updated status on the successful rollout of IMS along with the proposed enhancements is submitted for information of the GST Council.
***
Agenda Item 9: Performance Report of Competition Commission of India (CCI), State Level Screening Committee (SLSC), Standing Committee (SC) and DG (Anti-Profiteering) for 2nd Quarter (July-September) of the F.Y 2024-25 for information of the GST Council.
The performance report of Anti-profiteering authorities at various levels for the 2nd Quarter (July to September, 2024) of the Financial Year 2024-25 are as under:
2.1Performance of Competition Commission of India (CCI):
Opening
Balance No. of
Investigation Reports received from DGAP during the quarter Disposal of Cases (During Quarter) Closing
Balance
Total
Disposal during the Quarter No. of cases where Profiteering established No. of cases where Profiteering not established No. of cases referred back to DGAP
Quarter 1st July, 2024 to 30th September, 2024
53 3 10 4 2 4* 46
*2 out of 4 cases which pertain to real estate sector have been sent back to DGAP for re-investigation for re-working the profiteered amount in terms of judgement dated 29.01.2024 of Hon'ble Delhi High Court and remaining 2 cases which pertain to non-real estate sector have been sent back to DGAP for re-investigation on case specific issues.
2.2Performance of DG (Anti-profiteering):
Opening Balance (No. of cases) Receipt Disposal Mode of disposal of cases Closing Balance (No. of cases)
Report to CCI confirming profiteering Report to CCI for closure action
Quarter 1st July, 2024 to 30th September, 2024
141 18 3 0 3 156
2.3Performance report of the Standing Committee on Anti-profiteering:
Opening Balance
(No. of cases) Receipt Disposal Closing Balance
(No. of cases)
Quarter 1st July, 2024 to 30th September, 2024
128 63 97 94
2.4Performance report from the State Level Screening Committee:
Opening
Balance (No. of cases) Receipt Disposal Closing
Balance (No. of cases)
Cases referred
to Standing Committee Cases
Rejected
Quarter 1st July, 2024 to 30th September, 2024
175 70 4 162 79
*Report from the Kerala State Screening has not been received
# The Opening Balance stands revised from 173 to 175 (closing balance of 1st quarter of 2024-25 was 173), as the Karnataka SLSC has now reported 2 cases, which were not reported earlier.
3.During the quarter, CCI has undertaken the following activities/initiatives-
The Quarterly Performance report for the 2nd quarter (July - September) of the F.Y 2024-25 is submitted as under:-
i.The mandate to examine profiteering was vested with Competition Commission of India (CCI) w.e.f. 01.12.2022, as per the Notification No. 23/2022- Central Tax dated 23.11.2022 issued by Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance. The required quorum in the CCI to proceed with the anti-profiteering matters was restored w.e.f. 23.05.2023 with the joining of the Chairperson. Proceedings in anti-profiteering cases had commenced w.e.f. 22.06.2023 and the CCI had passed 54 orders in anti-profiteering cases till 30.09.2024.
ii.W.e.f. 01.10.2024, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has been empowered to examine profiteering as per the Notification No. 18/2024- Central Tax dated 30.09.2024 issued by Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance.
iii.6 Final Orders and 2 Interim Orders have been passed by the CCI during the quarter ending on 30.09.2024. As on 30.09.2024, 46 cases of anti-profiteering were pending with CCI. During the quarter ending on 30.09.2024, 2 cases of real estate sector viz. M/s Lotus Realtech and M/s Royale Urban Space LLP have been sent back to the DGAP for re- investigation for re-working the profiteered amount in terms of judgement dated 29.01.2024 of Hon'ble Delhi High Court.
iv.Six Ordinary meetings of the CCI were held during the quarter ending on 30.09.2024. Therefore, a total of 42 Ordinary meetings were held by the CCI w.e.f. 01.12.2022 till 30.09.2024.
v.1 hearing in a case was accorded by the CCI during the quarter ending on 30.09.2024. In total 44 hearings were given by the CCI w.e.f. 01.12.2022 till 30.09.2024.
vi.W.e.f. 01.12.2022 till 30.09.2024, 149 complaints have been forwarded to the respective Authorities for further necessary action. For the quarter ending on 30.09.2024, out of 11 complaints, 6 complaints relating to profiteering in terms of Section 171 of the CGST Act, 2017 were forwarded to respective Screening Committees/Standing Committee for further action/examination and 5 complaints which related to other GST/Enforcement issues were forwarded to the Jurisdictional State & Central GST Commissioners/Chief Commissioners for necessary action.
4. Accordingly, the Performance Report of Competition Commission of India (CCI), State Level Screening Committee (SLSC), Standing Committee (SC) and DG (Anti-Profiteering) for 2nd Quarter (July-September) of the F.Y 2024- 25 are placed before the GST Council for information.
***
Agenda Item 10: Ad-hoc Exemption Orders issued under section 25 (2) of the Customs Act, 1962 to be placed before the Council for information
In the 26th GST Council meeting held on 10th March, 2018, it was decided that all ad-hoc exemption orders issued with the approval of Hon’ble Finance Minister as per the guidelines contained in Circular No. 09/2014-Customs dated 19th August, 2014, as was the case prior to the implementation of GST, shall be placed before the GST Council for information.
2. The details of the ad-hoc exemption orders issued recently are as follows:
Order No. Date Remarks
AEO No. 6 of 2024 18.10.2024 Request from MEA for ad-hoc exemption from export duty under Section 25 (2) of the Customs Act, 1962 for humanitarian assistance to Zimbabwe, Malawi, Zambia and Namibia in the form of food grains
AEO No. 7 of 2024 27.11.2024 Request for ad-hoc exemption for import of instruments for implementation of pilot project on Glacial Lake Outburst Flood
(GLOF) risk in Sikkim
3. This is placed for the information of GST Council.
Addendum to Agenda Volume-II of the 55th Meeting of the GST Council
Agenda Item 11: Report of Group of Ministers on Life and Health Insurance.
1. The issue of GST on life and health insurance policies was placed before the GST Council in its 54th Meeting held on 09th September 2024 at New Delhi. After detailed deliberations, the GST Council recommended to constitute a Group of Ministers (GoM) to holistically look into the issues pertaining to GST on life insurance and health insurance.
2. A Group of Ministers (GoM) on Life and Health Insurance was constituted in compliance of the recommendation of the GST Council with Sh. Samrat Choudhary, Hon’ble Deputy Chief Minister, Bihar as its Convenor. The other member states of the GoM are Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.
3. The terms of reference for the GoM on Life and Health Insurance were as follows:
i.To examine and review the present tax structure of GST on life and medical insurance; and
ii.To suggest GST rates on
a.health / medical insurance including individual, group, family floater and other medical insurance for various categories like senior citizens, middle class, persons with mental illness, etc;
b.life insurance including term insurance, life insurance with investment plans, whether individual or group; and
c.re-insurance of the above.
4. The GoM held its meeting on the 19th October, 2024 at New Delhi.
5. The GoM undertook a comprehensive examination of the GST framework concerning life and health insurance policies. GoM reviewed the existing tax structure, its financial impact as well as its impact on various demographic groups, including senior citizens.
6. The report of the Group of Ministers on Life and Health Insurance is proposed to be placed before the GST Council.
***
Confidential
Agenda for
55th GST Council Meeting
21st December, 2024
Volume - II
GST Council Secretariat New Delhi
5th Floor, Tower-II, Jeevan Bharti Building, New Delhi
15th November, 2024
OFFICE MEMORANDUM
Subject: Notice for the 55th GST Council Meeting to be held on 21st December, 2024-reg
The undersigned is directed to refer to the above subject and to convey that the 55th Meeting of the GST Council will be held on 21st December, 2024 at Jaisalmer, Rajasthan. The schedule of the meeting is as follows:-
Saturday, 21st December, 2024, from 11.00 A.M. onwards
2. In addition, an Officers’ Meeting will be held on 20th December, 2024 at Jaisalmer, Rajasthan as per the following schedule:
Friday, 20th December, 2024 from 10.00 A.M. onwards
3. The venue of the meeting, agenda items and other details for the 55th Meeting of the GST Council and officers’ Meeting will be communicated in due course of time.
4. Kindly convey the invitation to the Hon’ble Member of the GST Council to attend the 55th Meeting of the GST Council.
Sd/-
(Sanjay Malhotra)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653
Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.
2. PS to the Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.
3. The Chief Secretaries of all the State Governments, Union Territories of Delhi, Puducherry and Jammu and Kashmir with the request to intimate the Minister in charge of Finance/Taxation or any other Minister nominated by the State Government as a Member of the GST Council about the above said meeting.
4. Chairman, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the Council.
5. CEO, GST Network
TABLE OF CONTENTS
(VOLUME-II)
Sl. No. Agenda Item Page No.
7. DoR Agendas:
a) Review of revenue position under Goods and Services Tax 7-15
b) Status update on issues related to IGST Settlement to States 16-82
c) GSTAT Procedure Rules to regulate the procedure for functioning of the GSTAT 83-128
d) Relaxation in the eligibility criteria for selection to the post of Technical Member (State) of GSTAT for officers of the state of Goa. 129-130
e) Relaxation in eligibility conditions for appointment of Technical Member (State) in GSTAT for the State of Jharkhand 131-141
f) Status Report of GoM on restructuring Compensation Cess 142-144
8. Issues recommended by GSTN
a) B2C e-Invoicing 145
b) Successful Rollout of IMS 146
9. Performance Report of Competition Commission of India (CCI) along with Performance Reports of State Level Screening Committee (SLSC), Standing Committee (SC) and Directorate General of Anti-Profiteering (DGAP), for 2nd quarter of the F.Y 2024-25. 147-149
10. Ad-hoc Exemption Orders issued under section 25(2) of the Customs Act, 1962 to be placed before the Council for information 150-154
Any other agenda with the permission of the Chair
Discussion on Agenda Items
Agenda Item 7: DoR Agendas.
Agenda Item 7(a): Review of revenue position under Goods and Services Tax
GST Revenue performance
1.The Figure below shows the trend and Table 1 shows the details of the collection in Apr’24 – Nov’24 vis-à-vis Apr’23 – Nov’23.
Figure 1: Monthly gross GST collection (in ₹ lakh crore)
Table 1: Monthly gross GST collection (₹ crore)
GST Collection Apr’24 May’24 Jun’24 Jul’24 Aug’24 Sep’24 Oct’24 Nov’24
CGST 43,846 32,409 32,627 32,386 30,862 31,422 33,821 34,141
SGST 53,538 40,265 40,715 40,289 38,411 39,283 41,864 43,047
IGST 99,623 87,781 87,310 96,447 93,621 90,594 99,111 91,828
Domestic 61,797 47,902 47,270 49,437 44,593 46,087 54,878 50,093
Imports 37,826 39,879 40,040 47,009 49,028 44,507 44,233 41,736
Comp Cess 13,260 12,284 13,160 12,953 12,068 11,941 12,550 13,253
Domestic 12,252 11,207 12,188 11,923 11,120 11,059 11,688 12,398
Imports 1,008 1,076 972 1,029 948 883 862 855
Gross Collection 2,10,267 1,72,739 1,73,812 1,82,075 1,74,962 1,73,240 1,87,346 1,82,269
YoY Growth 12.4% 10.0% 7.6% 10.3% 10.0% 6.5% 8.9% 8.5%
Less – Refunds
(Domestic + Imports) 18,507 28,410 19,946
16,283
24,460
20,458
19,306 19,259
Net Collection
1,91,760
1,44,329
1,53,866
1,65,792
1,50,502
1,52,782
1,68,040 1,63,010
YoY Growth 15.5% 6.9% 6.3% 14.4% 6.5% 3.9% 7.9% 11.1%
2.Table 2 shows the IGST collected, refunded, and settled/apportioned during FY 2024-25 till Nov, 2024.
Table 2: IGST Collection/Settlement/Apportionment/Refund in FY 2023-24 & 2024-25
(Figures in Rs. Crore)
# Particulars 2023-24 2024-25 (as of Nov 2024)
1 Collections (+) 10,22,280 7,48,490
2 Recovery from IGST Ad-hoc apportionment (+) - -
3 Refunds (-) 1,46,730 1,15,841
4 Settlement (-) 8,99,067 6,59,406
i. CGST 4,87,039 3,54,754
ii. SGST 4,12,028 3,04,652
5 Ad-hoc Settlement (-) -18,000 -
i. CGST ad hoc -9,000 -
ii. SGST ad hoc -9,000 -
6 Net (1+2-3-4-5) -5,516 -26,757
Total as of date -32,273
*Source: Pr. CCA, CBIC (updated on 02-12-2024)
States Revenue Comparison
3. The State-wise details of comparison of SGST revenue and the post settlement SGST revenue (including ad-hoc settlement) for FY 2024-25 (April-Nov) as compared to FY 2023-24 (April-Nov) may be seen in the Table 3.
Table 3: State-wise Revenue Comparison (Apr-Nov) (FY 2024-25) vs (Apr-Nov) (FY 2023-24)
(Amount Rs. in Crore)
State Code State/UT Pre-settlement (Apr'23-Nov'23) Pre-settlement (Apr'24-Nov'24) SGST Growth (%) Post-Settlement (Apr'23-Nov'23) Post-Settlement (Apr'24-Nov'24) SGST Growth Post settlement (%)
1 Jammu and Kashmir 1,960 2,013 3% 5,367 5,932 11%
2 Himachal Pradesh 1,731 1,841 6% 3,701 4,178 13%
3 Punjab 5,612 6,129 9% 14,734 16,102 9%
4 Chandigarh 439 502 14% 1,505 1,576 5%
5 Uttarakhand 3,625 3,915 8% 5,586 6,275 12%
6 Haryana 13,415 15,468 15% 23,134 26,246 13%
7 Delhi 10,340 11,847 15% 21,037 24,028 14%
8 Rajasthan 11,348 12,017 6% 25,699 28,658 12%
9 Uttar Pradesh 21,624 23,376 8% 49,282 56,687 15%
10 Bihar 5,377 5,913 10% 16,991 18,735 10%
11 Sikkim 321 264 -18% 677 646 -5%
12 Arunachal Pradesh 418 361 -14% 1,276 1,188 -7%
13 Nagaland 206 186 -10% 701 699 0%
14 Manipur 229 249 9% 730 783 7%
15 Mizoram 182 189 4% 634 633 0%
16 Tripura 335 352 5% 1,037 1,139 10%
17 Meghalaya 394 407 3% 1,103 1,187 8%
18 Assam 3,885 4,206 8% 9,553 10,352 8%
19 West Bengal 15,600 16,025 3% 28,042 30,737 10%
20 Jharkhand 5,866 5,776 -2% 8,116 9,327 15%
21 Odisha 10,626 11,723 10% 15,515 17,253 11%
22 Chhattisgarh 5,398 5,692 5% 8,831 10,143 15%
23 Madhya Pradesh 8,496 9,043 6% 20,673 23,674 15%
24 Gujarat 27,671 30,000 8% 41,545 48,096 16%
25&26 Dadra and Nagar Haveli & Daman and Diu 426 497 17% 699 845 21%
27 Maharashtra 65,983 73,941 12% 96,551 1,12,174 16%
29 Karnataka 26,713 29,514 10% 48,766 54,922 13%
30 Goa 1,487 1,659 12% 2,616 2,873 10%
31 Lakshadweep 16 6 -60% 69 70 2%
32 Kerala 9,171 9,743 6% 20,623 21,792 6%
33 Tamil Nadu 27,046 30,282 12% 42,472 51,430 21%
34 Puducherry 330 363 10% 933 1,042 12%
35 Andaman and Nicobar Islands 140 140 0% 347 378 9%
36 Telangana 12,994 13,859 7% 26,691 29,186 9%
37 Andhra Pradesh 9,291 9,613 3% 20,952 21,998 5%
38 Ladakh 155 176 14% 457 528 15%
97 Other Territory 156 125 -20% 822 554 -33%
Grand Total 3,09,003 3,37,412 9% 5,67,464 6,42,064 13%
Trends in Return filing
4. The tables 4A and 4B shows the trend in return filing in FORM GSTR-3B and GSTR-1 respectively as on 01.12.2024 for return period April to October of FY 2023-24 and FY 2024-25. Tables 5 and 6 show the State wise filing for April to October of FY 2024-25.
Table 4A: Return filing GSTR-3B (%) as on 01.12.2024
Return Period FY 2023-24 FY 2024-25
Apr 99.4% 98.4%
May 98.7% 97.6%
Jun 99.1% 98.0%
July 99.0% 97.7%
Aug 98.3% 95.5%
Sep 99.3% 95.2%
Oct 99.0% 90.4%
Figure 2A: GSTR-3B Filing as on 01.12.2024
Table 4B: Return filing GSTR-1(%) as on 01.12.2024
Return Period FY 2023-24 FY 2024-25
Apr 99.3% 98.4%
May 98.6% 97.7%
Jun 99.3% 98.3%
July 98.9% 97.8%
Aug 98.3% 95.8%
Sep 99.4% 95.9%
Oct 98.9% 92.9%
Figure 2B: GSTR-1 Filing as on 01.12.2024
Table 5: State-wise Return filing (GSTR-3B) till 01.12.2024 (Apr’24-Oct’24)
S. No. State/UT Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24
1 Jammu and Kashmir 99.4% 98.5% 99.0% 99.0% 96.5% 96.3% 91.6%
2 Himachal Pradesh 98.9% 97.8% 98.3% 97.8% 94.6% 95.5% 91.2%
3 Punjab 98.8% 97.7% 98.3% 98.6% 96.2% 96.4% 91.7%
4 Chandigarh 99.8% 98.7% 99.2% 98.8% 97.6% 97.1% 93.6%
5 Uttarakhand 98.5% 95.9% 97.8% 97.7% 94.3% 94.5% 89.9%
6 Haryana 98.7% 98.3% 98.5% 98.2% 96.1% 96.2% 90.8%
7 Delhi 98.1% 97.0% 97.5% 97.5% 95.2% 94.7% 90.2%
8 Rajasthan 99.1% 98.1% 98.2% 98.5% 95.4% 96.1% 91.7%
9 Uttar Pradesh 98.4% 97.5% 98.0% 97.7% 95.6% 95.3% 91.3%
10 Bihar 96.5% 94.5% 96.3% 95.2% 90.9% 90.9% 86.1%
11 Sikkim 96.8% 90.1% 94.7% 94.0% 91.2% 89.9% 82.3%
12 Arunachal Pradesh 94.6% 94.4% 95.3% 94.7% 90.6% 87.4% 78.5%
13 Nagaland 96.8% 97.1% 96.5% 96.0% 93.5% 91.5% 85.1%
14 Manipur 95.4% 95.5% 95.3% 93.5% 79.3% 86.5% 73.2%
15 Mizoram 97.1% 96.2% 95.4% 94.5% 92.9% 92.0% 86.9%
16 Tripura 95.0% 97.2% 97.9% 97.3% 94.8% 94.8% 89.7%
17 Meghalaya 98.2% 96.8% 97.9% 96.6% 93.9% 92.3% 87.4%
18 Assam 95.0% 95.1% 96.1% 94.9% 91.9% 90.9% 84.1%
19 West Bengal 98.4% 96.9% 97.8% 97.5% 95.1% 95.2% 90.9%
20 Jharkhand 98.1% 97.5% 97.5% 96.7% 94.9% 93.3% 89.0%
21 Odisha 97.8% 96.8% 97.2% 97.0% 93.9% 94.0% 88.7%
22 Chhattisgarh 99.5% 98.5% 99.3% 98.6% 95.8% 95.5% 88.2%
23 Madhya Pradesh 98.7% 97.6% 98.5% 98.0% 94.9% 95.4% 90.5%
24 Gujarat 100.0% 99.4% 99.7% 99.7% 98.9% 98.8% 95.5%
25 Dadra and Nagar Haveli & Daman and Diu 98.8% 98.7% 98.6% 97.8% 96.6% 95.5% 89.8%
27 Maharashtra 98.7% 97.9% 98.4% 98.0% 95.6% 95.4% 89.5%
29 Karnataka 98.1% 97.6% 97.9% 97.3% 95.4% 94.3% 89.6%
30 Goa 98.9% 97.8% 98.1% 97.1% 94.3% 93.5% 87.4%
31 Lakshadweep 97.1% 95.3% 97.6% 98.1% 92.6% 89.0% 84.9%
32 Kerala 98.2% 97.9% 97.7% 97.3% 95.5% 94.1% 87.9%
33 Tamil Nadu 98.8% 98.3% 98.3% 98.2% 97.1% 96.3% 92.3%
34 Puducherry 98.0% 98.1% 97.7% 97.1% 94.9% 93.2% 87.4%
35 Andaman and Nicobar Islands 98.6% 97.4% 96.7% 95.7% 92.9% 90.1% 82.2%
36 Telangana 98.1% 97.3% 97.2% 96.7% 93.8% 92.8% 87.5%
37 Andhra Pradesh 97.8% 97.0% 97.1% 96.9% 94.9% 94.0% 88.8%
38 Ladakh 99.6% 96.6% 98.9% 97.3% 91.0% 92.1% 83.2%
97 Other Territory 81.3% 81.3% 83.3% 107.7% 113.8% 112.3% 97.8%
Total 98.4% 97.6% 98.0% 97.7% 95.5% 95.2% 90.4%
Table 6: State-wise Return filing (GSTR-1) till 01.12.2024 (Apr’24-Oct’24)
S. No. State/UT Apr-24 May-24 Jun-24 Jul-24 Aug’24 Sep’24 Oct’24
1 Jammu and Kashmir 99.4% 98.4% 99.2% 98.9% 96.7% 96.9% 93.4%
2 Himachal Pradesh 98.3% 97.6% 98.6% 97.5% 94.7% 96.3% 93.4%
3 Punjab 98.5% 97.7% 98.5% 98.6% 96.4% 97.1% 93.5%
4 Chandigarh 99.6% 98.8% 99.4% 98.9% 97.8% 97.8% 95.8%
5 Uttarakhand 98.2% 95.8% 98.2% 97.6% 94.5% 95.3% 92.1%
6 Haryana 98.6% 98.3% 98.7% 98.2% 96.4% 97.0% 93.7%
7 Delhi 97.9% 97.1% 97.8% 97.5% 95.5% 95.6% 92.9%
8 Rajasthan 98.6% 97.9% 98.4% 98.2% 95.4% 96.7% 93.7%
9 Uttar Pradesh 98.4% 97.6% 98.3% 97.8% 95.8% 96.0% 93.3%
10 Bihar 96.6% 94.6% 96.7% 95.3% 91.2% 91.7% 88.0%
11 Sikkim 96.6% 90.0% 95.1% 94.1% 91.6% 90.5% 85.1%
12 Arunachal Pradesh 94.7% 94.6% 95.6% 94.9% 91.2% 88.1% 80.8%
13 Nagaland 97.0% 97.4% 96.7% 96.3% 93.7% 92.2% 87.3%
14 Manipur 95.8% 95.7% 95.6% 93.9% 79.7% 87.3% 76.1%
15 Mizoram 97.2% 96.5% 95.9% 94.9% 93.3% 92.5% 88.6%
16 Tripura 95.1% 97.4% 98.2% 97.4% 95.1% 95.4% 92.1%
17 Meghalaya 98.0% 96.9% 98.1% 96.3% 94.2% 92.9% 89.1%
18 Assam 95.0% 95.2% 96.5% 95.2% 92.4% 91.9% 86.8%
19 West Bengal 98.4% 97.0% 98.0% 97.6% 95.5% 95.9% 93.0%
20 Jharkhand 98.2% 97.6% 97.7% 96.9% 95.3% 94.0% 91.2%
21 Odisha 97.8% 96.8% 97.4% 97.1% 94.1% 94.7% 90.8%
22 Chhattisgarh 99.3% 98.4% 99.5% 98.3% 95.9% 96.4% 91.0%
23 Madhya Pradesh 98.4% 97.5% 98.7% 97.9% 95.0% 96.1% 92.4%
24 Gujarat 99.7% 99.1% 99.9% 99.6% 99.0% 99.3% 97.4%
25 Dadra and Nagar Haveli & Daman and Diu 98.9% 98.9% 98.9% 98.1% 97.2% 96.7% 94.5%
27 Maharashtra 98.7% 98.0% 98.7% 98.2% 95.9% 96.3% 92.8%
29 Karnataka 98.2% 97.7% 98.2% 97.5% 95.8% 95.1% 92.1%
30 Goa 98.8% 97.9% 98.4% 97.4% 94.8% 94.4% 90.4%
31 Lakshadweep 97.6% 95.7% 97.6% 100.0% 93.1% 89.9% 86.3%
32 Kerala 98.4% 98.1% 98.0% 97.7% 96.1% 95.1% 91.6%
33 Tamil Nadu 98.9% 98.5% 98.6% 98.4% 97.5% 97.0% 94.8%
34 Puducherry 98.2% 98.3% 98.0% 97.5% 95.4% 94.2% 90.7%
35 Andaman and Nicobar Islands 98.7% 97.7% 97.2% 96.3% 93.5% 91.2% 85.6%
36 Telangana 98.3% 97.5% 97.5% 97.1% 94.3% 93.7% 90.1%
37 Andhra Pradesh 97.9% 97.2% 97.4% 97.2% 95.2% 94.7% 91.3%
38 Ladakh 99.3% 96.2% 99.1% 97.3% 91.5% 93.7% 86.0%
97 Other Territory 81.3% 81.3% 83.3% 107.7% 113.8% 112.3% 102.2%
Total 98.4% 97.7% 98.3% 97.8% 95.8% 95.9% 92.9%
5. Sector wise Revenue:
Sector wise Y-o-Y growth in Cash collections for top 30 sectors is given in the charts below:
Figure 3: Sector wise cash collection and growth (Top 10)
Figure 4: Sector wise cash collection and growth (Top 11-20)
Figure 5: Sector wise cash collection and growth (Top 21-30)
Table 7: Relative contribution of Sectors
Sectors Relative Contribution in Cash Collection
FY 25 (upto Oct 24) FY 24
Financial Services 7.4% 6.9%
Support Services such as Cleaning/ Packaging/ Security/ etc 7.2% 6.9%
Iron and Steel - Primary forms 5.3% 5.8%
Mineral oils and Mineral Fuels 5.2% 5.6%
Tobacco products 4.9% 4.8%
Passenger Cars and Buses 4.8% 4.7%
Transport Services - Passgener and Goods; Postal and Courier Services 4.8% 4.4%
Commercial Buildings and Other Construction Services 4.6% 5.6%
Products of the Chemical or Allied Industries 4.2% 4.1%
Other Professional/ Technical and Business Services 4.2% 4.2%
Cement/ Glass/ Ceramic and Stone Products 4.1% 4.9%
Prepared Food stuff 4.1% 3.9%
Other Machinery and Appliances 3.5% 3.4%
Goods Carriers and other Vehicles/ Railways/ Aircarfts and Ships 3.2% 3.3%
Plastic and Rubber Articles/ Products 3.2% 3.3%
Electric machinery and Electronic appliances 2.7% 2.6%
Real Estate Services 2.6% 2.4%
Two-wheelers and Bicycles 1.6% 1.4%
Leather/ Paper/ Wood and and their articles 1.6% 1.8%
Leasing/ Rental or Licensing Services 1.6% 1.0%
Telecom/ Broadcasting and Information Supply Services 1.4% 1.1%
Residential buildings - Construction Services 1.4% 1.4%
Articles of Iron and Steel 1.4% 1.4%
Pharmaceuticals and Medical Devices 1.3% 1.2%
Gold and precious metals/ articles thereof 1.2% 1.0%
Accommodation/ Food and Beverages Services 1.1% 1.2%
Plants and Plant Products 1.1% 1.1%
Miscellaneous Manufactured Articles 1.1% 1.1%
Other metals/ articles thereof 1.1% 0.9%
Textiles and Textile Articles including Headgear and Footwear 1.1% 1.1%
Agenda Item 7(b): Status update on issues related to IGST Settlement to States.
1.Background and Terms of Reference
1.1Pursuant to the decision made in the 54th meeting of the GST Council held on 9th September 2024, a Committee of Officers (“the Committee” or “CoO”) under the Chairmanship of Additional Secretary (Revenue) was set up vide OM dated 17th September 2024. Members of the Committee are given in Annexure – 1.
1.2The Committee was tasked with the following mandate:
(a)To examine the legislative provisions and rules relating to process of IGST Settlement under GST.
(b)To examine the current process followed by GSTN in making the IGST settlement and analyse in detail any items of settlement not carried out and the reasons thereof.
(c)To analyse and apprise the GST Council regarding the following:
detailed understanding of the workings and the process followed in making the IGST settlement.
reasons and circumstances under which there can be a positive/negative balance in the IGST account.
manner in which settlement may be carried out of positive or negative balances going forward.
suggestions to improve the process of IGST so as to arrive at a more accurate settlement to States including any amendments desired in the relevant GST laws and the rules.
2.A brief of the deliberations of the CoO
2.2.1The members of the Committee highlighted various issues in respect of Settlement and the issues were deliberated over multiple meetings.
2.2Each of the settlement (STL) forms along with the source of data for these forms were discussed and examined at length. Sample data was called for from GSTN and the issues were analysed for possible solutions. While arriving at the possible solutions for the issues, it was ensured that:
(a)There is transparency in the settlement process.
(b)Demystification of the items included in the settlement forms with sufficiently detailed data.
(c)Resolve the anomalies in reporting and ensure accurate reporting.
(d)Align the current rules to the settlement process and bring clarity in the process of settlement.
(e)Ensure continuous reporting of data / MIS to the States.
2.3Based on the various deliberations and views of the Members, the Committee proposed certain amendments in Rules and certain methodologies to be followed for a smooth and transparent Settlement Process. finalized its report. Accordingly, the Committee also recommended various amendments to the Settlement Rules. The detailed report of the Committee and the proposed amendment in the Settlement Rules are placed as Annexure – 2 and Annexure – 3 to this Agenda Note.
2.4The details of the recommendations and the proposed amendments in the Rules are placed below in the succeeding paragraphs. The summary of the recommendations is placed below:
Issue Suggestion/Recommendation
Blank forms with no settlement pertaining to un-availed ITC on both domestic and imports and ineligible ITC on both domestic and imports.
Settlement based on individual line item-wise information is possible only after implementation of Invoice Management System (IMS).
Until IMS is implemented:
i.Settle un-availed ITC (on both imports and domestic) in summary form based on reporting in Table 4D in GSTR 3B on a monthly basis in STL Form 1.07.
ii.Settle ineligible ITC (on both imports and domestic) in summary form based on reporting in Table 4B in GSTR 3B on a monthly basis in STL Form 1.06.
Once the IMS is operational, settlement is to be done separately for domestic and imports with line-item wise information in the respective forms.
Requirement of legal framework for mandating the tax payer to report ineligible ITC and ITC reversals under IMS or otherwise. Circular no 170/02/2022-GST dated 6th July, 2022 should be included as a legal provision so that it brings a binding obligation on the taxpayers.
Law Committee to evaluate and suggest a legal provision which may be introduced for adjudication of taxpayers who have not availed/short availed IGST ITC.
Under IMS, rules should be framed to make it mandatory for the taxpayers to report un-availed ITC and ineligible ITC. In case of un-availed ITC based on limitation, automatic reversal may also be envisaged in IMS.
Over a period of time changes have been introduced in GSTR forms and rules which are not reflected in settlement rules and forms. Make consequential changes in the rules to align with the current business process.
Rules to be amended for certain issues like updating terms used such as Common Portal for GSTN, OIDAR being included in the settlement process, reference to UN refunds etc.
Settlement Forms are not aligned to the Rules and Source for capturing the data for each of the forms are not well delineated. Amend the relevant Rules and Forms to clearly delineate the various categories of settlement items contained in this form.
Sources for all the forms are to be specified in the headings of the forms.
In case of imports by unregistered persons, there were credits which were reversed without any explanation. GSTN to share sample data with States for Bills of Entry that were wrongly settled, including month, name, and reverse settlement details. If discrepancies are found, States can request complete data from GSTN, which will be provided as needed.
Going forward the States to be provided with the details of the bills of entry as received from ICEGATE.
Importer Exporter Code to be included in STL Form 1.08.
Information regarding place of supply in case of imports by unregistered persons is not available in the settlement forms. Importer Exporter Code to be included in STL Form 1.08.
Issues in settlement of accumulated ITC between centre and states upon cancellation of GST registration both voluntary and enforced. Many cancellations may involve fake or non-genuine taxpayers, making ITC settlement inappropriate.
Introducing a mechanism for the ‘Proper Officer’ to certify credits could also be counterproductive.
Committee felt that this requires further deliberation, and status quo can be maintained for now.
Reporting of revenue in ‘state code 97’ (Other Territory) is unclear indicating possibility of state revenue being allocated to centre. GSTN has provided sample data on entries appearing in “97. Other Territory”.
Based on analysis of the same, States to report back anomalies in reporting in the category “97. Other Territory”.
Upon review of the data, Committee to evaluate and recommend if instead of “97. Other Territory”, more specific classification can be considered. SRS to be amended appropriately.
Details pertaining to ‘online information data access retrieval services’ (OIDAR) regarding place of supply not available to states. GSTN to share data pertaining to OIDAR (TIN of supplier, Name, PoS, IGST collected etc) as it appears in the return filed in GSTR-5A as an MIS on a monthly basis.
States may seek further data from the jurisdictional officer for OIDAR (i.e) Bengaluru West Zone of CBIC.
Settlement for OIDAR would be reflected in STL Form 1.04 and the rules would be amended accordingly.
3.Deliberations on the manner of recovery
3.3.1The Committee also deliberated on the Method of apportionment / recovery of the balance (positive / negative) remaining in the IGST account. The issue was discussed in detail. It was felt that off late, the balance has been negative and if the trend of negative balance does not reverse, it will become imperative to recover the shortfall equally from the Centre and the States.The present status of the
3.2balance in the IGST Account is as follows:
Financial Year Balance in cr.
FY 2023-24 - 5,516
FY 2024-25 (till November) -26,757
Total -32,273
3.3The Committee observed that the ratio of apportionment between the Centre and the States (50:50) is specified in law, method of apportionment between the States is not specified. Although there is no clear specification in law, ad-hoc advance apportionment has been consistently distributed in a set ratio (base year revenue). Recovery adjustments from FY 2019-20 were also made consistently based on the actual settlement of the month since it reflects the actual utilization of the balance lying with the states.
3.4Various options for recovery, if needed, were discussed with the objective to decide on a method which is demonstrably simple, equitable, uniform, transparent, and which accurately reflects the current economic realities / actual pattern of the IGST utilization amongst States. IGST Settlement is done on a monthly basis based on actual final consumption (in terms of the returns and other similar statements furnished by taxpayers) under various heads as provided in the Settlement rules. In this regard, it was noted that the present ratio of revenues of the States has moved substantially from the base year revenues of the States. Advance apportionment in base year ratio and recovery based on IGST settlement ratio of the month may not reflect the actual pattern of IGST utilization over a period of time.
3.5Two major options were discussed, the first being to adopt the base year revenue ratio for both apportionment of positive balance and recovery of negative balance. The second option is to adopt the ratio of the cumulative IGST settlement ratio in the past 3 years for both apportionment of positive balance and recovery of negative balance. Based on the views of the States, the following was recommended by the Committee:
Recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
Although there was no consensus on the method for apportionment, in order for the ad-hoc advance apportionment to closely mimic the actual expected IGST settlement in future period, it is not appropriate to apportion the IGST balance (positive or negative) based on base year revenue or VAT revenue. In case if GST Council decides to apportion the IGST balance in the ratio of the cumulative IGST settlement ratio, then the consensus is to adopt the IGST settlement ratio of the immediate previous financial year and the same ratio is to be adopted for recovery of negative balance as well.
Further in line with the suggestion of some States, accumulated positive balance over Rs.10,000 crores may be distributed to the States as per the agreed method of apportionment. However, the negative balance shall be recovered within the same financial year by March 15th of every year and cannot be postponed to the subsequent financial year. Any balance for the last fifteen days can be settled when the figures are finalised by CCA.
4.Other items:
4.4.1It has been further recommended that System Requirement Specification (SRS) document for implementing the changes recommended by the Committee may be placed before the Committee and the approval of the Committee be taken before the same is implemented.
4.2Certain other issues were recommended for GSTN and the GST Council Secretariat. The gist of the same is as below:
i.Issues which may be considered by GSTN. GSTN to report status on these items to the Committee on an ongoing basis.
Centralised database of bill traders may be maintained.
Furnishing of settlement report to all States in the login of all CCTs.
Data on actual credit leger balance of IGST ITC, month-wise data for all IGST in-flow, month-wise data for all IGST outflow.
Validation mechanism for Table 4(D)(2) reversal similar to summary available for undue reversal in Table 4(8)(1).
Report of IGST ITC balance in ECL as of 25th of every month to be made available to States.
MIS report on GSTR-2B vs. GSTR-3B.
ii.GST Council Secretariat may be advised to issue an advisory to all States to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS.
4.3It was also recommended that the Committee may continue to review and examine various IT related issues faced by the States and Central formations and provide necessary directions and guidance to GSTN from time to time.
5.Approval required from the GST Council
5.5.1The recommendations of the Committee are placed before the GST Council for approval.
5.2The GST Council may approve that draft amendments to the Settlement rules be notified after being vetted by the Law Committee for consistency and approval of GIC.
5.3Approval of the GST Council is also sought for extending the term of the Committee as a Standing Committee so that IT related issues may be examined and resolved in a regular and comprehensive manner. Remaining issues regarding IGST Settlement may also be considered by the Committee for resolution.
*****
Annexure-1
6.
Annexure-2
Annexure-3
REPORT OF THE COMMITTEE SET UP TO EXAMINE ISSUES IN IGST SETTLEMENT
October 2024
Table of Contents
1. Background and Terms of Reference 3
2. Deliberations of the Committee 3
3. Current Legislative Framework and Rules: 3
4. Issues in brief raised by the Members for resolution: 4
6. Approach for discussion within the Committee: 5
7. Analysis of the Issues and Suggestions / Recommendations of the Committee: 6
7.1 Settlement of ITC lapsed due to not being availed within the limitation u/s 16(4) of the CGST Act 6
7.2 Issues in Settlement relating to imports by unregistered persons in STL 1.08 7
7.3 Settlement in STL 1.06 and 1.10 7
7.4 Settlement for pre-deposit and part recoveries 9
7.5 Settlement of collections made under “97. Other Jurisdictions” 9
7.6 Settlement of collections made under OIDAR 10
7.7 Other Changes required in the settlement rules 10
8. Methodology for apportionment of positive and negative balance in IGST Account: 11
8.1 IGST Balance: 11
8.2 Current method 11
8.3 Options 12
8.4 Views of the State 12
8.5 Recommendations: 13
9. Way forward and further work on other issues: 13
10. Summary of Recommendations: 15
1. Background and Terms of Reference
1.1 Pursuant to the decision made in the 54th meeting of the GST Council held on 9th September 2024, a Committee under the Chairmanship of Additional Secretary (Revenue) was set up vide OM dated 17th September 2024. Members of the Committee are given in Annexure 1.
1.2 The Committee was tasked with the following mandate:
(a) To examine the legislative provisions and rules relating to process of IGST Settlement under GST.
(b) To examine the current process followed by GSTN in making the IGST settlement and analyse in detail any items of settlement not carried out and the reasons thereof.
(c) To analyse and apprise the GST Council regarding the following:
• detailed understanding of the workings and the process followed in making the IGST settlement.
• reasons and circumstances under which there can be a positive/negative balance in the IGST account.
• manner in which settlement may be carried out of positive or negative balances going forward.
• suggestions to improve the process of IGST so as to arrive at a more accurate settlement to States including any amendments desired in the relevant GST laws and the rules.
2. Deliberations of the Committee
2.1 The Committee met on 20th September 2024, 10th October 2024, 17th October 2024 and 29th October 2024. Members participated in hybrid mode in all the meetings.
2.2 Based on the discussions, written comments were also received from the Member representing States of Karnataka, Kerala, Tamil Nadu, Maharashtra, Uttar Pradesh and Punjab.
2.3 Based on the various deliberations and views of all the Members, this report is being submitted.
3. Current Legislative Framework and Rules:
3.1 IGST settlement is carried out based on Section 17 & 18 of the Integrated Goods and Services Act, 2017 (IGST Act). The method and process of settlement is laid down in Goods and services Tax Settlement of funds Rules, 2017 (Settlement Rules).
3.2 Section 18 provides for the settlement based on cross utilisation of credit lying in CGST, SGST, UTGST and IGST account of each of the taxpayers. Relevant rules are contained in Rule 4(1)(b)(i), 4(1)(b)(ii) and 5(b).
3.3 Section 17 provides for the settlement for various items relating to final consumption of Input Tax Credit (ITC) in a particular state, like for example, B2C supplies, imports by unregistered tax persons, ineligible inputs/input services etc.
3.4 Tables showing the mapping of the current process with the relevant provisions of the Act and Rules and source of the data for each of the settlement (STL) reports are given in Annexure 2.
4. Issues in brief raised by the Members for resolution:
4.1 The Settlement Rules were drafted at the inception of the GST Regime. It was drafted with the original design of GST in mind in which the compliance was based on GSTR 1-2-3 architecture wherein all details of inputs and output supplies were to be auto drafted with little manual interventions. However, the returns were changed drastically to bring about ease of compliance. With GSTR-3B in place as summary return, many of the minute details which would have been captured in the GSTR 1-2-3 architecture are not available for making accurate settlement. Hence, there is no settlement being made in the Form 1.07, 1.11 and 1.10.
4.2 In July 2022, Circular no 170/02/2022-GST dated 6th July, 2022 was issued wherein the details required for settlement in Form 1.07, 1.11 and 1.10 were mandated to be captured in a summary form in GSTR 3B. This paved the way for making settlement for these items from August 2022. GSTN incorporated the items covered by these forms in another Form 1.06. These practices have to be recognised and provided for in the Rules so that the current settlement process is incorporated appropriately in the Rules and there is clarity in the process of settlement
4.3 It was highlighted that endeavour should be made to ensure that the settlement is done line item wise in Forms 1.07, 1.11 and 1.10 going forward so that there is transparency in settlement. It will also ensure that the capturing of data in these settlement forms are automatic and not solely based on reporting by the taxpayers. In this regard, the rules should be framed under the new invoice management system (IMS) so that there is obligation on part of the taxpayers to report correctly the items covered by these forms.
4.4 Many of the references in the Rules are outdated and requires to be updated. For instance, the date of annual return as per Settlement Rules is still September whereas in the parent GST Rules, date is now November. Many consequential amendments are required in the Settlement Rules.
4.5 The nomenclature on the Settlement Forms is not in sync with the rules and the source of the data are not explicitly mentioned on these forms. This also affects the way System Requirement Specification (SRS) document is drafted.
4.6 In the Settlement Form 1.08, it was noted that there have been negative settlements in the past few months. There is no clarity on what these negative settlements pertain to and whether these relate to settlements made earlier during the period in which compensation payments were due. Also, bill of entry wise data for the settlement in Form 1.08 is not available with the States.
4.7 While the collections from Online Information Database Access and Retrieval Services (OIDAR) Services are included in the settlement every month, taxpayer data regarding OIDAR services are not made available to the States. Similarly, there is a requirement to provided various MIS reports to the States in IGST settlement every month.
4.8 Further, issue of apportionment of IGST balance (positive or negative) was put forth by many Members and also by DoR. DoR pointed out that there is accumulation of negative balance in this year and hence it is important to resolve the issue of methodology of apportionment.
5. Approach for discussion within the Committee:
5.1 Each of the settlement (STL) forms along with the source of data for these forms were discussed and examined at length. Sample data was called for from GSTN and the issues were analysed for possible solution.
5.2 The following objectives were kept in mind in arriving at the possible solutions for each of the issues identified for resolution:
(a) There is transparency in the settlement process.
(b) Demystification of the items included in the settlement forms with sufficiently detailed data.
(c) Resolve the anomalies in reporting and ensure accurate reporting.
(d) Align the current rules to the settlement process and bring clarity in the process of settlement.
(e) Ensure continuous reporting of data / MIS to the States.
6.Analysis of the Issues and Suggestions / Recommendations of the Committee:
6.1Settlement of ITC lapsed due to not being availed within the limitation u/s 16(4) of the CGST Act
(a)As per the current Settlement Rules, ITC not availed till the lapse of limitation u/s 16(4) of the CGST Act is required to be settled on a yearly basis in STL 1.07 (for domestic purchases) and STL 1.11 (for imports).
(b)Data for these forms were required to be collated from the annual return in GSTR 9.
(c)However, since GSTR 9 is not mandatory for all taxpayers, data in these forms were not part of settlement.
(d)According to Circular no 170/02/2022-GST dated 6th July, 2022, amounts not availed are to be disclosed in GSTR-3B in Table 4D(2) for both domestic and imports. Hence from the month of August 2022, settlement for these items is being made in STL 1.06 instead of STL 1.07 and 1.11.
(e)Although, not provided in the current form in STL 1.06, settlement is being made in respect of such amounts.
(f)Committee noted that under the current scheme of filing of return, the best way to capture the un-availed ITC is based on the reporting in Table 4(D)(2) in Form GSTR-3B. However, there is a need to identify these lapsed credits based on data being populated in GSTR-2B. It may become possible to accurately determine such lapsed credits under the new Invoice Management System (IMS) which is being implemented.
(g)Recommendations:
i.Amend STL 1.07 to bring more clarity with respect to settlement done through reporting in Table 4D (2) of GSTR 3B. Reporting in STL 1.07 is to be made on an aggregate basis for both domestic and imports which, however, are to be reflected separately in the said Form.
ii.Law Committee to frame rules for IMS and the issue of capturing lapsed credit be addressed in the same.
iii.Once the IMS is operational, settlement in STL 1.07 is to be done separately for domestic and imports.
iv.Meanwhile, the current dispensation of settling such amounts may continue to be settled vide Table STL-1.06
6.2Issues in Settlement relating to imports by unregistered persons in STL 1.08
(a)As per the current settlement rules, IGST paid on imports by unregistered persons are reported in STL 1.08.
(b)It was observed that in STL 1.08, there have been negative settlement (or reverse settlement) in the last 2 years resulting in lesser IGST settlement to most states.
(c)The issue was analysed in detail, and it was noted that in respect of certain bills of entry in the earlier period (particularly 2021-22 and 2022-23), IGST was settled on the basis that the same pertains to unregistered persons, whereas it was found later that such bills of entry were indeed pertaining to registered persons, and they have claimed ITC in their GST returns.
(d)GSTN confirmed that the issue is completely resolved and all recoveries for the past period have been made. Going forward, process has been geared up to capture the GSTIN properly so that the issue is not repeated.
(e)It was also noted that in STL 1.08, there is no Importer Exporter Code (IEC) which would enable the States to verify the settlement.
(f)Recommendations:
i.GSTN to share sample data with States for the Bills of entries which were wrongly settled with details of month, name of person etc along with the details of the month in which the same was recovered as reverse settlement. In case of discrepancy noted, States may request for complete data from GSTN and the same shall be provided on need basis.
ii.Going forward the States to be provided with the details of the bills of entry as received from ICEGATE.
iii.Importer Exporter Code to be included in form STL 1.08.
6.3Settlement in STL 1.06 and 1.10
(a)Currently, form STL 1.06 is being used to settle the following:
ineligible credits (ineligible credit on imports was to be covered by STL 1.10; however, the same is being settled vide STL-1.06)
lapsed credits due to time limitation envisaged u/s 16(4) of the CGST/SGST Act (supposed to be covered by STL 1.07 and 1.11)
lapsed credits due to composition scheme and
cancellation of registration.
(b)Rules are not elaborate enough to cover all the scenarios which are currently being considered and settled vide STL 1.06.
(c)Sources for each of the form are not clearly delineated.
(d)Ineligible ITC on Imports are also settled in STL 1.06 instead of STL 1.10 since the source of this settlement is from Table 4B(1) of GSTR 3B and currently there is no split of domestic and imports in the same.
(e)However, there is a need to identify these ineligible credits separately for imports and domestic based on a separate provision made in GSTR-3B to capture data relating to ineligible ITC separately for domestic and imports. It may become possible to accurately determine such lapsed credits under the new Invoice Management System (IMS) which is being implemented.
(f)As regards cancellation of registration it was observed that there should be an automatic mechanism to settle the ITC upon cancellation of registration. It was noted that the current settlement based on return to be filed by the taxpayer does not fully capture the ITC that would accrue to the States. It was also pointed out that many of the cancellations may be involuntary where the taxpayers were found to be fake or non-genuine, in which case settlement of ITC is not appropriate. Furthermore, introducing a mechanism to allow the ‘Proper Officer’ to certify that the credits are correct and not fake may also be counterproductive.
(g)It was also pointed out especially by the State of Karnataka that the reverse settlement of IGST upon identification of fake credits is also an important aspect.
(h)Recommendations:
i.Amend the relevant Rule and Form STL 1.06 to provide for clarity on various categories of settlement contained in the form.
ii.Sources for all the forms (including STL 1.06) to be specified in the headings of the form.
iii.Law Committee to frame rules for IMS and the issue of capturing ineligible credit separately for domestic and imports be addressed in the same.
iv.Settle ineligible credits related to imports in STL 1.06 till the time the data is captured through IMS or GSTR-3B in which case the settlement will be made through STL 1.10.
v.Regarding settlement of ITC upon cancellation of registration, the current method may be followed. Committee may further deliberate on the right mechanism to have an automatic settlement of ITC which would balance the requirements of IGST settlement and the objectives of identifying fake/non-genuine taxpayers. This would also include the issue of reverse settlement of IGST upon identification of fake credits
6.4Settlement for pre-deposit and part recoveries
(a)Issue of settlement of amount pre-deposited before filing an appeal represent part payment or recovery is covered by Rule 6 and Forms STL 3.01, 3.02 and 5.05. Other part payment/recoveries also may exist.
(b)Place of supply is not readily available. It can’t be settled to the State in which taxpayer is located as place of supply (PoS) will be another State in IGST.
(c)Pre-deposit may also get refunded in future depending on the outcome of the appeal.
(d)Hence it is necessary to have a formulation to settle pre-deposit at the time of deposit.
(e)Recommendations:
i.PoS to be indicated as a mandatory field in payment challan including for part payment and pre-deposits and the same is captured in the system.
ii.If subsequently refunded, same PoS be used so that there can be reverse settlement.
6.5Settlement of collections made under “97. Other Jurisdictions”
(a)It was noted that there are collections made and settled under “97 Other Jurisdictions”. ‘Other territory’ as per clause (81) of section 81 of the CGST/SGST Act is a territory which is neither a part of any State or that of any Union Territory. Strictly speaking the units falling in the territorial waters (including sea-bed or subsoil underlying the same), continental shelf, EEZ or any other maritime zone of India would be covered by this and, as such, such territory of India is outside the state’s jurisdiction. A minor exception as regards territorial waters immediately adjoining a State has been provided in Section 9 of the IGST Act. Thus, it would be seen that ‘other territory’ is essentially that part of India which is neither in a State nor in any Union Territory.
(b)Data is required to be analysed to understand the various scenarios in which revenue is accounted under “97-Other Territory”.
(c)States has requested that there must be transparency in the amounts appearing under this code as well as the mode of settlement. Maharashtra pointed out that in the SRS, settlement of this jurisdiction is entirely taken to centre’s kitty.
(d)Recommendation:
i.GSTN to provide sample data on entries appearing in “97. Other Territory”.
ii.GSTN to come out with clear guidance on what scenarios are covered by “97. Other territory”.
iii.Upon review of the data, Committee may evaluate and recommend if instead of “97. Other territory”, more specific classification like EEZ may be included to avoid confusion. This may be reviewed by the Committee.
6.6Settlement of collections made under OIDAR
(a)It was noted that there needs to be more transparency in sharing of data pertaining to OIDAR tax collections.
(b)It was noted that settlement is currently been done for OIDAR services in table STL 1.04 based on PoS reported by taxpayers in GSTR 5A.
(c)Recommendation:
i.GSTN to share data pertaining to OIDAR (TIN of supplier, Name, PoS, IGST collected etc) as it appears in the return filed in GSTR-5A as an MIS on a monthly basis.
ii.States may seek further data from the jurisdictional officer for OIDAR (i.e) Bengaluru West Zone of CBIC.
iii.Settlement for OIDAR would be reflected in STL Form 1.04 and the rules would be amended accordingly.
6.7Other Changes required in the settlement rules
Certain other changes were identified in the Settlement Rules which requires an amendment. These are as follows:
ii.Reference to “Goods and Services Tax Network” to be changed to “common portal” as in the parent GST Acts. Similarly reference to CBEC changed to CBIC.
iii.R.3(2)(b) is to be deleted as the annual reports have no significance in settlement. All settlements are based on monthly returns only.
iv.Minor changes in language – words “adjusted liability of tax from”, replaced with “discharged liability of tax by utilizing”.
v.In R.4(b)(iii) –references to exports, supplies to SEZ, UINs have to be reworded as these supplies are entitled to refunds. Objective is to restrict it to the extent of refunds not claimed beyond the due date specified.
vi.Settlement for IGST collected from Online Information Database Access and Retrieval Services (OIDAR) to be added in the relevant rule and in Form 1.04.
vii.R.8(b)(v) refers to S.42 & 43 of CGST Act which stand omitted. Hence this sub-rule and Form 5.06 are required to be deleted.
Draft changes to the Settlement Rules are attached as Annexure 3 to this report.
7.Methodology for apportionment of positive and negative balance in IGST Account:
7.1IGST Balance:
(a)It is noted that in the current year, IGST account started with a negative balance of Rs.5,500 crore. Upto Aug 2024, cumulative negative balance swelled to Rs.14,218 crore. In Sep 2024, the trend reversed and was at Rs.8,000 crore.
(b)If the negative balance does not reverse before Nov 2024, there will be a necessity to recover the negative balance from the States.
(c)Issue of the method to be adopted for apportionment of positive balance and recovery of negative balance was deliberated in the Committee.
7.2Current method
(a)As discussed earlier, IGST Settlement is done on a monthly basis based on actual final consumption (in terms of the returns and other similar statements furnished by taxpayers) under various heads as provided in the Settlement rules.
(b)Due to various timing issues in the collection of IGST and actual consumption-based apportionment, there is generally balance lying in the IGST account. It may be noted that from Feb 2018 onwards, surplus in IGST amounting to ₹ 402,000 Crores was apportioned in advance in the ratio of 50:50 to the Centre (₹ 201,000) and the States (₹ 201,000). Thereafter, as and when there were negative balance, the said negative balance was also adjusted/recovered from Centre and State in the same 50:50 ratio. Including the above adjustment of ₹ 18,000 Crores made in November 2023, an amount of ₹ 68,000 Crores has been recovered due to negative balance from time to time, out of this ₹34,000 pertain to the shares of the States. Accordingly, balance of ad-hoc advance apportionment lying with the states is ₹ 1,67,000 Crores (₹ 2,01,000 minus ₹ 34,000) as of December 2023.
(c)While the ratio of apportionment between the Centre and the States (50:50) is specified in law, method of apportionment between the States is not specified. Although there is no clear specification in law, ad-hoc advance apportionment has been consistently distributed in a set ratio (base year revenue). Recovery adjustments from FY 2019-20 were also made consistently based on the actual settlement of the month since it reflects the actual utilization of the balance lying with the states. Recoveries made in FY 2018-19 alone were based on the base-year revenue ratio.
7.3Options
(a)Various options were discussed on the method for apportionment and of positive balance and recovery of negative balance.
(b)The first option is to adopt the base year revenue ratio for both apportionment of positive balance and recovery of negative balance.
(c)The second option is to adopt the ratio of the cumulative IGST settlement ratio in the past 3 years for both apportionment of positive balance and recovery of negative balance.
(d)The objective is to decide on a method which is demonstrably simple, equitable, uniform, transparent, and which accurately reflects the current economic realities / actual pattern of the IGST utilization amongst States. It may be noted that the base year revenue ratio has moved substantially. Advance apportionment in base year ratio and recovery based on IGST settlement ratio of the month may not reflect the actual pattern of IGST utilization over a period of time.
7.4Views of the State
(a)Kerala, UP and Punjab supported Option 1.
(b)Kerala also stated that recovery should be made only after the positive balance lying with the States as of the end of the compensation period is exhausted.
(c)Karnataka stated that the positive balance in IGST account shall be apportioned to the states whenever the positive balance is over a threshold amount. Threshold can be recommended by the committee. Further, in a financial year if there is negative balance at the end of the year, it can be recovered in the first quarter of the next financial year.
(d)Tamil Nadu stated that there should be no requirement to recover any negative balance as IGST account would even out over a period of time.
(e)Maharashtra and Tamil Nadu pointed that recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
(f)Tamil Nadu has further pointed out that VAT revenue be used as the basis for apportionment of positive and negative balance. In the alternative, TN has supported that the ratio should be IGST settlement of the immediate previous financial year and not 3 years. This has been supported by Karnataka, Maharashtra and Gujarat.
7.5Recommendations:
i.Recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
ii.Although there is no consensus on the method for apportionment, in order for the ad-hoc advance apportionment to closely mimic the actual expected IGST settlement in future period, it is not appropriate to apportion the IGST balance (positive or negative) based on base year revenue or VAT revenue. In case if GST Council decides to apportion the IGST balance in the ratio of the cumulative IGST settlement ratio, then the consensus is to adopt the IGST settlement ratio of the immediate previous financial year and the same ratio is to be adopted for recovery of negative balance as well.
iii.Further in line with the suggestion of Karnataka, accumulated positive balance over Rs.10,000 crores may be distributed to the States as per the agreed method of apportionment. However, the negative balance shall be recovered within the same financial year by March 15th of every year and cannot be postponed to the subsequent financial year. Any balance for the last fifteen days can be settled when the figures are finalised by CCA.
8.Way forward and further work on other issues:
8.1It was also further discussed that the Committee should continue to work on certain issues and the approval of the GST Council may be sought for the same.
8.2There were other issues raised by the Member States on various issues which were outside the mandate of the terms of reference of the Committee. However, since these issues may have a bearing on the IGST settlement, the issues were deliberated, and it was decided to refer certain issued to Law Committee.
8.3States sought certain MIS reports and data on an ongoing basis, and these were found to be relevant to have a transparent system of settlement. GSTN may provide these reports on an ongoing basis. It was also requested that States may be advised to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS.
8.4Recommendations:
i.System Requirement Specification (SRS) document for implementing the changes recommended by the Committee may be placed before the Committee and the approval of the Committee be taken before the same is implemented.
ii.The Committee may continue to review and examine various IT related issues faced by the States and Central formations and provide necessary directions and guidance to GSTN from time to time.
iii.Issues which may be considered by Law Committee in a time bound manner:
a)Legal provision needs to be introduced for adjudication of taxpayers who have not availed/short availed IGST ITC.
b)Circular no 170/02/2022-GST dated 6th July, 2022 should be included as a legal provision so that it brings a binding obligation on the taxpayers.
iv.Issues which may be considered by GSTN. GSTN to report status on these items to the Committee on an ongoing basis.
a)Centralised database of bill traders may be maintained.
b)Furnishing of settlement report to all States in the login of all CCTs.
c)Data on actual credit leger balance of IGST ITC, month-wise data for all IGST in-flow, month-wise data for all IGST outflow.
d)Validation mechanism for Table 4(D)(2) reversal similar to summary available for undue reversal in Table 4(8)(1).
e)Report of IGST ITC balance in ECL as of 25th of every month to be made available to States.
f)MIS report on GSTR-2B vs. GSTR-3B.
v.GST Council Secretariat may be advised to issue an advisory to all States to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS.
9.Summary of Recommendations:
Issue Suggestion/Recommendation Action owner
Settlement of ITC not availed due to lapse of limitation u/s 16(4) of the CGST Act
Amend STL 1.07 to bring more clarity with respect to settlement done through reporting in Table 4D (2) of GSTR 3B. Reporting in STL 1.07 is to be made on an aggregate basis for both domestic and imports.
Law Committee to frame rules for IMS and the issue of capturing lapsed credit be addressed in the same.
Once the IMS is operational, settlement in STL 1.07 is to be done separately for domestic and imports. DOR
LC
LC/ DoR
Issues in Settlement relating to imports by unregistered persons in STL 1.08 i.GSTN to share sample data with States for the Bills of entries which were wrongly settled with details of month, name of person etc alongwith the details of the month in which the same was recovered as reverse settlement. In case of discrepancy noted, States may request for complete data from GSTN and the same shall be provided on need basis.
ii.Going forward the States to be provided with the details of the bills of entry as received from ICEGATE.
iii.Importer Exporter Code to be included in form STL 1.08. GSTN
GSTN
DoR
Settlement in STL 1.06 and 1.10 i.Amend the relevant Rule and Form STL 1.06 to provide for clarity on various categories of settlement contained in the form.
ii.Sources for all the forms (including STL 1.06) to be specified in the headings of the form.
iii.Law Committee to frame rules for IMS and the issue of capturing eligible credit separately for domestic and imports be addressed in the same.
iv.Settle ineligible credits related to imports in STL 1.06 till the time the data is captured through IMS or GSTR-3B.
v.Regarding settlement of ITC upon cancellation of registration, the current method may be followed. Committee may further deliberate on the right mechanism to have an automatic settlement of ITC which would balance the requirements of IGST settlement and the objectives of identifying fake/non-genuine taxpayers. This would also include the issue of reverse settlement of IGST upon identification of fake credits DoR
DoR
LC
GSTN-DoR
DoR
Settlement for pre-deposit and part recoveries i.PoS to be indicated as a mandatory field in demand/SCN/payment challan and the same is captured in the system.
ii.If subsequently refunded, same PoS be used so that there can be reverse settlement. LC
LC
Settlement of collections made under “97. Other Jurisdictions” i.GSTN to provide sample data on entries appearing in “97. Other territory”.
ii.GSTN to come out with clear guidance on what scenarios are covered by “97. Other territory”.
iii.Upon review of the data, Committee may evaluate and recommend if instead of “97. Other territory”, more specific classification like EEZ may be included to avoid confusion. This may be reviewed by the Committee. GSTN
GSTN
DoR
Settlement of collections made under OIDAR i.GSTN to share data pertaining to OIDAR (TIN of supplier, Name, PoS, IGST collected etc) as it appears in the return filed in GSTR-5A as an MIS on a monthly basis.
ii.States may seek further data from the jurisdictional officer for OIDAR (i.e) Bengaluru West Zone of CBIC. GSTN
Method of apportionment of IGST balance (positive or negative i.Recovery of negative balance should be the last resort and should be undertaken only when it is absolutely clear that the negative balance would not reverse within the financial year.
ii.Although there is no consensus on the method for apportionment, in order for the ad-hoc advance apportionment to closely mimic the actual expected IGST settlement in future period, it is not appropriate to apportion the IGST balance (positive or negative) based on base year revenue or VAT revenue. In case if GST Council decides to apportion the IGST balance in the ratio of the cumulative IGST settlement ratio, then the consensus is to adopt the IGST settlement ratio of the immediate previous financial year and the same ratio is to be adopted for recovery of negative balance as well.
iii.Further in line with the suggestion of Karnataka, accumulated positive balance over Rs.10,000 crores may be distributed to the States as per the agreed method of apportionment. However, the negative balance shall be recovered within the same financial year by March 15th of every year and cannot be postponed to the subsequent financial year. Any balance for the last fifteen days can be settled when the figures are finalised by CCA. DoR
DoR
Way Forward and iii.System Requirement Specification (SRS) document for implementing the changes recommended by the Committee may be placed before the Committee and the approval of the Committee be taken before the same is implemented.
iv.The Committee may continue to review and examine various IT related issues faced by the States and Central formations and provide necessary directions and guidance to GSTN from time to time.
v.Issues which may be considered by Law Committee in a time bound manner:
Legal provision needs to be introduced for adjudication of taxpayers who have not availed/short availed IGST ITC.
Circular no 170/02/2022-GST dated 6th July, 2022 should be included as a legal provision so that it brings a binding obligation on the taxpayers.
vi.Issues which may be considered by GSTN. GSTN to report status on these items to the Committee on an ongoing basis.
Centralised database of bill traders may be maintained.
Furnishing of settlement report to all States in the login of all CCTs.
Data on actual credit leger balance of IGST ITC, month-wise data for all IGST in-flow, month-wise data for all IGST outflow.
Validation mechanism for Table 4(D)(2) reversal similar to summary available for undue reversal in Table 4(8)(1).
Report of IGST ITC balance in ECL as of 25th of every month to be made available to States.
MIS report on GSTR-2B vs. GSTR-3B.
vii.GST Council Secretariat may be advised to issue an advisory to all States to ensure that States automatically notify details of any adjudication orders of other State taxpayer with PoS. DoR
DoR
LC
GSTN
GSTCS
Other changes in the rules i.Reference to “Goods and Services Tax Network” to be changed to “common portal” as in the parent GST Acts. Similarly reference to CBEC changed to CBIC.
ii.R.3(2)(b) is to be deleted as the annual reports have no significance in settlement. All settlements are based on monthly returns only.
iii.Minor changes in language – words “adjusted liability of tax from”, replaced with “discharged liability of tax by utilizing”.
iv.In R.4(b)(iii) –references to exports, supplies to SEZ, UINs have to be reworded as these supplies are entitled to refunds. Objective is to restrict it to the extent of refunds not claimed beyond the due date specified.
v.Settlement for IGST collected from Online Information Database Access and Retrieval Services (OIDAR) to be added in the relevant rule.
vi.R.8(b)(v) refers to S.42 & 43 of CGST Act which stand omitted. Hence this sub-rule and Form 5.06 are required to be deleted. DOR
Annexure 2:
(a)STL reports related to Cross-utilisation:
(b)STL Reports related to Apportionment
(c)Source of STL Reports
Agenda Item 7(c): GSTAT Procedure Rules to regulate the procedure for functioning of the GSTAT.
GST Appellate Tribunal (GSTAT) is a new attached office under the Department of Revenue which was established on 1st September, 2024 with Principal Bench at New Delhi and 31 state benches at 45 locations across the country.
2. The following developments have taken place till date for making the GSTAT operational:
i.The President of GSTAT has been appointed and he joined the post on 6th May, 2024.
ii.The process of appointment of the Members of the Tribunal is underway.
iii.953 posts of supporting staff have been created and the process of filling up the positions is underway.
3. However, to fully operationalize the benches, certain procedures and methodologies are required to be laid out. In this regard, section 106 of the CGST Act, 2017 states that:
106. Procedure of Authority, Appellate Authority and National Appellate Authority
The Authority or the Appellate Authority 2[or the National Appellate Authority] shall, subject to the provisions of this Chapter, have power to regulate its own procedure.
Further, as per sub-section (1) of section 111 of the CGST Act, 2017 mentions that:
Section 111. Procedure before Appellate Tribunal
(1) The Appellate Tribunal shall not, while disposing of any proceedings before it or an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and subject to the other provisions of this Act and the rules made thereunder, the Appellate Tribunal shall have power to regulate its own procedure.
4. Accordingly, GSTAT Procedure Rules, 2024 has been drafted by Principal Bench, GSTAT for functioning of the GSTAT. The rules include important instructions/information related to filing of appeal, documents required, hearing of appeal, records to be maintained and pronouncement of order, etc.
5. Accordingly, the Draft rules have been prepared and are placed in Annexure-1. If approved, the same may be placed before the GST Council for consideration and approval. Once approved, the same may be vetted by Law Committee and notified with the approval of GIC.
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Annexure - 1
INDEX
Preamble
Chapter I: Preliminary
1.Short title and commencement
2.Definitions
Chapter II: Powers and Functions
3.Computation of time period
4.Format of order or direction or rule
5.Official seal of the Appellate Tribunal
6.Custody of the records
7.Sittings of Bench
8.Sitting hours of the Appellate Tribunal
9.Working hours of office
10.Inherent powers
11.Calendar
12.Listing of cases
13.Power to exempt
14.Power to extend time
15.Powers and functions of the Registrar
16.Power of adjournment
17.Delegation powers of the President
Chapter III: Institution of appeals - Procedure.
18.Filing of Appeals
19.Grounds which may be taken in appeal
20.Rejection or amendment of Form of Appeal
21.Who may be joined as respondents
22.Endorsing copies to the party.
23.Filing of Form of cross-objections, applications or replies to appeals/applications.
24.Filing of Reply and other Documents by the Respondents.
25. Filing of Rejoinder
Chapter IV: Cause list
26.Preparation and publication of daily cause list.
27.New cause list and adjournment of cases on account of non-sitting of an Appellate Tribunal
28.Service of Notices and processes.
Chapter V: Hearing of Appeal
29.Hearing of appeal
30.Action on appeal for appellant’s default
31.Hearing of appeals ex parte
32.Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application
33.Production of additional evidence
34.Production of Evidence by Affidavit
35.Adjournment of appeal
36.Proceedings to be open to public
37.Procedure for filing of and disposal of interlocutory Application
38.Appeal referred to larger Bench
39.Order to be signed and dated
40.Publication of orders
Chapter VI: Record of Proceedings
41.Court Diary
42.Order sheet
43.Maintenance of court diary
44.Statutes or citations for reference
45.Calling of cases in court
46.Regulation of court work
Chapter VII: Maintenance of Registers
47.Registers to be maintained.
48.Arrangement of records in pending matters.
49.Contents of main file.
50.Contents of process file.
51.Contents of Execution file.
52.File for miscellaneous applications
53.Preservation of Record
54.Retention, Preservation and Destruction of Records.
Chapter VIII: Inspection of Record
55.Inspection of the records.
56.Grant of inspection.
57.Application for grant of inspection.
58.Mode of inspection.
59.Maintenance of register of inspection.
Chapter IX: Appearance of authorised representative
60.Appearance of authorised representative
61.Consent for engaging or change of authorised representative (Duly stamped as per the respective High Court Rules)
62.Restrictions on appearance
63.Restriction on party’s right to be heard
64.Empanelment of special authorised representatives by the Appellate Tribunal
65.Professional dress for the authorised representatives.
Chapter X: Affidavits
66.Title of affidavits.
67.Form and contents of the affidavit.
68.Persons authorised to attest.
69.Affidavits of illiterate, visually challenged persons.
70.Identification of deponent.
71.Annexures to the affidavit.
Chapter XI: Discovery, Production and Return of Documents
72.Application for production of documents, form of summons.
73.Suo motu summoning of documents.
74.Marking of documents.
75.Return and transmission of documents.
Chapter XII: Examination of Witnesses and Issue of Commissions
76.Procedure for examination of witnesses, issue of Commissions
77.Examination in camera.
78.Form of oath or affirmation to witness.
79.Form of oath or affirmation to interpreter.
80.Officer to administer oath.
81.Form recording of deposition.
82.Numbering of witnesses
83.Grant of discharge certificate
84.Witness allowance payable
85.Records to be furnished to the Principal Commissioner or Commissioner
86.Taking of specimen handwriting, signature etc.
Chapter XIII: Disposal of Cases and Pronouncement of Orders
87.Disposal of Cases.
88.Operative portion of the order.
89.Corrections.
90.Power to impose Costs.
91.Pronouncement of Order.
92.Pronouncement of order by any one member of the Bench
93.Authorising any member to pronounce order
94.Recusal
95.Enlargement of time.
96.Rectification of Order.
97.General power to amend.
98.Making of entries by Court officer.
99.Transmission of order by the Court officer.
100.Format of order.
101.Indexing of case files after disposal.
102.Copies of orders in library.
Chapter XIV: Goods and Services Tax Appellate Tribunal Orders
103.Register of Appeals, Petitions, etc
104.Placing of order of Hon’ble Supreme Court and Hon’ble High Courts before the Appellate Tribunal
105.Registrar to ensure compliance of Hon’ble Supreme Court or Hon’ble High Courts orders
106.Fees
107.Award of costs in the proceedings
108.Dress for the Members
109.Dress for the parties
110.Removal of difficulties and issue of directions
111.Inspection by the President
GSTAT Procedural Rules 2024
Preamble
In exercise of the powers conferred by Section 106 and 111 of the Central Goods and Services Tax Act, 2017 (CGST Act 2017), the Goods and Services Appellate Tribunal, hereinafter referred to as the GSTAT, hereby makes the following rules for regulating the procedure and functioning of the Goods and Services Tax Appellate Tribunal (GSTAT).
Chapter I: Preliminary
1.Short title and commencement
(i)These rules may be called the Goods and Services Tax Appellate Tribunal (GSTAT) Procedural Rules, 2024. They shall come into force on the date of their publication in the official Gazette.
2.Definitions
(i)In these rules, unless the context otherwise requires:
(a)"Act" means the Central Goods and Services Tax Act, 2017 (CGST Act 2017) or State/Union Territory Goods and Services Tax Act 2017 (SGST/UTGST Act 2017);
(b)“adjudicating authority” means the adjudicating authority as defined under Section 2(4) of the CGST/SGST/UTGST Act 2017;
(c)"Appellate Tribunal" means the Goods and Services Tax Appellate Tribunal (GSTAT) established under Section 109 of the CGST Act 2017;
(d)“authorised representative” in relation to any proceedings before the Appellate Tribunal means, —
(i)“authorised representative” means a person authorised in writing/vakalatnama (duly stamped) by a party to present his case before the Appellate Tribunal as provided under Section 116 of the Act, to appear, plead or act on his behalf in such proceedings;
Provided that a vakalatnama can be filed by an advocate within the meaning of the professional defined under the Advocates Act 1961.
or
(ii)a person duly appointed [by the Central Government or State Government or by an officer duly authorised in this behalf] as authorised representative to appear, plead and act for the [Principal Commissioner or Commissioner] in such proceedings;
(e)“Bench” means the Bench of the Appellate Tribunal and includes a Principal Bench –
(i)and a Member sitting singly;
(ii)Principal Bench means a Bench constituted at the principal seat of the Appellate Tribunal (at New Delhi) to which the cases arising anywhere in India may (also) be assigned;
(iii)State Bench means a Bench notified by the Central Government and having jurisdiction over a specified area;
(f)“Certified copy” means the original copy of the order/documents received by the party, or a copy (including a Photostat copy) thereof duly authenticated by the concerned department, or a copy (including a Photostat copy) duly authenticated by the ‘Authorized Representative’ of the appellant/respondent;
(g)“CGST” means Central Goods and Services Tax;
(h)“form” means a form prescribed under Central Goods and Services Tax, State Goods and Services Tax /Union Territory Goods and Services Tax Rules 2017;
(i)“Interlocutory application” means an application to the Appellate Tribunal in any appeal or proceeding already instituted in such Appellate Tribunal, other than a proceeding for execution of an order;
(j)“member” means a member of the Appellate Tribunal and includes the President and a Vice-President;
(k)“party” means a person who prefers an appeal before the Appellate Tribunal and includes respondent of any person interested in the appeal;
(l)“prescribed” means prescribed by or under these rules;
(m)"President" means the President of the Appellate Tribunal as per Section 109 of the Act;
(n)“[Principal Commissioner or Commissioner]” means the [Principal Commissioner or Commissioner of CGST & Customs/SGST/UTGST] as the case may be;
(o)"Registrar" means the Registrar of the Appellate Tribunal as per CGST, SGST /UTGST Rules 2017;
(p)"Rules" means the Goods and Services Tax Appellate Tribunal Procedural Rules, 2024;
(q)"Section" means a section of the Act;
(r)“SGST” means State Goods and Services Tax;
(s)“UTGST” means Union Territory Goods and Services Tax;
(t)“Vice-President” means a Vice-President of the State Benches as per Section 109(7) of the Act;
(u)All other words and expressions used in these rules but not defined herein and defined in the Act and CGST, SGST/UTGST Rules 2017 shall have the meanings respectively assigned to them in the Act and in the above-mentioned rules.
Chapter II: Powers and Functions
3.Computation of time period- Where a period is prescribed by the Act and these rules or under any other law or is fixed by the Appellate Tribunal for doing any act, in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded.
4.Format of order or direction or rule- every rule, direction, order, summons, warrant or other mandatory process shall be issued in the name of the President/Member and shall be signed by the Registrar or any other officer specifically authorised in that behalf by the President, with the day, month and year of signing and shall be sealed with the official seal of the Appellate Tribunal.
5.Official seal of the Appellate Tribunal- The official seal and emblem of the Appellate Tribunal shall be such, as the President may from time to time specify and shall be in the custody of the Registrar.
6.Custody of the records- The Registrar shall have the custody of the records of the Appellate Tribunal and no record or document filed in any case or matter shall be allowed to be taken out of the custody of the Appellate Tribunal without the leave of the Appellate Tribunal.
Provided that the Registrar may allow any other officer of the Appellate Tribunal to remove any official paper or record for administrative purposes from the Appellate Tribunal.
7.Sittings of Bench — Subject to such general or special orders as may be made by the President, a Bench shall hold its sittings either at Headquarters or at such other place falling within its jurisdiction as may be notified by the Central Government.
8.Sitting hours of the Appellate Tribunal- The sitting hours of the Appellate Tribunal shall ordinarily be from 10.30 AM. to 01.30 P.M. and from 2.30 P.M. to 4.30 P.M. subject to any order made by the President and this shall not prevent the Appellate Tribunal to extend its sitting as it deems fit.
9.Working hours of office - (i) The office of the Appellate Tribunal shall remain open on all working days from 10:00 A.M. to 5 P.M.
(ii) The filing counter of the Registry shall be open on all working days from 10.30 AM to 5.00 P.M.
10.Inherent powers - Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal.
11.Calendar - The Calendar of days of working of Appellate Tribunal in a year shall be as decided by the President and Members of the Appellate Tribunal.
12.Listing of cases - All urgent matters filed before 12 noon shall be listed before the Appellate Tribunal on the following working day, if it is complete in all respects as provided in these rules and in exceptional cases, it may be received after 12 noon but before 3.00 P.M. for listing on the following day, with the specific permission of the Appellate Tribunal or President.
13.Power to exempt - The Appellate Tribunal may on sufficient cause being shown, exempt the parties from compliance with any requirement of these rules and may give such directions in matters of practice and procedure, as it may consider just and expedient on the application moved in this behalf to render substantial justice.
14.Power to extend time - The Appellate Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed.
15.Powers and functions of the Registrar- The Registrar shall have the following powers and functions, namely: -
(a)shall be responsible for the day-to-day administration of the Appellate Tribunal;
(b)notify the procedure of filing appeal to the Appellate Tribunal;
(c)registration of appeals, petitions and applications and scrutiny thereof;
(d)receive applications for amendment of appeal or the petition or application or subsequent proceedings;
(e)receive applications for fresh summons or notices and regarding services thereof;
(f)receive applications for short date summons and notices;
(g)receive applications for substituted service of summons or notices;
(h)receive applications for seeking orders concerning the admission and inspection of documents;
(i)maintain records of proceedings and manage the registry; and
(j)such other incidental or matters as the President may direct from time to time.
16.Power of adjournment - All adjournments shall normally be sought before the concerned Bench and in extraordinary circumstances, the Registrar may, if so directed by the Appellate Tribunal in chambers, at any time adjourn any matter and lay the same before the Appellate Tribunal in chambers.
17.Delegation powers of the President – (i) The President may assign or delegate to the Vice president of State Bench of GSTAT some of the functions required by these rules to be exercised by the President.
(ii) The President may assign or delegate to a Joint/Deputy/Assistant Registrar or to any other suitable officer all or some of the functions required by these rules to be exercised by the Registrar.
Chapter III: Institution of appeals - Procedure.
18.Filing of Appeals -
A.An appeal to the Appellate Tribunal shall be filed online on GSTAT Portal in Form prescribed under CGST/SGST/UTGST Rules, 2017 along with the relevant documents.
(i)the cause title shall state “In the Goods and Service Tax Appellate Tribunal” and also set out the proceedings or order of the authority against which it is preferred;
(ii)appeal shall be divided into paragraphs and shall be numbered consecutively and each paragraph shall contain as nearly as may be, a separate fact or allegation or point;
(iii)full name, parentage, GSTIN, description of each party and address, as applicable, shall also be set out at the beginning of the appeal and need not be repeated in the subsequent proceedings in the same appeal;
(iv)the names of parties shall be numbered consecutively and a separate line should be allotted to the name and description of each party and these numbers shall not be changed and in the event of the death of a party during the pendency of the appeal, his legal heirs or representative, as the case may be, if more than one shall be shown by sub-numbers.
B.Notwithstanding the number of show cause notices, bills of entry, shipping bills, refund claims/demands, letters or declarations dealt with in the decision or order appealed against, it shall suffice for purposes of these rules that the appellant files one Appeal in prescribed Form against the order or decision of the authority below, along with such number of copies thereof as provided in rule 18(E).
Explanation- In a case where the —
(i)impugned order-in-appeal has been passed with reference to more than one orders-in-original, the prescribed Form for Appeal filed as per CGST/SGST/UTGST Rules 2017 shall be as many as the number of the orders-in-original to which the case relates in so far as the appellant is concerned;
(ii)In case an impugned order is in respect of more than one person, each aggrieved person will be required to file a separate appeal (and common appeals or joint appeals shall not be entertained).
C.Date of presentation of appeals. — The Registrar or, as the case may be, the officer authorised by him, shall endorse on every Form of Appeal the date on which it is presented or deemed to have been presented under that rule and shall sign the endorsement, if the appeal is filed physically.
D.Contents of an appeal Form. Every Form of Appeal shall set forth concisely and under distinct heads, the grounds of appeal and such grounds shall be numbered consecutively and shall be typed in double space of the paper.
Every Form of Appeal, cross-objections, reference applications, stay applications or any other miscellaneous applications shall also be typed neatly in double spacing on the A4 size paper and the same shall be duly paged, indexed and tagged firmly with Form of Appeal in a separate folder.
Every Form of Appeal/application/Cross-objection shall be signed and verified by the appellant/applicant/respondent or the authorised representative to sign Form of Appeal/application/Cross-objection. The appellant/ applicant/ respondent or authorized representative retained by them shall certify as true copy the documents produced before the Appellate Tribunal.
E.What to accompany Form of Appeal — Every Form of Appeal required to be heard by a two-Member Bench shall be
(i) filed in quadruplicate and shall be accompanied by four copies, one of which shall be a certified copy of the order appealed against in the case of an appeal against the original order passed by the adjudicating authority and where such an order has been passed in appeal or revision, four copies (one of which shall be a certified copy) of the order passed in appeal or in revision and four copies of the order of the original authority along with all the relevant documents including relied upon documents.
Explanation. — “Copy” for the purpose of this rule shall mean a true copy certified by the appellant or appellant’s authorized representative to be a true copy.
In an appeal filed under the direction of the Principal Commissioner or Commissioner, one of the copies of the order appealed against shall be an attested copy instead of a certified copy.
In the case of an appeal which can be heard by a single Member, Form of Appeal shall be filed in triplicate and number of copies of the order shall be three instead of four along with all the relevant documents including relied upon documents.
Note: - As to which appeals are to be heard by single Members shall be determined by the President by separate orders in the light of the relevant statutory provisions.
(ii)Where an appeal which can be heard by a Bench is referred to or placed before a larger Bench, the appellant shall immediately furnish additional copy of the Form of Appeal as per additional number of Members of referred Bench and of the order or orders of the lower authorities along with relevant documents.
(iii)A certified copy of the decision or order appealed against along with fees as specified in rule 110(5) of the CGST/SGST/UTGST Rules 2017 shall be submitted online and a final acknowledgement, indicating the appeal number shall be issued thereafter in Form prescribed under CGST/SGST/UTGST Rules 2017, by the Registrar:
(iv)The President may further direct that in case of non-filing of the documents as specified under this Rule, the Registrar or any other authorised officer would be competent to return the specified documents or sets of documents and to receive the same back only after rectification of the defects to the satisfaction of the proper officer or the Bench as the case may be and on the return the case may be assigned a new number.
(v)The Appellate Tribunal may on its own motion direct the preparation of as many copies as may be required of all the relevant documents including relied upon documents by and at the cost of the appellant or the respondent, containing copies of such statements, papers or documents as it may consider necessary for the proper disposal of the appeal.
(vi)President may by a general or special order allow attestation of the documents filed along with appeal/application or as a part of relevant documents including relied upon documents or otherwise by a gazetted officer or such other person as may be authorised by the President to attest or certify such documents or photo copies thereof.
(vii)All relevant documents including relied upon documents shall be clearly legible, duly paged, indexed and tagged firmly.
F.Endorsement and verification.- At the foot of every appeal or pleading along with all the relevant documents including relied upon documents, there shall appear the name and signature of the authorised representative and every appeal or pleadings shall be signed and verified by the party concerned in the manner provided by these rules.
(i)Translation of document. - (a) A document other than English language intended to be used in any proceeding before the Appellate Tribunal shall be received by the Registry accompanied by a copy in English, which is agreed to by both the parties or certified to be a true translated copy by the authorised representative engaged on behalf of parties in the case;
(b) Appeal or other proceeding shall not be set down for hearing until and unless all parties confirm that all the documents filed on which they intend to rely are in English or have been translated into English and required number of copies are filed with the Appellate Tribunal.
G.Endorsement and scrutiny of petition or appeal or document -(i) If, on scrutiny, the appeal or document is found to be defective, such document shall, after notice to the party, be returned for compliance and if there is a failure to comply within seven days from the date of return, the same shall be placed before the Registrar who may pass appropriate orders.
(ii) The Registrar may for sufficient cause return the said document(s) for rectification or amendment to the party filing the same, and for this purpose may allow to the party concerned such reasonable time as he may consider necessary or extend the time for compliance.
(iii) Where the party fails to take any step for the removal of the defect within the time fixed for the same, the Registrar may, for reasons to be recorded in writing, decline to register the appeal or pleading or document.
H.Registration of proceedings admitted. - On admission of appeal, the same shall be numbered and registered in the appropriate register maintained in this behalf and its number shall be entered therein.
I.Ex-parte amendments. - In every appeal or application, arithmetical, grammatical, clerical and such other errors may be rectified on the orders of the Registrar without notice to Parties.
Provided that no amendments shall be allowed ex-parte after appearance of the respondents.
J.Calling for records. - On the admission of appeal, the Registrar shall, if so directed by the Appellate Tribunal, call for the records relating to the proceedings from the respective Bench of Appellate Tribunal or adjudicating authority and retransmit the same at the conclusion of the proceedings or at any time.
K.Production of authorisation for and on behalf of an applicant/respondent/party. - Where an appeal purported to be instituted by or on behalf of an applicant/respondent/party, the person who signs or verifies the same shall produce along with such appeal, for verification by the Registrar, a true copy of authorization letter empowering such person to do so:
Provided that the Registrar may at any time call upon the party to produce such further materials as he deems fit for satisfying himself about due authorization.
L.Interlocutory applications. - Every interlocutory application for stay, direction, rectification in order, condonation of delay, early hearing, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall include all the information as per the prescribed GSTAT FORM-01 and the requirements prescribed in that behalf shall be complied with by the applicant, besides filing an affidavit supporting the application.
M.Procedure on production of defaced, torn or damaged documents. - When a document produced along with any pleading appears to be defaced, torn, or in any way damaged or otherwise its condition or appearance requires special notice, a mention regarding its condition and appearance shall be made by the party producing the same in the Index of such a pleading and the same shall be verified and initialed by the officer authorized to receive the same.
19.Grounds which may be taken in appeal — The appellant shall not, except by leave of the Appellate Tribunal, urge or be heard in support of any grounds not set forth in the Form of Appeal, but the Appellate Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the Form of Appeal or those taken by leave of the Appellate Tribunal under these rules:
Provided that the Appellate Tribunal shall not rest its decision on any other grounds unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground.
20.Rejection or amendment of Form of Appeal. — (i) The Registrar may, in its discretion, on sufficient cause being shown, accept a Form of Appeal which is not accompanied by the documents referred to in rule 18(E) above or is in any other way defective, and in such cases may require the appellant to file such documents or, as the case may be, make the necessary amendments within such time as it may allow.
The Registrar may reject the Form of Appeal, if the documents referred to therein are not produced, or the amendments are not made, within the time-limit allowed.
The President may in his discretion authorise any officer of the Appellate Tribunal to return any Form of Appeal, application or document(s) which is/are not in accordance with the GSTAT Procedural Rules, 2024. The Officer so authorised may, however, allow the documents to be refiled after removal of the defects in the specified time.
On representation the Bench concerned may in its discretion either accept the Form of Appeal in terms of above rules but the appeal/application may not be restored to its original number unless the Bench allows it to be so restored on sufficient cause being shown.
21.Who may be joined as respondents. — (i) In an appeal or an application by a person other than the [Principal Commissioner or Commissioner], the [Principal Commissioner or Commissioner] concerned shall be made the respondent to the appeal or, as the case may be.
In an appeal or an application by the [(ii)Principal Commissioner or Commissioner], the other party shall be made the respondent to the appeal or, as the case may be, application.
22.Endorsing copies to the party. — A copy each of appeal and relevant documents along with relied upon documents shall be provided to the respondent as well as to the concerned Principal Commissioner or Commissioner, as the case may be, as soon as they are filed.
23.Filing of Form of cross-objections, applications or replies to appeals/applications. — Every Form of cross-objections filed as prescribed under CGST/SGST/UTGST Rules 2017, and every application made, under the provisions of the Act, shall be registered and numbered, and the provisions of these rules, relating to appeals shall, so far as may be, apply to such Form or application.
24.Filing of Reply and other Documents by the Respondents. - (i) Each respondent may file his reply to the petition or the application and copies of the documents, either in person or through an authorised representative, with the registrar as specified by the Appellate Tribunal within one month and on the receipt thereof.
(ii) A copy of the reply or the application and the copies of other documents shall be forthwith served on the applicant by the respondent.
(iii) To the reply or documents filed under sub-rule (i), the respondent shall specifically admit, deny or rebut the facts stated by the applicant in his petition or application and state such additional facts as may be found necessary in his reply.
25.Filing of Rejoinder. - Where the respondent states such additional facts as may be necessary for the just decision of the case, the Bench may allow the petitioner to file a rejoinder to the reply filed by the respondent, with an advance copy to be served upon the respondent within one month or within such time as may be specified/extended by Bench.
Chapter IV:
Cause list
26.Preparation and publication of daily cause list. - (i) The Registrar shall prepare and publish which shall include all the information as in the prescribed Format GSTAT REG-01 on the notice board of the Appellate Tribunal before the closing of working hours on each working day the cause list for the next working day and subject to the directions of the President, listing of cases in the daily cause list shall be in the following order of priority, unless otherwise ordered by the concerned Bench; namely; -
(a) cases for pronouncement of orders;
(b) cases for clarification;
(c)cases for admission;
(d)cases for orders or directions;
(e)part-heard cases, latest part-heard having precedence; and
(f)cases posted as per numerical order or as directed by the Bench;
The Registrar shall communicate to the parties the date and place of hearing of the appeal or application.
(ii) The title of the daily cause list shall consist of the number of the appeal, the day, date and time of the sitting Bench Hall number and the coram indicating the names of the, Judicial members and Technical members constituting the Bench.
(iii) Against the number of each case listed in the daily cause list, the following shall be shown, namely;-
(a)names of the legal practitioners or authorised representative appearing for both sides and setting out in brackets the designation of the parties whom they represent;
(b)names of the parties, if unrepresented, with their ranks in brackets.
27.New cause list and adjournment of cases on account of non-sitting of an Appellate Tribunal - (i) If by reason of declaration of holiday or for any other unforeseen reason, the Appellate Tribunal does not function for the day, the new daily cause list shall be prepared for the cases listed for the day.
(ii) When the sitting of a particular Bench is cancelled for the reason of inability of any Member of the Bench, the Registrar shall, unless otherwise directed, adjourn the cases posted before that Bench to a convenient date.
(iii) The adjournment or posting or directions shall be notified on the notice board.
28.Service of Notices and processes. - (i) Any notice or process to be issued by the Appellate Tribunal may be served by post or at the e-mail address as provided in the petition or application or in the reply;
(ii) The notice or process if to be served physically may be served in any one of the following modes as may be directed by the Appellate Tribunal; -
(a)by hand delivery through a process server or respective authorised representative;
(b)by registered post or speed post with acknowledgment due.
(iii) Notwithstanding anything contained in sub-rules (i), the Appellate Tribunal may after taking into account the number of respondents and their place of residence or work or service could not be effected in any manner and other circumstances, direct that notice of the petition or application shall be served upon the respondents in any other manner, including any manner of substituted service, as it appears to the Appellate Tribunal just and convenient.
(iv) A notice or process may also be served on an authorised representative of the applicant or the respondent, as the case may be, in any proceeding or on any person authorised to accept a notice or a process, and such service on the authorised representative shall be deemed to be a proper service.
Chapter V:
Hearing of Appeal
29.Hearing of appeal — On the day fixed, or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal. The Appellate Tribunal shall then, if necessary, hear the respondent against the appeal and in such a case the appellant shall be entitled to reply.
30.Action on appeal for appellant’s default — Where on the day fixed for the hearing of the appeal or on any other day to which such hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Appellate Tribunal may, in its discretion, either dismiss the appeal for default or hear and decide it on merits:
Provided that where an appeal has been dismissed for default and the appellant appears afterwards and satisfies the Appellate Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Appellate Tribunal shall make an order setting aside the dismissal and restore the appeal.
31.Hearing of appeals ex parte — Where on the day fixed for the hearing of the appeal or on any other day to which the hearing is adjourned the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Appellate Tribunal may hear and decide the appeal ex parte.
32.Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application — Where in any proceedings the appellant or applicant or a respondent dies or is adjudicated as an insolvent or in the case of a company, is being wound up, the appeal or application shall abate, unless an application is made for continuance of such proceedings by or against the successor-in-interest, the executor, receiver, liquidator or other legal representative of the appellant or applicant or respondent, as the case may be:
Provided that every such application shall be made within a period of sixty days of the occurrence of the event:
Provided further that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period so specified, allow it to be presented within such further period as it may deem fit.
33.Production of additional evidence — (i) The parties to the appeal shall not be entitled to produce any additional evidence, either oral or documentary, before the Appellate Tribunal, but if the Appellate Tribunal is of opinion that any documents should be produced or any witness should be examined or any affidavit should be filed to enable it to pass orders or for any sufficient cause, or if adjudicating authority or the appellate or revisional authority has decided the case without giving sufficient opportunity to any party to adduce evidence on the points specified by them or not specified by them, the Appellate Tribunal may, for reasons to be recorded, allow such documents to be produced or witnesses to be examined or affidavits to be filed or such evidence to be adduced.
(ii) The production of any document or the examination of any witness or the adducing of any evidence under sub-rule (i) may be done either before the Appellate Tribunal or before such authority as the Appellate Tribunal may direct.
(iii) Where any direction has been made by the Appellate Tribunal to produce any documents or to examine any witnesses or to adduce any evidence before any authority, the authority shall comply with the directions of the Appellate Tribunal and after such compliance send the documents, the record of the deposition of the witnesses or the record of evidence adduced, to the Appellate Tribunal.
(iv) The Appellate Tribunal may, of its own motion, call for any documents or summon any witnesses on points at issue, if it considers necessary to meet the ends of justice.
34.Production of Evidence by Affidavit - (i) The Appellate Tribunal may direct the parties to give evidence, if any, by affidavit.
(ii) Notwithstanding anything contained in sub-rule (i), where the Appellate Tribunal considers it necessary in the interest of natural justice, it may order cross-examination of any deponent on the points of conflict either through information and communication technology facilities such as video conferencing or otherwise as may be decided by the Appellate Tribunal, on an application moved by any party.
35.Adjournment of appeal — The Appellate Tribunal may, on such terms as deem fit and at any stage of the proceedings, adjourn the hearing of the appeal.
36.Proceedings to be open to public — The proceedings before the Appellate Tribunal shall be open to the public:
Provided that the Appellate Tribunal may, if deem fit, order at any stage of the proceedings of any particular case that the public generally or any particular person shall not have access to, or be or remain in, the room or building used by the Appellate Tribunal.
37.Procedure for filing of and disposal of interlocutory Application — The provisions of the rules regarding the filing of interlocutory applications shall, in so far as may be, apply to the filing of applications under this rule (mutatis mutandis).
38.Appeal referred to larger Bench – In case of different opinion of Members of Bench while hearing an appeal, the appeal shall be referred to larger Bench by the President, as it deems fit, for disposal of the appeal.
39.Order to be signed and dated - Every order of the Appellate Tribunal shall be in writing and shall be signed and dated by the Members constituting the Bench concerned. Last date of hearing of the matter shall be typed on the first page of the order. If the order is dictated on the Bench, the date of dictation will be the date of the final order. If the order is reserved, the date of final order will be the date on which the order is pronounced.
In cases, where gist of the decision is pronounced without the detailed order, the last para of the detailed order shall specify the date on which the gist of the decision was pronounced. In such cases, the date of the final order shall be the date on which all the Members of the Bench sign the order. If they sign on different dates, the last of the dates will be the date of the order.
40.Publication of orders — Such of the orders of the Appellate Tribunal as are deemed fit for publication in any authoritative report or the press, may be released for such publication on such terms and conditions as the Appellate Tribunal may lay down.
Chapter VI:
RECORD OF PROCEEDINGS
41.Court Diary —(i) Diaries shall be kept by the Court Officer which shall include all the information as given in form GSTAT REG-02 as may be specified in each appeal or petition or application and they shall be written legibly;
(ii) The diary in the main file shall contain a concise history of the appeal or petition or application, the substance of the order passed thereon and in execution proceedings, it shall contain a complete record of all proceedings in execution of order or direction or rule and shall be checked by the Deputy/Assistant Registrar and initiated once in a fortnight.
42.Order sheet — (i) The Court officer of the Bench shall maintain order sheet which shall include all the information as prescribed in GSTAT FORM-02 in every proceedings and shall contain all orders passed by the Appellate Tribunal from time to time;
(ii) All orders passed by the Appellate Tribunal shall be in English and the same shall be signed by the Members of the Appellate Tribunal constituting the Bench:
Provided that the routine orders, such as call for of the records, put up with records, adjourned and any other order as may be directed by the Member of the Tribunal shall be signed by the Court officer of the Bench;
(iii) The order sheet shall also contain the reference number of the appeal or petition or application, date of order and all incidental details including short cause title thereof.
43.Maintenance of court diary — (i) The Court officer of the Bench shall maintain legibly /on GSTAT portal a Court Diary, wherein he shall record the proceedings of the court for each sitting with respect to the applications or petitions or appeals listed in the daily cause list;
(ii) The matters to be recorded in the court Diary shall include details as to whether the case is adjourned or part-heard or heard and disposed of or heard and orders reserved, as the case may be, along with dates of next sitting wherever applicable.
44.Statutes or citations for reference. —The parties or authorised representative or legal practitioners shall, before the commencement of the proceedings for the day, furnish to the Court officer a list of law journals, reports, statutes and other citations, which may be needed for reference or photocopy of full text thereof.
45.Calling of cases in court. —Subject to the orders of the Bench, the Court officer shall call the cases listed in the cause list in the serial order.
46.Regulation of court work. — (i) When the Appellate Tribunal is holding a sitting, the Deputy/ Assistant Registrar shall ensure –
(a) that no inconvenience or wastage of time is caused to the Bench in making available the services of Court officer or stenographer or peon or attender;
(b) the Court officer shall ensure that perfect silence is maintained in and around the Court Hall and no disturbance whatsoever is caused to the functioning of the Bench and that proper care is taken to maintain dignity and decorum of the court.
(ii) When the Bench passes order or issues directions, the Court officer shall ensure that the records of the case along with proceedings or orders of the Bench are transmitted immediately to the Deputy/Assistant Registrar and the Deputy/Assistant Registrar shall verify the case records received from the Court Officer with reference to the cause list and take immediate steps to communicate the directions or orders of the Bench.
Chapter VII:
MAINTENANCE OF REGISTERS
47.Registers to be maintained. —The following Registers shall be maintained online/offline and posted on a day-to-day basis by such ministerial officer or officer of the Registry may, subject to any order of the President, –
(a) register of un-numbered petitions or appeals (GSTAT-REG-03);
(b) register of petitions or appeals (GSTAT-REG-04); and
(c) register of interlocutory applications(GSTAT-REG-05);
48.Arrangement of records in pending matters. —The record of appeal or petition shall be divided into the following four parts and shall be collated and maintained –
(a) main file: (Petition being kept separately);
(b) miscellaneous application file;
(c) process file; and
(d) execution file
49.Contents of main file. —The main file shall be kept in the following order and it shall be maintained as permanent record till ordered to be destroyed under the rules –
(a) index;
(b) order sheet;
(c) final order or judgment;
(d) Form of Appeal or petition, as the case may be, together with any schedule annexed thereto;
(e) counter or reply or objection, if any;
(f) (i) oral evidence or proof of affidavit;
(ii) evidence taken on commission; and
(iii) documentary evidence;
(g) written arguments.
50.Contents of process file. —The process file shall contain the following items; namely –
(a) index;
(b) power of attorney or vakalatnama;
(c) summons and other processes and affidavits relating thereof;
(d) applications for summoning witness;
(e) letters calling records; and
(f) all other miscellaneous papers such as postal acknowledgements.
51.Contents of Execution file. —The execution file shall contain the following items, namely-
(a) index;
(b) the order sheet;
(c) the execution application;
(d) all processes and other papers connected with such execution proceedings;
(e) transmission of order to civil court, if ordered; and
(f) result of execution;
52.File for miscellaneous applications —For all miscellaneous applications there may be only one file with a title page prefixed to it and immediately after the title page, the diary, the miscellaneous applications, supporting affidavit, the order sheet and all other documents shall be filed.
53.Preservation of Record — (i) All necessary documents and records relating to petitions or applications dealt with by the Appellate Tribunal shall be stored or maintained as provided in these rules and other physical records kept in a record room shall be preserved for a period of five years after the passing of the final order;
(ii) Notwithstanding anything contained in sub-rule (i) the record of the petitions or applications dealt with by the Appellate Tribunal including the orders and directions passed by the Appellate Tribunal, shall be maintained by the Registry of the Appellate Tribunal for a period of fifteen years after the passing of the final order.
54.Retention, Preservation and Destruction of Records. — (i) The Record Keeper or any other officer so designated shall be responsible for the records consigned to the Record Room. He shall scrutinize the records received by him within three days and prepare an index in prescribed Format;
(ii) On the expiry of the period for preservation of the records specified under rule 53, the Registrar shall weed out the record.
Chapter VIII:
INSPECTION OF RECORD
55.Inspection of the records. - The applicant to any case or their authorised representative may be allowed to inspect the record of the case by making an application in writing in prescribed GSTAT-FORM-03 to the Registrar and by paying the fee prescribed as per Schedule of Fee.
56.Grant of inspection. - Inspection of records of a pending or decided case before the Appellate Tribunal shall be allowed only on the order of the Registrar.
57.Application for grant of inspection. - (i) Application for inspection of record under rule 55, shall be presented at Registry between 10.30 AM to 01:30 PM on any working day and two days before the date on which inspection is sought, unless otherwise permitted by the Registrar;
(ii) The Registry shall submit the application with its remarks before the Registrar, who shall, on consideration of the same, pass appropriate orders;
(iii) Inspection of records of a pending case shall not ordinarily be permitted on the date fixed for hearing of the case or on the preceding day.
58.Mode of inspection. - (i) On grant of permission for inspection of the records, the Deputy/Assistant Registrar shall arrange to procure the records of the case and allow inspection of such records on the date and time fixed by the Registrar between 10.30 AM and 12.30 PM and between 2.30 PM and 4.30 PM in the immediate presence of an officer authorised in that behalf by the Registrar;
(ii) The person inspecting the records shall not in any manner cause dislocation, mutilation, tampering or damage to the records in the course of inspection;
(iii) The person inspecting the records shall not make any marking on any record or paper so inspected and taking notes;
(iv) The person supervising the inspection, may at any time prohibit further inspection, if in his opinion, any of the records are likely to be damaged in the process of inspection or the person inspecting the records has violated or attempted to violate the provisions of these rules and shall immediately make a report about the matter to the Registrar and seek further orders from the Registrar and such notes shall be made in the Inspection Register.
59.Maintenance of register of inspection. - The Deputy/Assistant Registrar shall cause to maintain a Register as per GSTAT REG-06 for the purpose of inspection of documents or records and shall obtain therein the signature of the person making such inspection on the Register as well as on the application on the conclusion of inspection.
Chapter IX:
Appearance of authorised representative
60.Appearance of authorised representative - Subject to as hereinafter provided, no legal practitioner or authorised representative shall be entitled to appear and act, in any proceeding before the Appellate Tribunal unless he files into Appellate Tribunal vakalatnama or Memorandum of Appearance or letter of authorisation which shall include all the information as prescribed in GSTAT FORM-04 as the case may, duly executed by or on behalf of the party for whom he appears.
61.Consent for engaging or change of authorised representative (Duly stamped as per the respective High Court Rules) - A legal practitioner or authorised representative proposing to file a Vakalatnama or Memorandum of Appearance or letter of authorisation as the case may be, in any pending case or proceeding before the Appellate Tribunal in which there is already a legal practitioner or authorised representative on record, shall do so only with the written consent of the legal practitioner or the authorised representative on record or when such consent is refused, with the permission of the Appellate Tribunal after revocation of Vakalatnama or Memorandum of Appearance as the case may be, on an application filed in this behalf, which shall receive consideration only after service of such application on the counsel already on record.
62.Restrictions on appearance - A legal practitioner or the authorised representative as the case may be, who has tendered advice in connection with the institution of any case or other proceeding before the Appellate Tribunal or has drawn pleadings in connection with any such matter or has during the progress of any such matter acted for a party, shall not, appear in such case or proceeding or other matter arising there from or in any matter connected therewith for any person whose interest is opposed to that of his former client, except with the prior permission of the Appellate Tribunal.
63.Restriction on party’s right to be heard - The party who has engaged a legal practitioner or authorised representative to appear for him before the Appellate Tribunal may be restricted by the Appellate Tribunal in making presentation before it.
64.Empanelment of special authorised representatives by the Appellate Tribunal - (i) The Appellate Tribunal may draw up a panel of authorised representatives or valuers or such other experts as may be required by the Appellate Tribunal to assist in proceedings before the Appellate Tribunal;
(ii) The President may call upon any of the persons from panel under sub-rule (i) for assistance in the proceedings before the Bench, if so required;
(iii) The remuneration payable and other allowances and compensation admissible to such persons shall be specified in consultation with the Appellate Tribunal.
65.Professional dress for the authorised representatives. - While appearing before the Appellate Tribunal, the authorised representatives shall wear the same professional dress as prescribed in their Code of Conduct.
Chapter X:
AFFIDAVITS
66.Title of affidavits. - Every affidavit shall be titled as ‘Before the Goods and Services Tax Appellate Tribunal (GSTAT).’ followed by the cause title of the appeal or application or other proceeding in which the affidavit is sought to be used.
67.Form and contents of the affidavit. - The affidavit shall conform to the requirements of order XIX, rule 3 of Civil Procedure Code, 1908 (5 of 1908).
68.Persons authorised to attest. - Affidavits shall be sworn or affirmed before an advocate or notary, who shall affix his official seal.
69.Affidavits of illiterate, visually challenged persons. - Where an affidavit is sworn or affirmed by any person who appears to be illiterate, visually challenged or unacquainted with the language in which the affidavit is written, the attester shall certify that the affidavit was read, explained or translated by him or in his presence to the deponent and that he seemed to understand it, and made his signature or mark in the presence of the attester which shall include all the information as prescribed in GSTAT FORM-05.
70.Identification of deponent. - If the deponent is not known to the attester, his identity shall be testified by a person known to him and the person identifying shall affix his signature in token thereof.
71.Annexures to the affidavit. - (i) Document accompanying an affidavit shall be referred to therein as Annexure number and the attester shall make the endorsement thereon that this is the document marked putting the Annexure number in the affidavit;
(ii) The attester shall sign therein and shall mention the name and his designation.
Chapter XI:
DISCOVERY, PRODUCTION AND RETURN OF DOCUMENTS
72.Application for production of documents, form of summons. -(i) Except otherwise provided hereunder, discovery or production and return of documents shall be regulated by the provisions of the Code of Civil Procedure, 1908 (5 of 1908);
(ii) An application for summons to produce documents shall be on plain paper setting out the document the production of which is sought, the relevancy of the document and in case where the production of a certified copy would serve the purpose, whether application was made to the proper officer and the result thereof;
(iii) A summons for production of documents in the custody of a public officer other than a court shall include all the information as Prescribed in GSTAT FORM-06 and shall be addressed to the concerned Head of the Department or such other authority as may be specified by the Appellate Tribunal.
73.Suo motu summoning of documents. - Notwithstanding anything contained in these rules, the Appellate Tribunal may, suo motu, issue summons for production of public document or other documents in the custody of a public officer.
74.Marking of documents. - (i) The documents when produced shall be marked as follows:
(a) If relied upon by the appellant’s or petitioner’s side, they shall be numbered as ‘A’ series;
(b) If relied upon by the respondent’s side, they shall be marked as ‘B’ series;
(c) The Appellate Tribunal exhibits shall be marked as ‘C’ series.
(ii) The Appellate Tribunal may direct the applicant to deposit with the Appellate Tribunal through online mode a sum sufficient to defray the expenses for transmission of the records.
75.Return and transmission of documents. - (i) An application for return of the documents produced shall be numbered and no such application shall be entertained after the destruction of the records;
(ii) The Appellate Tribunal may, at any time, direct return of documents produced subject to such conditions as it deems fit.
Chapter XII:
EXAMINATION OF WITNESSES AND ISSUE OF COMMISSIONS
76.Procedure for examination of witnesses, issue of Commissions - The provisions of the Orders XVI and XXVI of the Code of Civil Procedure, 1908 (5 of 1908), shall mutatis mutandis apply in the matter of summoning and enforcing attendance of any person and examining him on oath and issuing commission for the examination of witnesses or for production of documents.
77.Examination in camera. - The Appellate Tribunal may in its discretion examine any witness in camera.
78.Form of oath or affirmation to witness. - Oath shall be administered to a witness in the following form:
“I do swear in the name of God/solemnly affirm that what I shall state shall be truth, the whole truth and nothing but the truth”.
79.Form of oath or affirmation to interpreter. - Oath or solemn affirmation shall be administered to the interpreter in the following form before the Bench Officer or the Court Officer as the case may be, as taken for examining a witness:
“I do swear in the name of God/solemnly affirm that I will faithfully and truly interpret and explain all questions put to and evidence given by witness and translate correctly and accurately all documents given to me for translation.”
80.Officer to administer oath. - The oath or affirmation shall be administered by the Court officer.
81.Form recording of deposition. - (i) The Deposition of a witness shall be recorded in prescribed GSTAT FORM-07;
(ii) Each page of the deposition shall be initialed by the Members constituting the Bench;
(iii) Corrections, if any, pointed out by the witness may, if the Bench is satisfied, be carried out and duly initialed. If not satisfied, a note to the effect be appended at the bottom of the deposition.
82.Numbering of witnesses - The witnesses called by the applicant or petitioner shall be numbered consecutively as PWs and those by the respondents as RWs.
83.Grant of discharge certificate - Witness discharged by the Appellate Tribunal may be granted a certificate in prescribed GSTAT FORM-08 by the Registrar.
84.Witness allowance payable - (i) Where the Appellate Tribunal issues summons to a Government servant to give evidence or to produce documents, the person so summoned may draw from the Government travelling and daily allowances admissible to him as per rules;
(ii) Where there is no provision for payment of Travelling Allowances and Daily Allowance by the employer to the person summoned to give evidence or to produce documents, he shall be entitled to be paid as allowance, (a sum in the opinion of the Registrar sufficient to defray the travelling and other expenses considering unemployed or retired person diet money in addition to T.A.), having regard to the status and position of the witness;
(iii) The party applying for the summons shall deposit with the Registrar the amount of allowance as estimated by the Registrar well before the summons is issued;
(iv) If the witness is summoned as a court witness, the amount estimated by the Registrar shall be paid as per the directions of the Appellate Tribunal;
(v) The aforesaid provisions would govern the payment of bhatta to the interpreter as well.
85.Records to be furnished to the Principal Commissioner or Commissioner - (i) The Principal Commissioner or Commissioner shall be furnished by the Appellate Tribunal with such of the records of the case as the Appellate Tribunal considers necessary for executing the Commission;
(ii) Original documents shall be furnished only if a copy does not serve the purpose or cannot be obtained without unreasonable expense or delay and delivery and return of records shall be made under proper acknowledgement.
86.Taking of specimen handwriting, signature etc. -The Principal Commissioner or Commissioner may, if necessary, take specimen of the handwriting, signature or fingerprint of any witness examined before him.
Chapter XIII:
DISPOSAL OF CASES AND PRONOUNCEMENT OF ORDERS
87.Disposal of Cases. - On receipt of an application, petition, appeal etc, the Appellate Tribunal, after giving the parties a reasonable opportunity of being heard, pass such orders thereon as it thinks fit:
Provided that the Appellate Tribunal, after considering an appeal, may summarily dismiss the same, for reasons to be recorded, if the Appellate Tribunal is of opinion that there are no sufficient grounds for proceedings therewith.
88.Operative portion of the order. - All orders or directions of the Bench shall be stated in clear and precise terms in the last paragraph of the order.
89.Corrections. - Every Member of the Bench who has prepared the order shall initial all corrections and affix his initials at the bottom of each page.
90.Power to impose Costs. - The Appellate Tribunal may, in its discretion, pass such order in respect of imposing costs on the defaulting party as it may deem fit.
91.Pronouncement of Order. - (i) The Appellate Tribunal, after hearing the applicant and respondent, shall make and pronounce an order either at once or, as soon as thereafter as may be practicable but not later than thirty days from the final hearing excluding vacations or holidays;
(ii) Every order of the Appellate Tribunal shall be in writing and shall be signed and dated by the President or Member or Members constituting the Bench which heard the case and pronounced the order;
(iii) A certified copy of every order passed by the Appellate Tribunal shall be given to the parties;
(iv) The Appellate Tribunal, may transmit order made by it to any court for enforcement, on application made by either of the parties to the order or suo motu;
(v) Every order or judgment or notice shall bear the seal of the Appellate Tribunal.
92.Pronouncement of order by any one member of the Bench –
(i) Any Member of the Bench may pronounce the order for and on behalf of the Bench;
(ii) When an order is pronounced under this rule, the Court officer shall make a note in the order sheet, that the order of the Bench consisting of President or Members was pronounced in open court on behalf of the Bench.
93.Authorising any member to pronounce order (i) If the Members of the Bench who heard the case are not readily available or have ceased to be Members of the Appellate Tribunal, the President may authorise any other Member to pronounce the order on his behalf after being satisfied that the order has been duly prepared and signed by all the Members who heard the case;
(ii) The order pronounced by the Member so authorised shall be deemed to be duly pronounced;
(iii) The Member so authorised for pronouncement of the order shall affix his signature in the order sheet of the case stating that he has pronounced the order as provided in this rule;
(iv) If the order cannot be signed by reason of death, retirement or resignation or for any other reason by anyone of the Members of the Bench who heard the case, it shall be deemed to have been released from part heard and listed afresh for hearing.
94.Recusal - (1) For the purpose of maintaining the high standards and integrity of the Appellate Tribunal, the President or a Member of the Appellate Tribunal shall recuse himself:-
(a) in any cases involving persons with whom the President or the Member has or had a personal, familial or professional relationship;
(b) in any cases concerning which the President or the Member has previously been called upon in another capacity, including as advisor, representative, expert or witness; or
(c) if there exists other circumstances such as to make the President or the Member’s participation seem inappropriate.
(2) The President or any Member recusing himself may record reasons for recusal:
Provided that no party to the proceedings or any other person shall have a right to know the reasons for recusal by the President or the Member in the case.
95.Enlargement of time. - Where any period is fixed by or under these rules, or granted by Appellate Tribunal for the doing of any act, or filing of any document or representation, the Appellate Tribunal may, in its discretion from time to time in the interest of justice and for reasons to be recorded, enlarge such period, even though the period fixed by or under these rules or granted by the Appellate Tribunal may have expired.
96.Rectification of Order. - (i) Any clerical or arithmetical mistakes in any order of the Appellate Tribunal or error therein arising from any accidental slip or omission may, at any time, be corrected by the Appellate Tribunal on its own motion or on application of any party by way of rectification.
(ii) An application under sub-Rule (i) may be made online which shall include all the information as prescribed in GSTAT FORM-01 within one month from the date of the final order for rectification of the final order.
97.General power to amend. – The Appellate Tribunal may, within a period of thirty days from the date of completion of pleadings, and on such terms as to costs or otherwise, as it may think fit, amend any defect or error in any proceeding before it; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceeding.
98.Making of entries by Court officer. - Immediately on pronouncement of an order by the Bench, the Court officer shall make necessary endorsement on the case file regarding the date of such pronouncement, the nature of disposal and the constitution of the Bench pronouncing the order and he shall also make necessary entries in the court diary which shall include all the information as prescribed in GSTAT REG-02 maintained by him.
99.Transmission of order by the Court officer. - (i) The Court officer shall immediately on pronouncement of order, transmit the order with the case file to the Deputy/ Assistant Registrar;
(ii) On receipt of the order from the Court officer, the Deputy/Assistant Registrar shall after due scrutiny, satisfy himself that the provisions of these rules have been duly complied with and in token thereof affix his initials with date on the outer cover of the order;
(iii) The Deputy/Assistant Registrar shall thereafter cause to transmit the case file and the order to the Registrar for taking steps to prepare copies and their communication to the parties.
100.Format of order. - (i) All orders shall be neatly and fairly typewritten in double space on one side only on durable foolscap folio paper of metric A-4 size (30.5 cm long and 21.5 cm wide) with left side margin of 5 cm and right-side margin of 2.5 cm. Corrections, if any, in the order shall be carried out neatly and sufficient space may be left both at the bottom and at the top of each page of the order to make its appearance elegant;
(ii) Members constituting the Bench shall affix their signatures in the order of their seniority from right to left.
101.Indexing of case files after disposal. - After communication of the order to the parties or authorised representative, the official concerned shall arrange the records with pagination and prepare in the Index Sheet in Format prescribed by the Appellate Tribunal. He shall affix initials and then transmit the records with the Index initials to the records room.
102.Copies of orders in library. - (i) The officer in charge of the Registry shall send copies of every final order to the library of the Appellate Tribunal;
(ii) Copies of all orders received in each month shall be kept at the library in a separate folder, arranged in the order of date of pronouncement, duly indexed and stitched;
(iii) At the end of every year, a consolidated index shall also be prepared and kept in a separate file in the library;
(iv) The order folders and the indices may be made available for reference in the library to the authorised representative.
Chapter XIV:
Goods and Services Tax Appellate Tribunal Orders
103.Register of Appeals, Petitions, etc.- (i) A Register in prescribed GSTAT REG-07 & 08 shall be maintained in regard to appeals, petitions, etc., against the orders of the Appellate Tribunal to the Hon’ble Supreme Court and Hon’ble High Courts and necessary entries therein be promptly made by the judicial branch;
(ii) The register shall be placed for scrutiny by the President/Vice President, as the case may be, in the first week of every month.
104.Placing of order of Hon’ble Supreme Court and Hon’ble High Courts before the Appellate Tribunal - Whenever an interim or final order passed by the Hon’ble Supreme Court/ Hon’ble High Courts in an appeal or other proceeding preferred against a decision of the Appellate Tribunal is received, the same shall forthwith be placed before the President and same Bench of Members for information and kept in the relevant case file and immediate attention of the Registrar shall be drawn to the directions requiring compliance.
105.Registrar to ensure compliance of Hon’ble Supreme Court or Hon’ble High Courts orders - It shall be the duty of the Registrar to take expeditious steps to comply with the directions of the Hon’ble Supreme Court/Hon’ble High Courts matter pertains to the Appellate Tribunal.
106.Fees — (i) In respect of the several matters, there shall be paid fees as prescribed in the Schedule of Fees appended to these rules;
Provided that no fee shall be payable or shall be liable to be collected on a petition or application filed or reference made by any departmental authority connected with a matter in question before the Appellate Tribunal.
(ii) In respect of every interlocutory application, there shall be paid fees as prescribed in Schedule of Fees of these rules:
Provided that no fee shall be payable or shall be liable to be collected on a petition or application filed or reference made by any departmental authority connected with a matter in question before the Appellate Tribunal.
(iii) In respect of a petition or appeal or application filed or references made before the Principal Bench or the Bench of the Appellate Tribunal, fees referred to in this Part shall be paid by means of a bank demand draft or Indian Postal Order drawn in favour of the Pay and Accounts Officer, Ministry of Finance, New Delhi, as the case may be or as decided by the President.
107.Award of costs in the proceedings — (i) Whenever the Appellate Tribunal deems fit, it may award cost for meeting the legal expenses of the respondent of defaulting party.
(ii) The Appellate Tribunal may in suitable cases direct appellant or respondent to bear the cost of litigation of the other side, and in case of abuse of process of court, impose exemplary costs on defaulting party.
108.Dress for the Members — The dress for the Members shall be such as the President may prescribe.
109.Dress for the parties — Every authorised representative other than a relative or regular employee of a party shall appear before the Appellate Tribunal in his professional dress, if any, and, if there is no such dress, —
(i)if a male, in a close-collared black coat, or in an open-collared black coat, with white shirt and black tie; or
(ii)if a female, in a black coat over a white sari or any other white dress :
Provided that during the summer season from 15th April to 31st August, the authorised representatives may, when appearing before a Bench of the Appellate Tribunal, dispense with the wearing of a black coat.
Explanation. - For the purpose of this Rule, the expression, “regular employee of a party‟ shall not include a departmental officer who is appointed as an authorised representative.
110. Removal of difficulties and issue of directions.- Notwithstanding anything contained in the rules, wherever the rules are silent or not provisions is made, the President may issue appropriate directions to remove difficulties and issue such orders or circulars to govern the situation or contingency that may arise in the working of the Appellate Tribunal.
111.Inspection by the President – The President, Principal Bench, or any Judicial or Technical Member of the Principal Bench, nominated by the President, shall have the authority to inspect the office and proceedings of the State Benches, as per procedure & Rules for travel and inspection decided by the President and the Member of the Appellate Tribunal.
GSTAT FORM -01
[See rule 18(L) and 37]
Interlocutory Application to the Appellate Tribunal
1. GSTIN/ Temporary ID /UIN –
2. Name of the appellant –
3. Address of the appellant –
4. Original Appeal Number- Date-
5. Date of last hearing –
6. Name of the representative –
7. Purpose of the Interlocutory application –
8. Whether the appellant wishes to be heard in person? -
9. Statement of facts -
10. Grounds of appeal -
11. Prayer -
Place: Date:
Signature
Name of the Applicant:
Designation /Status:
GSTAT FORM -02 - ORDER SHEET
[See rule 42]
(in Appeal)
No........................................ Registrar
Appellate Tribunal
(Appellant) Vs (Respondent)
------------------------------------------------------------------------------------------
Sl. No., or Brief order, mentioning How complied
Order and date Reference, if necessary with & date of
compliance
------------------------------------------------------------------------------------------
1. Form of Appeal presented by hand/
received by post/ Online from Appellant on...........................has been registered.
It is in order .........................
It is not in order for the reasons stated.
1.
2.
3.
4.
For Deputy/ Assistant Registrar
2. A copy of Order be
sent to the respondent/appellant
For Deputy/Assistant Registrar Dispatched on.........
Format of Indexing
[See rule 54 & 101]
1.Appeal No.-
2.Appellants’ Name(s), (GSTIN, if any) and Address –
3.Respondent name(s), (GSTIN, if any) and Address –
4.No. of Order in Appeal –
5.Period of dispute –
6.Section under which original order passed –
7.State Jurisdiction –
8.Bench to which assigned and whether single member case-
9.Name of Members -
10.Date of Hearings -
11.Interim Order, if any with date –
12.Date of final appeal order -
13.Nature of order allowed, partly allowed or dismissed –
14.Remarks –
GSTAT FORM-03 - INSPECTION
[See rule 55]
Application to the Registrar for inspection of records
1. GSTIN/ Temporary ID /UIN –
2. Name of the appellant –
3. Address of the appellant –
4. Original Appeal/Order Number - Date-
5. Grounds of inspection –
6. Purpose of inspection –
7. Details of payment -
8. Detail of documents for inspection –
(i) ………..
(ii) ………..
(iii) ……………
9. Remarks, if any -
Place: Date:
Signature
Name of the Applicant:
Designation /Status:
SCHEDULE OF FEES
S.No. Relevant Section/Rules Nature of application / petition Fees
1. Rule 55 of GSTAT Procedural Rules 2024 Application for Inspection of Records 5,000/-
2. Rule 106(ii) of GSTAT procedural Rules 2024 Interlocutory Applications 5000/-
3. Rule 110(5) of CGST/SGST/UTGST Rules 2017 Appeals to GSTAT As per rule
4. Application under any other provisions specifically not mentioned herein above 5,000/-
5. Fee for obtaining certified true copy of final order passed to parties other than the concerned parties under Rule 5/- per page
GSTAT FORM-04
(see rule 60)
Memorandum of appearance
To
The Registrar,
The Goods and Services Tax Appellate Tribunal
In the matter of …………. Petitioner.
Vs.
………………..Respondent
(Appeal No. ………of 20………)
Sir,
Please take notice that I, …….., authorised representative/ practising Chartered Accountant/practising Cost Accountant/ legal practitioner, duly authorised to enter appearance, and do hereby enter appearance, on behalf of …………….. petitioner/ respondent/ Registrar/ Government of ………………….. in the above-mentioned petition.
*A copy of the authorisation/vakalatnama passed by the Appellant/Respondent authorising me to enter appearance and to act for every purpose connected with the proceedings for the said party is enclosed, duly signed by me for identification.
Yours sincerely,
Dated ………. day of ……………
Address:
Enclosure: as aforesaid Tele No.:
GSTAT FORM-05
BEFORE THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
[See Rule 69]
Certification when deponent is unacquainted with the language of the affidavit or is blind or illiterate.
Contents of the affidavit were truly and audibly read over/translated into ………............... language known to the deponent and he seems to have understood the same and affixed his Left Thumb Impression/Signature/Mark.
(Signature)
Name and designation with date.
GSTAT FORM-06 - SUMMONS
BEFORE THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
[See Rule 72]
To,
…………
Whereas the Appellate Tribunal suo motu or on consideration of the request made by Shri/ Smt/ M/s …………………..(Appellant/Respondent) having been satisfied that production of the following documents or records under your control or custody is necessary for proper decision of the above case, you are hereby directed to cause production of the said documents/records before this Tribunal /forward duly authenticated copies thereof on or before the …………………day of…..20………
(Enter description of documents requisitioned)
“By Order of Appellate Tribunal”
Registrar
GSTAT FORM-07
[See Rule 81]
BEFORE THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
Appeal No…………… of 20……………
Deposition of Petitioner’s Witness/Respondent’s Witness
1. Name :
2. Father’s/Mother’s/Husband’s Name :
3. Age :
4. Occupation :
5. Place of Residence and address :
6. Name of the Officer administering the
Oath / affirmation :
7. Name of the Interpreter if any, duly
Sworn/ solemnly affirmed :
Duly sworn/ solemnly/ affirmed
Examination-in-chief: By
Date:
…………………………………………………………………….
Cross-examination: By
……………………………………………………………………
Re-examination, if any:
……………………………………………………………………
(Signature of the witness on each page)
Statement of witness as recorded was read over/translated to the witness, who admitted it to be correct.
Signature of the Member of the Appellate Tribunal with date
GSTAT FORM-08
[See Rule 83]
CERTIFICATE OF DISCHARGE
Certified that …………………………………………… appeared before this Appellate Tribunal as a witness/in/Appeal No. …………………………..of 20……, on behalf of the appellant or respondent as Court witness on this ……………day of ….20…… and that he was relieved at ………………….on…………………… He was paid/not paid any T.A. and D.A. or allowance of Rs……………….
Date : Signature of the Registrar
(Seal of the Appellate Tribunal)
CAUSE LIST- GSTAT REG-01
[See rule 26]
Date:
Sl.No. Court No. & Time Name of the Members Appeal No. Interlocutory Application/ Main Application Purpose Section Name of Parties Name of AR for Petitioner/ Appellant Name of counsel for Respondent Remarks
GSTAT REG-02 - COURT DIARY
[See rule 41 & 98]
Sl. No. Appeal No. Appellant/ Respondent Time at which sitting of Bench commenced Time at which the Bench rose for lunch break Time at which Bench re-assembled Time at which the Bench finally rose for the day Whether the judgement is dictated in the open court, if so by which Member and Which SPS/PA took dictation If not, Member to whom the case is assigned for passing the order Whether the matter is part-heard, if so the next date given for hearing Whether order is reserved, if so, the date of pronouncement of the order Whether matter is adjourned with date then the next date of hearing Initials of Gazetted Officer Remarks
1 2 3 4 5 6 7 8 9 10 11 12 13 14
GSTAT-REG-03 - Register of Provisional Appeals
[See rule 47(a)]
Sl.
No. Prov. Appeal No. Appellants’ Name(s) and Address Respondent name(s) and Address No. of Order in Appeal State Jurisdiction Appeal accepted or rejected with date Payment of fee Remarks
1 2 3 4 5 6 7 8 9
GSTAT-REG-04- Register of Appeals
[See rule 47(b)]
Sl.
No. Appeal No. Appellants’ Name(s) and Address Respondent name(s) and Address No. of Order in Appeal Period of dispute Section under which original order passed State Jurisdiction Bench to which assigned and whether single member case Interim Order, if any with date Date of final appeal order Nature of order allowed, partly allowed or dismissed Remarks
1 2 3 4 5 6 7 8 9 10 11 12 13
GSTAT-REG-05 - Register of Interlocutory Appeals
[See rule 47(c)]
Sl.
No. Original Appeal No. No. of Interlocutory Appeal Appellants’ Name(s) and Address Respondent Name(s) and Address Bench for which application/appeal filed Date of order in interlocutory application Order- whether allowed or dismissed, with date Remarks
1 2 3 4 5 6 7 8 9
GSTAT-REG-06- Register of Inspection
[See rule 59]
Sl.
No. No. of Application with date Name of Applicant and Address No. of Appeal related, if any Application dismissed / allowed with date Payment of Fee Date of Inspection & conclusion Signature of the applicant Inspection Supervisory Officer Remarks
1 2 3 4 5 6 7 8 9
GSTAT REG- 07-SUPREME COURT
[See Rule 103]
Court No. No. of Appeal
Before the GSTAT No. of Order in Appeal Name of the Applicant/ Respondent Date of dispatch
of records to GSTAT Date of receipt of records at GSTAT Appeal dismissed/
allowed with date Interim Direction
If any, with date Final order
in the appeal with date Direction
If any, for compliance by the Appellate Tribunal Steps
Taken for compliance Remarks
1 2 3 4 5 6 7 8 9 10 11 12
GSTAT REG-08 – HIGH COURT
[See Rule 103]
Court No. No. of Appeal
Before the GSTAT No. of Order in Appeal Name of the Applicant/ Respondent Date of dispatch
of records to GSTAT Date of receipt of records at GSTAT Appeal dismissed/
allowed with date Interim Direction
If any, with date Final order
in the appeal with date Direction
If any, for compliance by the Appellate Tribunal Steps
Taken for compliance Remarks
1 2 3 4 5 6 7 8 9 10 11 12
Agenda Item 7(d): Relaxation in the eligibility criteria for selection to the post of Technical Member (State) of Goods and Services Tax Appellate Tribunal (GSTAT) for officers of the state of Goa.
Post the recommendations of the GST Council, relaxation regarding eligibility criteria for selection of Technical Member (State) was conveyed to the State of Goa vide letter F. No. A 50050/102/2023-CESTAT-DOR dated 08.05.2024.
2. In this regard, it may be noted that the search for the Technical Member (State) of the respective State Benches is to be carried out by the concerned State. The eligibility for the Technical Member (State) is governed by section 110(1)(d) of the CGST Act which states as follows:-
A person shall not be qualified for appointment as-
a Technical Member (State), unless he is or has been an officer of the State Government or an officer of All India Service, not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank, not lower than that of the First Appellate Authority, as may be notified by the concerned State Government, on the recommendations of the Council and has completed twenty-five years of service in Group A, or equivalent, with at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government:
Provided that the State Government may, on the recommendations of the Council, by notification, relax the requirement of completion of twenty-five years of service in Group A, or equivalent, in respect of officers of such State where no person has completed twenty-five years of service in Group A, or equivalent, but has completed twenty-five years of service in the Government, subject to such conditions, and till such period, as may be specified in the notification.
3. In this regard, a proposal was earlier received from Government of Goa which was duly brought before the GST Council for recommendations and as per the recommendations, the following approval was conveyed:
"Proposal of the State of Goa for notifying an officer of the Commercial Tax Department of Goa, who has completed at least twenty-five years of service in the Government, as Gazetted Officer, to be eligible for the appointment as Technical Member (State) in the State Bench".
4. Thereafter, another request was received from Government of Goa to relax the eligibility criteria of Technical Member (State) by replacing “an officer of the Commercial Tax Department of Goa" with “an officer of the Government of Goa”. The following rationale has been provided by the State:
i. the highest-level post under the Commercial Tax Department in State of Goa is of State Tax officer (STO) (Group 'B' Gazetted) and all other higher posts i.e. Deputy Commissioner of State Tax (Level 10, Gr. A Gazetted) and Additional Commissioner of State Tax (Level 11, Gr. A Gazetted) are filled from the Goa Civil Services. The post of Commissioner of State Tax is filled from IAS Cadre.
ii. Hence, any State Tax officer (STO), after rendering service as an STO for 5 years may get promotion to GCS holding the post of Junior Scale Officer (JSO) of GCS, even if he is posted as Deputy Commissioner of State Tax in this department, he belongs to Goa Civil service (GCS) and not Commercial Tax Department as such.
iii. Therefore, the relaxation for eligibility criteria of 25 years in Group 'A' was proposed to consider as 25 years of service in Group 'A' and Group B' under the Government of Goa and not in Commercial Tax Department of Government of Goa.
iv. However, the approval for the proposal of relaxation is received for notifying an "officer of the Commercial tax Department of Goa, who has completed at least of 25 years of service in the Government as Gazetted Officer" to be eligible for the appointment as Technical Member (State) in the State Bench.
v. It may therefore not be possible to find any Officer of Commercial Tax Department with 25 years’ service as Gazetted Officer, because after promotion from the post of STO, the Officer goes into Goa Civil Service under Department of Personnel, Govt. of Goa. Similarly, it may not happen that after induction into GCS, the Officer may be posted under Commercial Tax Department continuously for such a long period.
5. It may be seen from section 110(1)(d) of the CGST Act that for an officer of the State Government to be nominated, the law provides that the officer should have "at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government.".
6. Accordingly, approval of GST Council is sought for the proposal of Government of Goa for replacing the wordings "an officer of the Commercial Tax Department of Goa" with "an officer of the Government of Goa". Accordingly, the revised wordings of the approval would stand amended as below:
"Proposal of the State of Goa for notifying an officer of the Government Commercial Tax Department of Goa, who has completed at least twenty-five years of service in the Government, as Gazetted Officer, to be eligible for the appointment as Technical Member (State) in the State Bench".
7. The approval would be subject to other terms and conditions as mentioned in section 110(1)(d) of the CGST Act.
*****
Agenda Item 7(e): Relaxation in eligibility conditions for appointment of Technical Member (State) in GSTAT for the State of Jharkhand.
In context of the GST Appellate Tribunal, it may be noted that where there are in-sufficient number of officers eligible for the post of the Technical Member (State) in the State, the criteria may be relaxed in accordance with the provisions of section 110(1)(d) and proviso thereof of the CGST Act, 2017. In this context, representation has been received from State of Jharkhand seeking such relaxation. Request letter of Jharkhand attached as Annexure – 1.
2. Section 110(1)(d), which provides for relaxation in the qualification for Technical Member (State), is as follows:
110. (1) A person shall not be qualified for appointment as—
a.…
(d) a Technical Member (State), unless he is or has been an officer of the State Government or an officer of All India Service, not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank, not lower than that of the First Appellate Authority, as may be notified by the concerned State Government, on the recommendations of the Council and has completed twenty-five years of service in Group A, or equivalent, with at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government:
Provided that the State Government may, on the recommendations of the Council, by notification, relax the requirement of completion of twenty-five years of service in Group A, or equivalent, in respect of officers of such State where no person has completed twenty-five years of service in Group A, or equivalent, but has completed twenty-five years of service in the Government, subject to such conditions, and till such period, as may be
specified in the notification.
3. Accordingly, Jharkhand state had requested for relaxations in the qualification of Technical Member (State) in respect of the number of years in Government be considered in place of number of years in Group A; and in respect of notifying the Joint Commissioner as the rank of officer eligible for Technical Member State in Jharkhand. State has confirmed that there is no officer currently meeting the present criteria. State has also verbally confirmed that the present first Appellate Authority in the State is of the rank of Joint Commissioner.
4. In light of the above, and as the process of appointment of Members of the GSTAT are to be expedited, approval of GST Implementation Committee was sought on the proposal. The request sought was for a period of ten years, and the details of the same is placed below:
i.To notify an officer of the Commercial Tax Department of Jharkhand, who has completed at least twenty-five years of service in the Government, as Gazetted Officer, to be eligible for the appointment as Technical Member (State); and
ii.To notify the rank of an officer of the State of Jharkhand, not below the rank of “Joint Commissioner of State Tax”, as a minimum qualifying rank of the officer who shall be eligible for Technical Member (State) subject to other conditions of section 110(1)(d) of the CGST Act, 2017.
5. The same was approved by GIC [attached as Annexure – 2], subject to post-facto approval of the GST Council, and was conveyed to the State. Accordingly, the Agenda Note is placed for post-facto approval of the GST Council on Relaxation of eligibility criteria of Technical Member (State) for GST Appellate Tribunal for the State of Jharkhand, as detailed in para 4, earlier provided by the GIC. The said relaxation is applicable for a period of ten years and is subject to the other terms and conditions of section 110(1)(d) of the CGST Act, 2017.
*****
Annexure – 1
Annexure-2
Agenda Item 7(f): Status Report of GoM on restructuring Compensation Cess.
1. GST Council in its 54th GST Council Meeting held on 09.09.2024 in New Delhi recommended to constitute a Group of Ministers (GoM) to make taxation proposal to replace the Compensation Cess after its abolition. Accordingly, a Group of Ministers has been constituted under the chairmanship of Hon’ble Union Minister of State for Finance [OM for constitution of GoM on restructuring of Compensation Cess].
2. The First and second meeting of the GoM have taken place on 16.10.2024 and 12.12.2024 respectively. Deliberations were primarily on the following issues:
i.Recommendation on the treatment of the levy and collection of Cess under the present law for FY 2025-26 and manner of distribution of surplus, if any, at the end March 2026 by which the current levy would lapse.
ii.Recommendation on the future course of action post abolition of Cess (i.e. after 31.03.2026).
3. On the issue of levy and collection of cess for the FY 2025-26, the GoM recommends that the Cess at the present rates should be continued until 31.03.2026. As regards the surplus or excess collection, if any of Cess remaining in the Cess Account at the end of the transition period after meeting the obligations of back to back loan (including interest thereon), the GoM agreed that the same be distributed between the Centre and the States in the ratio of 50:50 as provided under section 10(3) of the GST Compensation to Cess Act, 2017
4. The Ministers felt that more time is required to examine the second issue (i.e) the future course of action post abolition of Cess as it requires analysis of Constitutional, Legal and operational issues of impact on State revenues. Accordingly, GoM decided to seek an extension of time upto June 30, 2025 from the GST Council.
5. Accordingly, the GoM’s recommendation in para 3 above and the proposal in para 4 for extension of tenure of GoM on restructuring Compensation Cess upto 30th June 2025 are placed before the GST Council for approval.
*****
Agenda Item 8: Issues recommended by GSTN.
Agenda Item 8(a): B2C e-Invoicing.
1. In the 54th meeting of the GST Council held on 9th September 2024, the Council had provided in-principle approval for the implementation of B2C e-Invoicing in India on a voluntary basis, for States willing to implement such a project.
2. GSTN is in the advanced stages of developing the proof of concept. Given that B2C e-Invoicing is a large-scale initiative, it is imperative to assess and evaluate the various technology options and implementation methodologies adopted for B2C e-invoicing in other countries in order to learn from such global experience, identify best practices, and integrate these insights into India's B2C e-Invoicing framework.
3. In order to facilitate this evaluation, it is proposed that GSTN conduct a global technology and policy framework evaluation of B2C e-Invoicing implementation in other countries. For this purpose, a few delegations comprising representatives from GSTN, the Department of Revenue, CBIC, and commercial tax departments of States/UTs may visit countries like South Korea, Brazil, Chile, the Russian Federation, Mexico, Saudi Arabia, etc to carry out the evaluation. To maximize knowledge-sharing and insights, it is proposed that each delegation visiting a specific country would include new members.
4. Accordingly, approval of the Council is sought for the above proposal.
***
Agenda Item 8(b): Successful Rollout of IMS.
1. In the 54th meeting of the GST Council, it was informed that the IMS (Invoice Management System) would be rolled out by GSTN as an optional facility. In this regard, GSTN has informed that the functionality has been rolled out for the return period of October, 2024 and is now live on the GST portal.
2. GSTN has made available the following features in the IMS:
i . Actions (Accept/Reject/Pending): Taxpayers can take these actions from October 15, 2024, on records saved in GSTR-1/IFF/1A by the supplier taxpayer until the recipient taxpayer files their corresponding GSTR-3B.
ii. Deemed Accepted: At the time of GSTR-2B generation, a record would be considered "Deemed Accepted" if no action is taken on that record in IMS.
iii. GSTR-2B Generation: Based on actions taken, the first GSTR-2B for the October 2024 period was generated on 14 November 2024.
iv. Recomputing GSTR-2B: Taxpayers can take actions on the draft GSTR-2B and recompute it based on changed actions anytime until filing GSTR-3B.
v. User Adoption: Approximately 5.26 lakh taxpayers have used IMS to take some action on the records uploaded (as of 20 November 2024).
vi. Supplier View: The Supplier View of IMS is available on the UI, allowing suppliers to see the actions taken by their recipients on records/invoices reported in GSTR-1/1A/IFF.
3. The October GSTR-3B has been successfully filed by taxpayers using IMS. GSTN continues to provide support to taxpayers in navigating any IMS-related difficulties. Further, the following enhancements are in the pipeline for IMS and would be rolled out successively:
i. Handling of Credit Notes: Taxpayers would have the option to keep credit notes pending until a specified time. Additionally, for cases where ITC has not been availed or has been permanently reversed, taxpayers would be given the option to not decrease the ITC on accepting the credit note.
ii. Offline Tool: An offline tool would be introduced to handle bulk data
iii. Rejected Section in GSTR-2B: A new section in GSTR-2B would display all rejected records by recipient taxpayers.
iv. Supplier View for GSPs: Extension of Supplier View functionality to GSPs.
4. Proposal before the GST Council
The updated status on the successful rollout of IMS along with the proposed enhancements is submitted for information of the GST Council.
***
Agenda Item 9: Performance Report of Competition Commission of India (CCI), State Level Screening Committee (SLSC), Standing Committee (SC) and DG (Anti-Profiteering) for 2nd Quarter (July-September) of the F.Y 2024-25 for information of the GST Council.
The performance report of Anti-profiteering authorities at various levels for the 2nd Quarter (July to September, 2024) of the Financial Year 2024-25 are as under:
2.1Performance of Competition Commission of India (CCI):
Opening
Balance No. of
Investigation Reports received from DGAP during the quarter Disposal of Cases (During Quarter) Closing
Balance
Total
Disposal during the Quarter No. of cases where Profiteering established No. of cases where Profiteering not established No. of cases referred back to DGAP
Quarter 1st July, 2024 to 30th September, 2024
53 3 10 4 2 4* 46
*2 out of 4 cases which pertain to real estate sector have been sent back to DGAP for re-investigation for re-working the profiteered amount in terms of judgement dated 29.01.2024 of Hon'ble Delhi High Court and remaining 2 cases which pertain to non-real estate sector have been sent back to DGAP for re-investigation on case specific issues.
2.2Performance of DG (Anti-profiteering):
Opening Balance (No. of cases) Receipt Disposal Mode of disposal of cases Closing Balance (No. of cases)
Report to CCI confirming profiteering Report to CCI for closure action
Quarter 1st July, 2024 to 30th September, 2024
141 18 3 0 3 156
2.3Performance report of the Standing Committee on Anti-profiteering:
Opening Balance
(No. of cases) Receipt Disposal Closing Balance
(No. of cases)
Quarter 1st July, 2024 to 30th September, 2024
128 63 97 94
2.4Performance report from the State Level Screening Committee:
Opening
Balance (No. of cases) Receipt Disposal Closing
Balance (No. of cases)
Cases referred
to Standing Committee Cases
Rejected
Quarter 1st July, 2024 to 30th September, 2024
175 70 4 162 79
*Report from the Kerala State Screening has not been received
# The Opening Balance stands revised from 173 to 175 (closing balance of 1st quarter of 2024-25 was 173), as the Karnataka SLSC has now reported 2 cases, which were not reported earlier.
3.During the quarter, CCI has undertaken the following activities/initiatives-
The Quarterly Performance report for the 2nd quarter (July - September) of the F.Y 2024-25 is submitted as under:-
i.The mandate to examine profiteering was vested with Competition Commission of India (CCI) w.e.f. 01.12.2022, as per the Notification No. 23/2022- Central Tax dated 23.11.2022 issued by Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance. The required quorum in the CCI to proceed with the anti-profiteering matters was restored w.e.f. 23.05.2023 with the joining of the Chairperson. Proceedings in anti-profiteering cases had commenced w.e.f. 22.06.2023 and the CCI had passed 54 orders in anti-profiteering cases till 30.09.2024.
ii.W.e.f. 01.10.2024, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has been empowered to examine profiteering as per the Notification No. 18/2024- Central Tax dated 30.09.2024 issued by Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance.
iii.6 Final Orders and 2 Interim Orders have been passed by the CCI during the quarter ending on 30.09.2024. As on 30.09.2024, 46 cases of anti-profiteering were pending with CCI. During the quarter ending on 30.09.2024, 2 cases of real estate sector viz. M/s Lotus Realtech and M/s Royale Urban Space LLP have been sent back to the DGAP for re- investigation for re-working the profiteered amount in terms of judgement dated 29.01.2024 of Hon'ble Delhi High Court.
iv.Six Ordinary meetings of the CCI were held during the quarter ending on 30.09.2024. Therefore, a total of 42 Ordinary meetings were held by the CCI w.e.f. 01.12.2022 till 30.09.2024.
v.1 hearing in a case was accorded by the CCI during the quarter ending on 30.09.2024. In total 44 hearings were given by the CCI w.e.f. 01.12.2022 till 30.09.2024.
vi.W.e.f. 01.12.2022 till 30.09.2024, 149 complaints have been forwarded to the respective Authorities for further necessary action. For the quarter ending on 30.09.2024, out of 11 complaints, 6 complaints relating to profiteering in terms of Section 171 of the CGST Act, 2017 were forwarded to respective Screening Committees/Standing Committee for further action/examination and 5 complaints which related to other GST/Enforcement issues were forwarded to the Jurisdictional State & Central GST Commissioners/Chief Commissioners for necessary action.
4. Accordingly, the Performance Report of Competition Commission of India (CCI), State Level Screening Committee (SLSC), Standing Committee (SC) and DG (Anti-Profiteering) for 2nd Quarter (July-September) of the F.Y 2024- 25 are placed before the GST Council for information.
***
Agenda Item 10: Ad-hoc Exemption Orders issued under section 25 (2) of the Customs Act, 1962 to be placed before the Council for information
In the 26th GST Council meeting held on 10th March, 2018, it was decided that all ad-hoc exemption orders issued with the approval of Hon’ble Finance Minister as per the guidelines contained in Circular No. 09/2014-Customs dated 19th August, 2014, as was the case prior to the implementation of GST, shall be placed before the GST Council for information.
2. The details of the ad-hoc exemption orders issued recently are as follows:
Order No. Date Remarks
AEO No. 6 of 2024 18.10.2024 Request from MEA for ad-hoc exemption from export duty under Section 25 (2) of the Customs Act, 1962 for humanitarian assistance to Zimbabwe, Malawi, Zambia and Namibia in the form of food grains
AEO No. 7 of 2024 27.11.2024 Request for ad-hoc exemption for import of instruments for implementation of pilot project on Glacial Lake Outburst Flood
(GLOF) risk in Sikkim
3. This is placed for the information of GST Council.
Addendum to Agenda Volume-II of the 55th Meeting of the GST Council
Agenda Item 11: Report of Group of Ministers on Life and Health Insurance.
1. The issue of GST on life and health insurance policies was placed before the GST Council in its 54th Meeting held on 09th September 2024 at New Delhi. After detailed deliberations, the GST Council recommended to constitute a Group of Ministers (GoM) to holistically look into the issues pertaining to GST on life insurance and health insurance.
2. A Group of Ministers (GoM) on Life and Health Insurance was constituted in compliance of the recommendation of the GST Council with Sh. Samrat Choudhary, Hon’ble Deputy Chief Minister, Bihar as its Convenor. The other member states of the GoM are Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.
3. The terms of reference for the GoM on Life and Health Insurance were as follows:
i.To examine and review the present tax structure of GST on life and medical insurance; and
ii.To suggest GST rates on
a.health / medical insurance including individual, group, family floater and other medical insurance for various categories like senior citizens, middle class, persons with mental illness, etc;
b.life insurance including term insurance, life insurance with investment plans, whether individual or group; and
c.re-insurance of the above.
4. The GoM held its meeting on the 19th October, 2024 at New Delhi.
5. The GoM undertook a comprehensive examination of the GST framework concerning life and health insurance policies. GoM reviewed the existing tax structure, its financial impact as well as its impact on various demographic groups, including senior citizens.
6. The report of the Group of Ministers on Life and Health Insurance is proposed to be placed before the GST Council.
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GST Council Meeting Category
Category the value
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