53rd GST Council Meeting

Confidential


Agenda for
53rd GST Council Meeting
22nd June, 2024
Volume - I






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Agenda for 53rd GSTCM Volume 1
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GST Council Secretariat New Delhi
5th Floor, Tower-II, Jeevan Bharti Building, New Delhi
13th June, 2024

OFFICE MEMORANDUM
Subject: Notice for the 53rd GST Council Meeting to be held on 22nd June, 2024-reg

The undersigned is directed to refer to the above subject and to convey that the 53rd Meeting
of the GST Council will be held on 22nd June, 2024 at New Delhi. The schedule of the
meeting is as follows:-
Saturday, 22nd June,2024 from 2.00 P.M. onwards
2. In addition, an Officers’ Meeting will be held on 21st June, 2024 at New Delhi as per the
following schedule:
Friday, 21st June, 2024 from 11.30 A.M. onwards

3. The venue of the meeting, agenda items and other details for the 53rd 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
53rd 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
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TABLE OF CONTENTS (VOLUME-I)
Sl. No. Agenda Item Page No.
1. Confirmation of Minutes of 52nd GST Council Meeting held on 07th October,
2023
9-131
2. Deemed ratification by the GST Council of the Notifications, Circulars and
Orders issued by the Central Government and decisions of GST
Implementation Committee for the information of the Council.
132-151
3. Issues recommended by the Law Committee for the consideration of the GST
Council

i) Law amendment proposals to amend the CGST Act, 2017 and IGST Act,
2017:

I Amendment of Section 9 of CGST Act, 2017 regarding non-
applicability of Goods and Services Tax on Extra Neutral Alcohol
(ENA) used for manufacture of alcoholic liquor for human
consumption.
152-153
II Insertion of Section 11A in CGST Act, for granting power not to
recover duties not levied or short-levied as a result of general
practice under GST Acts.
153-154
III Law Amendments in Section 13 and Section 31 of the CGST Act,
2017 regarding time of supply and issuance of invoices in respect
of RCM supplies.
154-157
IV Amendment in Section 16 of IGST Act, 2017 along with
corresponding provisions in Section 54 of CGST Act, 2017, to
curtail refund of IGST in cases where export duty is payable, and
also to rationalise the said provisions.
157-160
V Amendment in section 70 of the CGST Act, to provide clarity
regarding appearance by authorised representative in response to
summons.
160-161
VI Amendment of sub-section (1B) of section 122 of the CGST Act,
2017 with respect to penalty provisions for non-compliant
electronic commerce operators.
161-163
VII Amendment of section 140(7) of CGST Act to provide for
transitional credit in respect of invoices pertaining to services
provided before appointed date and where invoices were received
by ISD before the appointed date.
163-165
ii) Law Amendment regarding time of filing appeal in GST Appellate
Tribunal
166-169
iii) Law Amendment regarding GST Appellate Tribunal 170-173
(a) providing for sunset clause for Anti-Profiteering provisions under the
GST laws and the handling of Anti-Profiteering cases under Section
171 of the Central Goods and Services Act, 2017 by Appellate

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Tribunal.
(b) providing for enabling provision for notifying the scope of cases that
can be heard by the Principal Bench of GSTAT only.

iv) Amendments in Section 73 and Section 74 of CGST Act, 2017 and
insertion of a new Section 74A in CGST Act, to provide for common
time limit for issuance of demand notices and orders irrespective of
whether case involves fraud, suppression, wilful misstatement etc., or
not.
174-190
v) Amendment in section 39 of CGST Act and rule 66 of CGST Rules,
2017 for mandating NIL returns by TDS deductors and waiver of late
fee for late filing of NIL FORMGSTR-7 along with changes in FORM
GSTR 07 for inserting invoice/document wise details of tax deducted
at source
191-196
vi) Relaxation in condition of section 16(4) of the CGST Act with respect
to cases where returns have been filed after revocation for initial years
of implementation of GST.
197-206
vii) Insertion of Section 128A in CGST Act, to provide for conditional
waiver of interest or penalty or both relating to demands raised under
Section 73, for FY 2017-18 to FY2019-20.
207-210
viii) Reduction of Government Litigation – fixing monetary limits for filing
appeals or applications by the Department before GSTAT, High Courts
and Supreme Court
211-222
ix) Insertion of new forms FORM GSTR-1A for the amendment and
declaring additional details to FORM GSTR-01, for enabling locking
of FORM GSTR-3B based on FORM GSTR-01.
223-274
x) Issue of liability of payment of interest under Section 50 of CGST Act
in case of delayed payment of tax, even though the credit is available in
Electronic Cash Ledger (ECL).
275-279
xi) Reduction in rate of TCS to be collected by the ECOs for supplies
being made through them.
280-282
xii) Clarifications on various issues pertaining to special procedure for the
manufacturers of the specified commodities, like pan masala, tobacco
etc.
283-287
xiii) Clarification on the provisions of clause (ca) of Section 10(1) of the
Integrated Goods and Service Tax Act, 2017 relating to place of supply
of goods to unregistered persons.
288-292
xiv) Providing a mechanism for adjustment of payments made through
FORM DRC-03, in respect of a demand against pre-deposit as well as
for adjustment of liability in Electronic Liability Register (Amendment
293-309
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in Rule 142 of CGST Rules, 2017 along with clarification circular).
xv) Clarification on valuation of supply of import of services by a related
person where recipient is eligible to full input tax credit.
310-316
xvi) Clarification regarding applicability of provisions of Section 16 (4) of
CGST Act,2017, in respect of invoices issued by the recipient under
RCM.
317-322
xvii) Clarification in case of taxability of corporate guarantee provided
between related persons after insertion of Rule 28(2) of CGST Rules,
2017.
323-333
xviii) Clarification on mechanism for providing evidence of compliance of
conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 in respect of
post-sale discounts by the suppliers.
334-340
xix) Court matter regarding extending amnesty scheme for filing of appeals
in respect of cases under Section 129 and 130 of CGST Act.
341-342
xx) Amendment in Rules 110 and 111 of the CGST Rules, 2017 pertaining
to filing and processing of appeals in GST Appellate Tribunal.
343-346
xxi) Clarification on taxability of re- imbursement of securities/shares as
ESOP/ESPP/RSU provided by a company to its employees.
347-354
xxii) Clarification on requirement of reversal of ITC in respect of balance of
taxable premium in cases of Life Insurance services after applying
valuation rule.
355-364
xxiii) Clarification on taxability of wreck and salvage values in motor
insurance claims.
365-371
xxiv) Clarification in respect of Extended Warranty provided by
Manufacturers to the end customers in view of Circular No.
195/07/2023-GST dated 17.07.2023
372-382
xxv) Clarification regarding ITC entitlement on repair expenses incurred in
case of reimbursement mode of claim settlement.
383-391
xxvi) Clarification on taxability of loans granted between group companies. 392-399
xxvii) Clarification regarding availability of Input Tax Credit (ITC) on ducts
and manholes used in the network of Optical Fibre Cables (OFCs).
400-409
xxviii) Clarification on the place of supply applicable for custodial services
provided by banks to Foreign Portfolio Investors.
410-419
xxix) Clarification on time of supply on Annuity Payments under Hybrid
Annuity Mode Projects (HAM) of NHAI.
420-430
xxx) Refund of additional Integrated Tax (IGST) paid on account of
upward revision in price of the goods subsequent to export of such
431-439
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goods.
xxxi) Implementation of functionality for online filing of refund application
by Canteen Stores Department (CSD) in GST-RFD 10A .
440-446
xxxii) Procedure for payment of IGST by SEZ unit located in Noida SEZ on
DTA clearances.
447-453
xxxiii) Time of supply in respect of supply of allotment of Spectrum to
Telecom companies in cases where an option is given to the Telecom
Companies for payment of licence fee and Spectrum usage charges in
instalments in addition to an option of upfront payment.
454-463
xxxiv) Creation of unique identifiers for unregistered persons opting to
generate e-waybill
464-466
xxxv) Alignment of rule 96A of CGST Rules, 2017 with the provision of
FEMA Act, 1999
467-469
xxxvi) Change in due date for filing of return in FORM GSTR 4 for
composition taxpayers from 30th April to 30th June.
470-471
xxxvii) Amendment in FORM GSTR -8 to capture place of supply 472-475
xxxviii) Amendment in GST Rules and FORM GSTR-1 to reduce the current
threshold of invoice value of Rs. 2.5 lakhs for inter-state B2C supplies
to Rs. 1 lakh
476-477
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Discussion on Agenda Items

Agenda Item 1: Confirmation of Minutes of 52nd GST Council Meeting held on 07th
October, 2023

The 52nd meeting of the GST Council was held on 7th October, 2023 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 52nd meeting of the GST
Council:
TABLE OF CONTENTS
Sl. No. Agenda Item
1. Confirmation of Minutes of GST Council Meetings:
i. 50th GST Council Meeting held on 11th July, 2023
ii. 51st GST Council Meeting held on 2nd August, 2023
2. Ratification of the Notifications, Circulars and Orders issued by the GST Council 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. Alignment of provisions of the CGST Act, 2017 with the provisions of the
Tribunal Reforms Act, 2021 in respect of Appointment of President and Member
of the proposed GST Appellate Tribunals.
ii. Seeking clarity on various issues
a. Regarding taxability of personal guarantee offered by directors to the bank against
the credit limits/loans being sanctioned to the company.
b. Regarding taxability of corporate guarantee provided for related persons
including corporate guarantee provided by holding company to its subsidiary
company.
iii. Providing a special procedure for condonation of delay in filing of appeals against
demand orders passed until 31st March, 2023.
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iv. Law amendment w.r.t. ISD as recommended by the GST Council in its 50th
meeting
v. Clarification regarding restoration of provisionally attached property
vi. Clarification on various issues related to Place of Supply
vii. Agenda Note for issuance of clarification relating to export of services-
condition (iv) of the Section 2 (6) of the IGST Act 2017
viii. Amendment in Central Goods and Services Tax Rules, 2017 and GST
REG/PCT – FORM(s)
a. Incorporation of ‘One Person Company’ in FORM GST REG 01 i.e.
Application for Registration
b. Application for Enrolment as Goods and Services Tax Practitioner-
Amendment in FORM GST PCT-01
c. Application for cancellation of TCS and TDS registration- Enhancement
in Form GST REG-08 format for having options for cancellation of
registration against the request made by the
TDS and TCS registered persons
d. Amendment in rule 142 (3) of CGST Rules with respect to FORM GST
DRC-05
e. Amendment in FORM GSTR-8 to include late fee
ix. Clarification on the scope of the refund on account of inverted duty structure
in respect of supplies of certain construction services
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 – Annexure-I
b) Issues where no change has been proposed by the Fitment
Committee in relation to goods – Annexure-II
c) Issues deferred by the Fitment Committee for further examination in relation
to goods – Annexure-III
d) Agenda on Extra-Neutral Alcohol (ENA) (Agenda 4 (Part-II) of Agenda
Volume-II)
d) Recommendations made by the Fitment Committee for making changes in
GST rates or for issuing clarifications in relation to services – Annexure-
IV
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e) Issues where no change has been proposed by the Fitment Committee
in relation to services – Annexure-V (Including Agenda 4 (Part-II) of
Agenda Volume-II)
f) Issues deferred by the Fitment Committee for further examination in relation
to services – Annexure-VI (Including Agenda 4 (Part-II) of Agenda
Volume-II)
5. Performance Report of Competition Commission of India (CCI) for 1st quarter of
the F.Y 2023-24 along with Performance Reports of State Level Screening
Committee (SLSC), Standing Committee (SC) and Directorate General of Anti-
Profiteering (DGAP).
6. Ad-hoc Exemptions Order(s) issued under Section 25(2) of
Customs Act, 1962 to be placed before the GST Council for information
7. Review of revenue position under Goods and Services Tax.
8. Any other agenda with the permission of the Chair:

Table Agenda:- Exemption from 5% IGST levy for foreign flag foreign going
vessels being operated by an entity not registered under GST in India when it
converts to coastal run.
9. Agenda Item 9 (Addendum to Agenda Volume-II): Agenda Note for notifying
supplies and class of registered person eligible for refund under IGST route.
10. General discussion with the permission of the Chair.

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 52nd meeting of the GST
Council. He welcomed incoming Chairman of the Central Board of Indirect Taxes and Customs
(CBIC), Sh. Sanjay Kumar Agarwal to his first GST Council meeting as Chairman, CBIC.
1.4 The Secretary stated that the important agendas of the day pertained to setting up of GST
Tribunals and pending issues like taxability of Extra Neutral alcohol for deliberations besides other
Law Committee and Fitment Committee agendas and other routine agenda items.
1.5 The Secretary requested the States who were yet to pass the amendments in SGST/UTGST
Acts corresponding to amendments in the CGST Act, 2017, IGST Act, 2017 pertaining to Casinos,
Online Gaming and Horse racing to do so on priority as otherwise it would lead to legal
difficulties in revenue sharing with these States. He informed that this matter was discussed in the
Officers’ Meeting also a day before.
1.6 The Secretary sought the permission of the Chair to begin deliberations on each agenda
item and invited the Joint Secretary, GST Council Secretariat to take the Council through the
agendas.
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2. Agenda item 1: Confirmation of the Minutes of 50th meeting of the GST Council held on
11th July, 2023 and 51st meeting of the GST Council held on 2nd August, 2023

2.1 The Joint Secretary, GST Council Secretariat informed the Council that the State of
Kerala had requested for changes in in para 6.19 and para 12.12 of the Agenda Item 5 (Second
Report of the Group of Ministers (GoM) on Casinos, Race Courses and Online Gaming) of the
draft Minutes of the 50th meeting of the GST Council as follows;
2.2 The State of Kerala had requested that para 6.19 and 12.12 of the minutes may be
redrafted as below:

6.19: The Hon’ble Member from Kerala raised concerns about the impact of taxing on the basis
of GGR mechanism on lotteries as it could lead to litigation. He stated that this approach may
affect the taxation of other actionable claims.
12.12 It may be noted that the proposal of Kerala is to set up 3 State Benches with locations at
Thiruvananthapuram, Ernakulam and Kozhikode. In the initial phase, as suggested in this
meeting, due to lesser pendency of cases, two benches even with half the members may be made
functional at Thiruvananthapuram and Ernakulam. Since the other areas in the state are quite
far from these two locations, there may be provisions for these benches to conduct sittings in
other locations such as Kozhikode also to hear the cases belonging to those locations.
2.3 The Council approved the changes suggested by the State of Kerala in para 6.19 and
para 12.12 of the minutes of the 50th meeting of the GST Council.

Decision: The Council adopted the Minutes of the 50th meeting of the GST Council held on
11th July, 2023 and 51st meeting of the GST Council held on 2nd August, 2023 with changes as
detailed in para 2.2 above.

3. Agenda Item 2: Ratification by the GST Council of the Notifications, Circulars and
Orders issued and decisions of GST Implementation Committee for the information of the
Council

3.1 The Joint Secretary, GST Council Secretariat took up the next agenda pertaining to the
Ratification of the Notifications, Circulars and Orders issued by the GST Council and decisions
of GST Implementation Committee for the information of the Council (Page 139-151 of the
Volume-I). She stated that this agenda was discussed in the officers meeting held yesterday and
there was consensus on the same. She requested the Council to ratify the Notifications, Circulars
and Orders issued and take note of the decisions of the GST Implementation Committee (GIC).

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Decision: The Council ratified the Notifications, Circulars and Orders issued and took note of
the decisions of GST Implementation Committee.

4. Agenda Item 3: Issues recommended by the Law Committee for the consideration of the
GST Council

4.1 The Secretary took up the next agenda for the consideration of the GST Council. He
informed that these agendas were discussed in the Officers’ meeting held on 6th of October 2023
and there was an agreement among the officers on most of the issues. The Principal
Commissioner, GST Policy Wing made the detailed presentation (attached as Annexure-3)
giving an over view of the recommendations made by the Law Committee, as well as the gist of
the discussions held in the Officers’ meeting.
Agenda Item 3(i): Alignment of provisions of the CGST Act, 2017 with the provisions of the
Tribunal Reforms Act, 2021 in respect of Appointment of President and Member of the
proposed GST Appellate Tribunals.

4.2 The Pr. Commissioner, GST Policy Wing, stated that vide the Finance Act, 2023,
amendments to section 109 and 110 of the CGST Act, 2017 were carried out in respect of GST
Appellate Tribunal (GSTAT) and the same were notified vide Notification No. 28/2023–Central
Tax dated 31st July, 2023. Subsequently, a proposal was sent by the Department of Revenue to the
Hon’ble Chief Justice of India with a request to Chair or to nominate a Judge of the Supreme Court
to Chair the Search-cum-Selection Committee (ScSC) to make recommendations for appointment
of Judicial Members and Technical Member (Centre) of GSTAT and to nominate a retired Judge
of Supreme Court or a retired Chief Justice of High Court as a Member of ScSC. In response, the
Registrar of Hon’ble Supreme Court of India observed that certain provisions of the GST Appellate
Tribunal regarding maximum age limit for the posts of President and Members and the provision
relating to eligibility of an Advocate with a standing of 10 years at the Bar for appointment as a
Judicial Member need to be aligned with the Tribunal Reforms Act, 2021. Accordingly, the issue
of alignment of the provisions of GST Appellate Tribunal with the Tribunal Reforms Act &
Tribunal (Condition of Service) Rules, 2021, was placed before the Law Committee. Law
Committee approved the following amendments to section 110 of the CGST Act, 2017:
110. President and Members of Appellate Tribunal, their qualification, appointment,
conditions of service, etc.
(1) A person shall not be qualified for appointment as—
(a)…
(b)…..
(i)…..
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(ii) …..
(iii) has been an advocate for ten years with substantial experience in litigation
under indirect tax laws in the Appellate Tribunal, Central Excise and Service
Tax Tribunal, State VAT Tribunals, by whatever name called, High Court or
Supreme Court;
(c) …….
(d)…
Provided….
Provided that a person who has not completed the age of fifty years shall not be
eligible for appointment as the President or the Member.
... ... ...

(9) Notwithstanding anything contained in any judgment, order, or decree of any court
or any law for the time being in force, the President of the Appellate Tribunal shall hold
office for a term of four years from the date on which he enters upon his office, or until
he attains the age of sixty seven seventy years, whichever is earlier and shall be eligible
for re-appointment for a period not exceeding two year.

(10) Notwithstanding anything contained in any judgment, order, or decree of any court
or any law for the time being in force, the Judicial Member, Technical Member (Centre) or
Technical Member (State) of the Appellate Tribunal shall hold office for a term of four
years from the date on which he enters upon his office, or until he attains the age of sixty
five sixty-seven years, whichever is earlier and shall be eligible for re-appointment for a
period not exceeding two years.

4.3 The Pr. Commissioner, GST Policy Wing, further stated that the issue was discussed in
officers’ meeting and agreed to. It was also noted in the Officers’ meeting that there would not be a
need for any amendment in SGST Acts.
4.4 The Hon’ble Member from Delhi agreed to the change in age limit for the posts of
President and Members. She enquired about having advocates as Members in GSTAT as earlier it
was proposed to have only Judges and not advocates.
4.5 The Pr. Commissioner, GST Policy Wing clarified that Advocates will be eligible for
appointment as Judicial Members only and not as Technical Members in GSTAT to align it with
other Tribunals as pointed out by the Chief Justice of Hon’ble Supreme Court.
4.6 The Hon’ble Member from Bihar mentioned that even though they have reservations
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about having advocates with 10 years of experience as Member, GSTAT, considering the
number of pending cases, and the need to establish the Tribunal without delay, they support the
proposal.
4.7 The Hon’ble Member from West Bengal supported the proposal pointing out that an
Advocate with 10 years of experience can even become Judge of the High Court and so there should
be no problem in selecting such Advocates as Judicial Members of the Tribunal.
4.8 The Hon’ble Member from Gujarat suggested that all processes and proceeding in the
GST Tribunal should be made online and portal-based including the Tribunal’s hearings. These
measures will simplify and expedite the process and will increase the reach of the Tribunal.
4.9 The Hon’ble Member from Tamil Nadu stated that though they agreed with the extension
of age limit of the President and Members, however, the Hon’ble Madras High Court has considered
exclusion of lawyers for consideration as members of GST Appellate Tribunal is not ultra vires and
the issue is before the Supreme Court, so it may be considered by the Council after the final verdict of
the Hon’ble Supreme Court.
4.10 The Secretary informed that as per the decision of the Council, a letter was written to the
Hon’ble Supreme Court to nominate a Chairperson and a Member for the ScSC for selecting the
Technical and Judicial Members. In response to the letter, Office of the Chief Justice of India
pointed out that the present law for GSTAT is not aligned with the Tribunal Reforms Act, 2021.
Due to this, it could be subject to challenge and the Council may reconsider the said issues.
Therefore, the issue was brought before the Council.
4.11 The Hon’ble Chairperson stated that a letter had been received from Hon’ble
Supreme Court with regard to issue of selecting Advocates as Members of the GSTAT. However, the
Council may in future review its decision based on the judgement which would be passed by the
Supreme Court. She also welcomed the suggestion of Gujarat to make the entire process online and
portal-based.
Decision: The Council agreed with the said recommendations of the Law Committee
alongwith the proposal to make the processes of Tribunal online and portal-based.

Agenda Item 3(ii): Seeking clarity on various issues:

A . Regarding taxability of personal guarantee offered by directors to the bank against the
credit limits/loans being sanctioned to the company:

4.12 The Pr. Commissioner, GST Policy Wing stated that the services that are provided by the
director to a company by way of providing personal guarantee to banks/ financial institutions in
order to secure credit facilities even without any consideration, will fall under the category of
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supply of services. Therefore, the same was taxable under GST. However, as per the mandate of
RBI , as per Para 2.2.9 of RBI Master Circular RBI/2021-22/121 dated 9th November, 2021
regarding guidelines relating to obtaining of personal guarantees of promoters, directors, other
managerial personnel, and shareholders of borrowing concerns, no consideration can be charged by
the director from the company for providing the bank guarantee for the purpose of sanctioning of
credit facilities to the said company and therefore, no transaction value can be attributed to the said
service being provided by the Director.

4.13 Accordingly, it appears that when no consideration is paid by the company to the
director in any form, directly or indirectly, for providing guarantee to the bank/ financial
institutes on their behalf, as per mandate of RBI, the open market value of the said transaction/
supply may be treated as zero. In such a scenario, the taxable value of the said supply as per
section 15 of the CGST Act, 2017 read with rule 28 of the CGST Rules, 2017, may be treated as
zero, and no tax may be payable on such supply of service by the director to the company. There
may, however, be cases where the director, who had provided the guarantee, is no longer connected
with the management but continuance of his guarantee is considered essential because the new
management's guarantee is either not available or is found inadequate or there may be other
exceptional cases where the promoters, existing directors, other managerial personnel, and
shareholders of borrowing concerns are paid remuneration/ consideration in any manner, directly
or indirectly. In such cases, as per the RBI guidelines provided in Para 2.2.9 (c) of RBI’s Circular
No. RBI/2021-22/121 dated 9th November, 2021, remuneration can be paid to such directors/
guarantors for providing the bank guarantee.
4.14 In all these cases, the taxable value of such supply of service may be the remuneration/
consideration provided to such a person/ guarantor by the company, directly or indirectly.
4.15 He stated that the Law Committee deliberated on the issue and recommended issuing
a circular to clarify the same as above.

B. Regarding taxability of corporate guarantee provided for related persons including
corporate guarantee provided by holding company to its subsidiary company.

4.16 The Pr. Commissioner, GST Policy Wing stated that providing corporate guarantee
between the related companies, including between ‘holding company’ and ‘subsidiary company’,
even without any monetary consideration, in the course of furtherance of business, is taxable supply
as supply of services provided between related persons, as per Schedule I of the CGST Act 2017.
In such cases of supply of services between related persons, the taxable value of the supply has to be
determined as per Rule 28 of the CGST Rules, 2017 which is mainly based on the open market
value of such supply or as per value of services of like kind and quality or as per Rule 30 or 31 of
CGST Rules, 2017. Field formations as well as the taxpayers are finding it difficult to arrive at the
open market value for such supply of services under Rule 28 of CGST Rules, 2017 as corporate
guarantees, unlike bank guarantees, are specific and peculiar to a particular corporate group or
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company and therefore external third-party comparisons may not be available or relatable. While in
cases, where the recipient is eligible for full input tax credit, as per the second proviso to the rule 28
of CGST Rules, 2017, the value declared in the invoice, if any, shall be deemed to be the open
market value of the said supply of services, however, in cases, where the recipient is not eligible for
full input tax credit, then there was difficulty in determining the open market value.
4.17 The matter was deliberated by the Law Committee and the Law Committee
recommended to provide for specific valuation rule for such supply of services by inserting
following sub-rule (2) in Rule 28 of CGST Rules, 2017:

28. Value of supply of goods or services or both between distinct or related persons, other than
through an agent. -
... ... ...
(2) Notwithstanding anything contained in sub-rule (1), the value of supply of services by a
supplier to a recipient who is a related person, by way of providing corporate guarantee to any
banking company or financial institution on behalf of the said recipient, shall be deemed to be
one per cent of the amount of such guarantee offered, or the actual consideration, whichever is
higher.

4.18 The Law Committee also recommended to clarify the applicability of the proposed sub-
rule (2) of the rule 28 of CGST Rules, 2017 vide a circular.
Decision: The Council agreed with the said recommendations of the Law Committee, along
with draft Circular
Agenda Item 3(iii): Providing a special procedure for condonation of delay in filing of appeals
against demand orders passed until 31st March, 2023.
4.19 The Pr. Commissioner, GST Policy Wing stated during the initial years of
implementation of GST, a number of appeals against demand orders could not be filed within the
specified time period i.e., within the limitation period of three months under Section 107(1) of the
CGST Act, 2017 and the permissible delay condonation period of one month u/s Section 107(4) of
the CGST Act, 2017 due to various reasons. The law prescribes the common portal as the
valid mode of service of notices and orders and no physical service of these notice/orders was made
mandatory. In many cases, the common portal was not accessed by the taxpayers and hence
taxpayers were not aware of the notices/ orders issued to them through the common portal. In many
cases, the email ID or mobile numbers used belonged to CAs or tax practitioners. It had also
resulted in losing track of orders/notices served on common portal/email. Many of the taxpayers
came to know about demand orders only upon initiation of recovery proceedings under section 79 of
the CGST Act, 2017 i.e., after lapse of time prescribed for filing of appeals. Many of these appeals
filed beyond the specified time period are either pending with the appellate authorities or were
rejected earlier for non-adherence to time period specified under Section 107(1) of the CGST Act,
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2017. At the same time, the recovery books of the authorities are bulging without sufficient
recovery. As the appeals are likely to be rejected even if they are filed, in view of limited power of
the appellate authority to condone any delays, the pre-deposit amount is also not being realized in
the books of the government. If such appeals are allowed by condoning the delay, then a large
number of such taxpayers are likely to come forward and pay the pre-deposit amount. It is also to be
mentioned that due to the non-constitution of GST Appellate Tribunals, the only remedy available to
the taxpayers was approaching the Hon’ble High Courts, which might not be always possible for
small and medium taxpayers. Law Committee recommended providing a special procedure under
section 148 of CGST Act, for taxable persons to file appeal till 31st December 20203, who could
not file an appeal under section 107 of the said Act against the order passed on or before the 31st day
of March, 2023 by the proper officer under section 73 or 74 of the said Act and the taxable persons
whose appeal against the said order was rejected solely on the grounds that the said appeal was not
filed within the time period specified in sub-section (1) of section 107, subject to the condition of
payment of an amount of pre-deposit of 12.5% of the tax under dispute by the said person, out of
which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash
Ledger. He also informed that this was agreed to in the Officers’ meeting held on 6th October 2023,
however, it was recommended in the officers’ meeting that time for filing may be kept as 31st
January 2024, instead of 31st December 2023, in the said special procedure for providing more
time to the taxpayers.

4.20 The Hon’ble Member from Uttar Pradesh expressed his agreement with the proposal.
4.21 The Hon’ble Member from Tamil Nadu agreed that the proposal is a welfare measure
towards the traders but also raised his concern that it will reopen the cases of the past six
years involving arrears. He also informed that Tamil Nadu has taken various measures for
collecting GST arrears and if amnesty is given, it will retard their collection drive. He further
suggested that the amnesty should be given in such a way that interests of revenue are properly
balanced with interests of taxpayers and for that pre-deposit may be set at 20%.
4.22 The Hon’ble Member from Maharashtra supported the recommendation of the Law
Committee stating that Maharashtra has more than 13,900 assessment orders against which recovery
is due. This measure will give an opportunity to taxpayers to file appeal while helping in recovery of
arrears through pre-deposit.
4.23 The Hon’ble Member from Goa stated that considering the various technical difficulties
faced by taxpayers during initial period of GST, one-time amnesty of filing of appeal by
condonation of delay for order passed till 31st March, 2023 may be given till 31st March, 2024. The
measure will not result in loss of revenue as correct demand will be assessed after the appeal is
heard and decided by the appellate authority on merits.
4.24 The Secretary clarified that the amnesty given is one-time measure and moreover, the
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taxpayers have to pay an additional amount of 2.5% of the disputed amount as pre-deposit in cash.
He further clarified that the time period of condonation of delay for filing appeal of orders passed
upto 31st March, 2023 in respect of cases pertaining to 2017-18 may seem long but many States
have passed the adjudication orders as late as July 2022 or December 2022 on account of Covid.
Decision: The Council agreed with the said recommendations of the Law Committee, as
modified as per discussions in Officers’ meeting, along with draft Notification.
Agenda Item 3(iv): Law amendment w.r.t. ISD as recommended by the GST Council in its
50th meeting.

4.25 The Pr. Commissioner, GST Policy Wing, stated that the GST Council in its 50th meeting
recommended that ISD procedure as laid down in Section 20 of Central Goods and Services Tax
Act, 2017 read with rule 39 of Central Goods and Services Tax Rules, 2017 may be made mandatory
prospectively for distribution of ITC in respect of input services procured by Head Office (HO) from
a third party but attributable to both HO and Branch Office (BO) or exclusively to one or more BOs.
Further, ITC on account of input services received from a third party, where such input services are
liable to tax on reverse charge basis, should also be required to be distributed through ISD route.
Further, the Council authorized the Law Committee to formulate the requisite law amendments. The
Council also recommended that the manner of distribution of ISD credit as provided in section 20
of CGST Act 2017 does not require amendment at present.
4.26 Accordingly, the Law Committee recommended thefollowing amendment in clause (61) of
section 2 of the CGST Act, 2017 i.e. definition of ISD:
‘(61) “Input Service Distributor” means an office of the supplier of goods or services or both which
receives tax invoices towards the receipt of input services, including invoices in respect of services
liable to tax under sub-sections (3) or (4) of Section 9, for or on behalf of a distinct person or
distinct persons, as specified in section 25 and who is liable to distribute the input tax credit in
respect of such invoices in terms of section 20.
4.27 Further, Law Committee recommended that section 20 of CGST Act 2017 may be
substituted to explicitly mandate distribution of the common credit including with credit pertaining to
common input services which are liable to tax on reverse charge basis, as under:
“20.(1) Any office of the supplier of goods or services or both which receives tax invoices towards
the receipt of input services, including invoices in respect of services liable to tax under sub-
sections (3) or (4) of Section 9, for or on behalf of a distinct person or distinct persons as specified
in section 25, shall be required to be registered as Input Service Distributor under clause (viii) of
section 24 of this Act and shall distribute the input tax credit in respect of such invoices.
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(2) The Input Service Distributor shall distribute the credit of central tax or integrated tax
charged on invoices received by him, including the credit of central or integrated tax in respect of
services subject to levy of tax under sub-section (3) or (4) of Section 9 paid by a distinct person,
registered in the same State as the said Input Service Distributor, in such manner, within such time
and subject to such restrictions and conditions as may be prescribed.
(3) The credit of central tax shall be distributed as central tax or integrated tax and integrated tax
as integrated tax or central tax, by way of issue of a document containing the amount of input tax
credit being distributed in such manner as may be prescribed.
Pari-materia amendments would also be required in theSGST Act.

4.28 In view of the aforesaid amendment in Section 20 of CGST Act 2017, the Law
Committee also recommended that the methodology for distribution of credit may be incorporated in
rule 39 of the CGST Rules 2017 as follow:
39. Procedure for distribution of input tax credit by Input Service Distributor-
1…………..
a. the input tax credit available for distribution in a month shall be distributed
in the same month and the details thereof shall be furnished in FORM
GSTR-6 in accordance with the provisions of Chapter VIII of these rules;
b. the amount of the credit distributed shall not exceed the amount of credit
available for distribution;
(c) the credit of tax paid on input services attributable to a recipient
of credit shall be distributed only to that recipient;
(d) the credit of tax paid on input services attributable to more than
one recipient of credit shall be distributed amongst such recipients to whom
the input service is attributable and such distribution shall be pro rata on the
basis of the turnover in a State or turnover in a Union territory of such
recipient, during the relevant period, to the aggregate of the turnover of all
such recipients to whom such input service is attributable and which are
operational in the current year, during the said relevant period;
(e) the credit of tax paid on input services attributable to all recipients
of credit shall be distributed amongst such recipients and such distribution
shall be pro rata on the basis of the turnover in a State or turnover in a
Union territory of such recipient, during the relevant period, to the aggregate
of the turnover of all recipients and which are operational in the current
year, during the said relevant period;
(f) the input tax credit that is required to be distributed in accordance
with the provisions of clause (d) and (e) to one of the recipients "R1",
whether registered or not, from amongst the total of all the recipients to
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whom input tax credit is attributable, including the recipient(s) who are
engaged in making exempt supply, or are otherwise not registered for any
reason, shall be the amount, "C1", to be calculated by applying the following
formula -
C 1 = (t 1 / T) x C
where,
"C" is the amount of credit to be distributed,
"t1 " is the turnover, as referred to in clause (d) and (e), of
person R1 during the relevant period, and

"T" is the aggregate of the turnover, during the relevant period, of all
recipients to whom the input service is attributable in accordance with
the provisions of clause (d) and (e);
(g) ) the Input Service Distributor shall, in accordance with the
provisions of clause (d) and (e), separately distribute the amount of
ineligible input tax credit (ineligible under the provisions of sub-section
(5) of section 17 or otherwise) and the amount of eligible input tax credit;
(h) the input tax credit on account of central tax, State tax, Union territory
tax and integrated tax shall be distributed separately in accordance with the
provisions of clause (d) and (e);
(i) the input tax credit on account of integrated tax shall be distributed as
input tax credit of integrated tax to every recipient;

(j) the input tax credit on account of central tax and State tax or Union
territory tax shall-


(i) in respect of a recipient located in the same State or Union territory in
which the Input Service Distributor is located, be distributed as input tax
credit of central tax and State tax or Union territory tax respectively;

(ii) in respect of a recipient located in a State or Union territory other than
that of the Input Service Distributor, be distributed as integrated tax and the
amount to be so distributed shall be equal to the aggregate of the amount of
input tax credit of central tax and State tax or Union territory tax that qualifies
for distribution to such recipient as referred to in clause (d) and (e);
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(k) the Input Service Distributor shall issue an Input Service Distributor invoice, as
prescribed in sub-rule (1) of rule 54, clearly indicating in such invoice that it is
issued only for distribution of input tax credit;

(l) the Input Service Distributor shall issue an Input Service Distributor credit note,
as prescribed in sub-rule (1) of rule 54, for reduction of credit in case the input
tax credit already distributed gets reduced for any reason;

(m) any additional amount of input tax credit on account of issuance of a debit note
to an Input Service Distributor by the supplier shall be distributed in the manner
and subject to the conditions specified in clauses (a) to (j) and the amount
attributable to any recipient shall be calculated in the manner provided in clause
(f) and such credit shall be distributed in the month in which the debit note is
included in the return in FORM GSTR-6;

(n) any input tax credit required to be reduced on account of issuance of a
credit note to the Input Service Distributor by the supplier shall be apportioned
to each recipient in the same ratio in which the input tax credit contained in the
original invoice was distributed in terms of clause (f), and the amount so
apportioned shall be-

(i) reduced from the amount to be distributed in the month in which the
credit note is included in the return in FORM GSTR- 6; or

(ii) added to the output tax liability of the recipient where the amount so
apportioned is in the negative by virtue of the amount of credit under
distribution being less than the amount to be adjusted.

(1A) For the distribution of credit in respect of input services, attributable to one or more
distinct persons, subject to levy of tax under sub-section (3) or (4) of Section 9, a
registered person, having the same PAN and State code as an Input Service Distributor,
may issue an invoice or, as the case may be, a credit or debit note as per the provisions
of sub-rule(1A) of rule 54 to transfer the credit of such common input services to the
Input Service Distributor, and such credit shall be distributed by the said Input Service
Distributor in the manner as provided in sub-rule (1).
(2) If the amount of input tax credit distributed by an Input Service Distributor is reduced
later on for any other reason for any of the recipients, including that it was distributed to
a wrong recipient by the Input Service Distributor, the process specified in clause (n) of sub-
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rule (1) shall apply, mutatis mutandis, for reduction of credit.
(3) Subject to sub-rule (2), the Input Service Distributor shall, on the basis of the Input
Service Distributor credit note specified in clause (l) of sub-rule (1), issue an Input Service
Distributor invoice to the recipient entitled to such credit and include the Input Service
Distributor credit note and the Input Service Distributor invoice in the return in FORM
GSTR-6 for the month in which such credit note and invoice was issued.
Explanation. — For the purpose of this rule—
(i) the term “relevant period” shall be—
a. if the recipients of credit have turnover in their States or Union territories
in the financial year preceding the year during which credit is to be
distributed, the said financial year; or
b. if some or all recipients of the credit do not have any turnover in their States or
Union territories in the financial year preceding the year during which the
credit is to be distributed, the last quarter for which details of such turnover of
all the recipients are available, previous to the month during which credit is to
be distributed;
(ii) the expression “recipient of credit” means the supplier of goods or services
or both having the same Permanent Account Number as that of the Input Service
Distributor;
(iii) the term ‘‘turnover’’, in relation to any registered person engaged in the
supply of taxable goods as well as goods not taxable under this Act, means
the value of turnover, reduced by the amount of any duty or tax levied under
entries 84 and 92A of List I of the Seventh Schedule to the Constitution and
entries 51 and 54 of List II of the said Schedule.”
4.29 Accordingly, the recommendations of the Law Committee for amendments in CGST Act
and CGST Rules have been placed before Council for approval.
Decision: The Council agreed with the said recommendations of the Law Committee.

Agenda Item 3(v): Clarification regarding restoration of provisionally
attached property.

4.30 The Pr. Commissioner, GST Policy Wing took up the next agenda regarding
provisional attachment of the property of the taxpayers. He stated that Section 83(2) of CGST Act,
2017 states that the provisional attachment shall cease to have effect after the expiry of a period of
one year from the date of the order i.e. provisional attachment order in the form of FORM GST
DRC-22. However, as per Rule 159(2) of CGST Rules, 2017, provisional attachment of a property
shall be removed only on the written instructions from the Commissioner to that effect. But, even
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after completion of 1 year, the property is not released as the banks and other agencies with which
the property is provisionally attached unless they receive written instructions from the Tax
Authorities. Therefore, it appeared that the CGST Rules, 2017 were not in alignment with the CGST
Act, 2017. This misalignment between Rules and Act was observed by the Hon’ble Delhi Court in
the case of M/s Balaji Enterprises vs. Pr. ADG, DGGI and therefore, the Hon’ble Court had ordered
to adopt a procedure for defreezing the bank accounts.
4.31 He mentioned that the issue was deliberated by the Law Committee and the Law
Committee recommended amendment in sub-rule (2) of rule 159 of CGST Rules and in FORM GST
DRC-22, as below to align the provisions of CGST Rules with that of section 83 of CGST Act.:
Amendment in sub-rule (2) of Rule 159:

To insert the words “or on expiry of a period of one year from the date of issuance of order in
FORM GST DRC-22, whichever is earlier ,” after the words “to that effect”, to clearly provide that
order issued under FORM GST DRC-22 shall cease to have effect after expiry of period of one year
from the date of issuance.
Amendment in FORM GST DRC-22:
To insert the words “This order shall cease to have effect, on the date of issuance of order in
FORM GST DRC-23 by the Commissioner, or on the expiry of a period of one year from the date of
issuance of this order, whichever is earlier.”
4.32 He mentioned that after these amendments, order of provisional attachment would be valid
for maximum period of one year and such order shall cease to have effect after expiry of one year
from the date of issuance. He also added that these recommendations of Law Committee were
discussed and agreed to in the officers' meeting. However, it was also recommended in the officers’
meeting that officers may be issued alerts in respect of all such provisionally attached orders where
they are nearing the completion of one year so that if any action needs to be taken by the
concerned officer then the same could be done well before the lapse of the time limit. GSTN was
requested to provide the said functionality on the system so that officers could be alerted about the
time limit of expiry of one year of provisional attachment order.
Decision: The Council agreed with the recommendations of the Law Committee, including the
recommendations of the officers in the officers’ meeting, along with proposed amendment in
sub-rule (2) of Rule 159 of CGST Rules, 2017 and Form GST DRC-22.

Agenda Item 3(vi): Clarification on various issues related to Place of Supply.

4.33 The Pr. Commissioner, GST Policy Wing informed that the next agenda is regarding
issuance of a clarificatory circular on ‘Place of Supply’ in respect of three kinds of supply of
services as discussed below.
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A. Clarification regarding place of supply of services of transportation of goods by mail or
courier when either supplier or recipient of service is located outside India

4.34 Law Committee recommended that a Circular may be issued to clarify that in respect of
supply of services of for transportation of goods, including by way of mail or courier, in all cases
where location of supplier of services or location of recipient of services is outside India, the place
of supply is to be determined as per sub-section (2) of section 13 of the IGST Act, i.e. in cases
where location of recipient of services is available, the place of supply of such services shall be the
location of recipient of services and in cases where location of recipient of services is not available
in the ordinary course of business, the place of supply shall be the location of supplier of services.
This shall help in aligning the treatment for supply of services of transportation of goods, other than
by way of mail and courier, with that of supply of services of transportation of goods by way of mail
or courier services, in cases where supplier or recipient is located outside India and will remove any
ambiguities that may arise in interpretation or otherwise.
B. Clarification regarding place of supply for services in respect of advertising sector
4.35 The Pr. Commissioner, GST Policy Wing further explained the two scenarios differentiating
the supply of services of advertising through hoarding:
(i) There may be a case wherein there is supply (sale) of space on the hoarding/ structure
(immovable property) belonging to vendor to the client/advertising company for display of their
advertisement on the said hoarding/ structure. As per section 12(3)(a) of IGST Act, the place of
supply of services directly in relation to an immovable property, including services provided by
architects, interior decorators, surveyors, engineers and other related experts or estate agents, any
service provided by way of grant of rights to use immovable property or for carrying out or co-
ordination of construction work shall be the location at which the immovable property is located.
Therefore, the place of supply of service provided by way of supply of sale of space on hoarding/
structure for advertising or for grant of rights to use the hoarding/ structure for advertising in this
case would be the location where such hoarding/ structure is located.

(ii) There may be cases where the advertising company wants to display its advertisement on
hoardings/ bill boards at a specific location availing the services of a vendor. The responsibility of
arranging the hoardings/ bill boards and display of advertisement on the said location lies with the
vendor and during this entire time of display of the advertisement, the vendor is in possession of
the hoarding/structure at the said location on which advertisement is displayed whereas the
advertising company is not occupying the space or the structure. As there is no supply (sale) of
space on the hoarding/ structure (immovable property) belonging to vendor to the client for display
of their advertisement on the said display board/structure, it does not amount to sale of
advertising space. Also, as there is no supply (sale) of rights to use the structure (immovable
property) belonging to vendor to the other person to use for any purpose, it does not amount to
supply by way of grant of rights to use immovable property. Therefore, such services provided by
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the Vendor to Advertiser are purely in the nature of advertisement services in respect of which
Place of Supply should be determined in terms of Section 12(2) of IGST Act, 2017 according to
which place of recipient (Advertiser) is the Place of Supply and nature of transaction as to whether
inter- state or intra-state shall be decided accordingly.

4.36 The Hon’ble Member from Goa raised his concern that in services connected to
‘Immovable Property’ like the services of architect and engineer or stay in hotel, the place of supply
in such cases is where the land is located and the GST goes to the state where the land property is
situated irrespective of B2C or B2B supplies. Similarly, if any GST is collected on advertising
through hoarding, then GST should go to the state where the hoarding is located.. Hence for
advertising through hoarding, place of location of hoarding should be considered as ‘Place of
Supply’.
4.37 The Pr. Commissioner GST Policy Wing mentioned that the concern of the Hon’ble
Member from Goa has been addressed in the proposed circular, wherein it has been clarified that
where the hoarding is taken on rent by the advertiser, the place of supply is the place of location of
hoarding.
C. Place of supply in case of supply of the “co-location services”

4.38 Co-location services are in the nature of “Hosting and information technology (IT)
infrastructure provisioning services” (S. No. 3 of Explanatory notes of SAC-998315). Such services
do not appear to be limited to the passive activity of making immovable property available to a
customer as the arrangement of the supply of colocation services not only involves providing of a
physical space for server/network hardware along with air conditioning, security service, fire
protection system and power supply but it also involves the supply of various components of
‘Hosting and information technology (IT) infrastructure provisioning services’ like network
connectivity, backup facility, firewall services, and monitoring and surveillance service for ensuring
continuous operations of the servers and related hardware, etc. In such cases, supply of colocation
services cannot be considered as the services of supply of renting of immovable property. Therefore,
the place of supply of the colocation services shall not be determined by the provisions of clause (a)
of sub-section (3) of Section 12 of the IGST Act but the same shall be determined by the default
place of supply provision under sub-section (2) of Section 12 of the IGST Act i.e. location of
recipient of co-location service.
4.39 However, in cases where the agreement between the supplier and the recipient is
restricted to providing physical space on rent along with basic infrastructure, without components of
Hosting and Information Technology (IT) Infrastructure Provisioning services and the further
responsibility of upkeep, running, monitoring and surveillance, etc. of the servers and related
hardware is of recipient of services only, then the said supply of services shall be considered as the
supply of the service of renting of immovable property under provisions of clause (a) of sub-section
(3) of Section 12 of the IGST Act.
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Decision: The Council agreed with the recommendations of the Law Committee along with the
proposed Circular.
Agenda Item 3(vii): Agenda Note for issuance of clarification relating to export of services-
condition (iv) of the Section 2 (6) of the IGST Act 2017.

4.40 The Pr. Commissioner, GST Policy Wing informed that doubts were raised by trade and
industry associations on the issue that export remittances realized in INR into Special Vostro
accounts are being denied the benefit of exports by some of the tax authorities by taking a view that
the remittances received by taxpayer in ‘INR’ in such Vostro accounts are not permitted by RBI for
the purpose of consideration of supply of services as export of services as per provisions of clause
(6) of section 2 of IGST Act, 2017. Therefore, the refunds of ITC are being denied to the exporters
by such tax authorities claiming that the said exporter has not realized export proceeds in convertible
foreign exchange and accordingly, the conditions for qualifying as export under clause (6) of section
2 of IGST Act, 2017 are not fulfilled.
4.41 Sub-clause (iv) of Section 2(6) of the IGST Act, 2017 requires that for a supply of
service to qualify as export of service, the payment for such service should be received by the
supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the
Reserve Bank of India. On perusal of the provisions of RBI’s A.P. (DIR Series) Circular No.10
dated 11th July, 2022 & Para 2.52 (d) of the Foreign Trade Policy (FTP) 2023, it appears that the
conditions of the said sub-clause are fulfilled when the Indian exporters, undertaking exports of
services, are paid the export proceeds in INR from the balances in the designated Special Vostro
Account of the correspondent bank of the partner trading country in terms of Regulation 7(1) of
Foreign Exchange Management (Deposit) Regulations, 2016, as mandated by RBI’s A.P. (DIR
Series) Circular No.10 and reiterated further in Foreign Trade Policy, 2023. Law Committee has
therefore recommended that it may be clarified through a Circular that the condition of sub-clause
(iv) of Section 2(6) of the IGST Act, 2017 will be considered to be fulfilled when the Indian
exporters, undertaking exports of services, are paid the export proceeds in INR from the
balances in the designated Special Vostro Account.
Decision: The Council agreed with the recommendations of the Law Committee along with the
proposed Circular.
Agenda 3 (viii). Amendment in Central Goods and Services Tax Rules, 2017 and GST
REG/PCT – FORM(s)
4.42 The Principal Commissioner, GST Policy Wing stated that the agenda pertains to few
minor procedural changes to align GST REG/PCT-FORMS(s) and amendments in the CGST
Rules, 2017, which have been recommended by the Law Committee. The amendments proposed
are as follows:
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A. Incorporation of ‘One Person Company’ in FORM GST REG 01 i.e.
Application for Registration
4.43 The registration application process for certain business types requires a selection of the
‘Constitution of Business’ from a dropdown in Part B of FORM GST REG-01 i.e. Application for
Registration. A recent change on the portal made it mandatory for applicants to provide details of at
least two Partners/Promoters in certain specific categories of ‘Constitution of Business’. However,
there was no option for the category of ‘One Person Company’ applicants in the dropdown. To
address this issue, an advisory was issued by GSTN advising ‘One Person Company’ applicants to
select ‘Others’ in the dropdown and specify ‘One Person Company’ in a text field to complete the
registration process.
4.44 Therefore, it was proposed to make available in Part B of FORM GST REG-01 as well
as on portal in the ‘Constitution of Business’ tab, an option of ‘One Person Company’, so that one
can apply as ‘One Person Company’. With this option, the system will allow the applicant to fill in
the details of the single member or owner and to submit the application successfully on system.
B. Application for Enrolment as Goods and Services Tax Practitioner- Amendment in
Form GST PCT-01.
4.45 Rule 83(1) of the CGST Rules stipulates the conditions for enrolment as Goods and
Services Tax practitioner by any person. It was recommended that necessary changes are required
to be made on the portal as well as in Part-B of Form GST PCT-01 in line with the rules as below:

a. Certificate of Practitioner is not required for CA/ICWA/CS as per the rules.
b. Option related to Graduate or Post Graduate in Law and Higher Auditing is not available
in notified form and the portal and needs to be inserted.
c. Option related to any other examination notified by Government is also not available in
notified form and the portal and needs to be inserted.
d. Deleting the option of “Advocate” as it is not aligned with the existing rules.

C. Application for cancellation of TCS and TDS registration- Enhancement in Form GST
REG-08 format for having options for cancellation of registration against the request
made by the TDS and TCS registered persons.

4.46 Rule 12(3) of the CGST Rules was amended vide Notification No. 26/2022- CT dated
26.12.2022. This amendment allows tax officers to accept TDS/TCS taxpayers' requests for
registration cancellation via email or manual submission and issue cancellation orders in
FORM GST REG-08. Presently, the tax officers are issuing Order of cancellation of Registration
as Tax Deductor at Source or Tax Collector at Source in FORM GST REG-08 for suo-moto
cancellation of registration alone, with no separate format for self-cancellation applications.
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4.47 A recommendation has been made to amend FORM GST REG-08 to specifically
provide for cancellation of registration upon request by TCS/TDS taxpayers. Additionally, has
been recommended to rephrase and align the cancellation reasons in FORM GST REG-08 with
those in FORM GST REG-19, as per the CGST (5th Amendment) Rules, 2022, for improved
clarity.
D. Amendment in rule 142 (3) of the CGST Rules with respect to FORM GST DRC-
05
4.48 A recommendation has been made to remove the anomaly between rule 142(3) and
FORM GST DRC-05, by substitution of the words “intimation” instead of “order” in rule 142(3)
with respect to FORM GST DRC-05.
E. Changes in FORM GSTR-8 to include late fee

4.49 Section 47 of the CGST Act has been inter alia amended vide Finance Act, 2022 and the
said amendment has been notified w.e.f. 01.10.2022 vide Notification No. 18/2022-Central Tax
dated 28.09.2022. The amendment envisages that the late fee on delayed furnishing of return in
FORM GSTR-8 under section 52 of the CGST Act, 2017 by e-commerce operators, should also be
levied from the date of implementation of the aforesaid amendment. Since, existing FORM GSTR-8
does not contain late fee table, it has been recommended to make requisite changes in FORM
GSTR-8 as per the agenda note.
Decision: The Council agreed with the recommendations of the Law Committee in Agenda
Item 3(viii) along with the amendments in said rule and said Forms.


Agenda Item 3(ix): Subject: Clarification on the scope of the refund on account of inverted
duty structure in respect of supplies of certain construction services.
4.50 The Pr. Commissioner, GST Policy Wing presented the agenda and stated that the issue
pertained to Notification No. 15/2017-Central Tax (Rate), dated 28.06.2017, whereby refund of
unutilized input tax credit was restricted in respect of supplies specified in item 5(b) of Schedule II
of the Act.
4.51 Field formations have sought clarification regarding the applicability of Notification
No. 15/2017-Central Tax (Rate), dated 28.06.2017, concerning refund applications for services
involving the construction of bridges and roads, among others.
4.52 Some field formations consider roads and bridges as "civil structures" falling under item
5(b) of Schedule II of the CGST Act, 2017, and assert that refund of accumulated credit on account
of inverted duty structure is restricted by this notification for such services.
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4.53 On the contrary, other field formations argue that the construction of roads and bridges is
not covered by item 5(b) but rather they fall under works contract services as per Item 6(a) of
Schedule II of the CGST Act, 2017 and therefore, there is no restriction on refund of
accumulated credit for inverted duty structure in the case of such supply of services under
Notification No. 15/2017-Central Tax (Rate), dated 28.06.2017.
4.54 Accordingly, clarification is needed to resolve this interpretation discrepancy.
4.55 The Pr. Commissioner, GST Policy Wing informed that the issue had been thoroughly
discussed by the Law Committee in its meeting, wherein two differing views emerged. The first
perspective, which was held by the majority of members, posits that the construction of bridges and
roads does not fall within the purview of item 5(b) of Schedule II of the CGST Act, 2017. It was
argued that constructions of bridges and roads etc. are not intended for the purpose of sale, and
item 5(b) of the said Schedule primarily pertains to real estate transactions where the supply
includes the value of land and is meant for sale. According to this view, there is no restriction on
refund of accumulated credit for inverted duty structure concerning such services under
Notification No. 15/2017-Central Tax (Rate) dated 28.06.2017 and the same can be clarified
through a circular.
4.56 Conversely, the opposing viewpoint, held by the State of Karnataka, contends that the
construction of bridges and roads, among other similar structures, shall be categorized as "civil
structures" falling under item 5(b) of Schedule II of the CGST Act, 2017. Accordingly, it is argued
that the refund of accumulated credit should be denied for such services.
4.57 He further apprised the Council that during the Officer's meeting held on 06.10.2023, the
majority of the States concurred with the first view. However, a few states, including Karnataka,
Punjab, Haryana, Tamil Nadu, Uttar Pradesh, Kerala, and Jammu & Kashmir, held a divergent
view favoring the second perspective. This situation has necessitated detailed discussions by the
Council so as to reconcile these differing interpretations to achieve clarity and uniformity.
4.58 The Hon'ble Member from Maharashtra emphasized the need to distinguish the
construction of roads and bridges from the real estate sector, as special concessions had been
granted to the real estate sector, which is not the case for the construction of roads and bridges.
Therefore, he stated that the refund of accumulated credit should not be restricted for construction
of roads and bridges.
4.59 The Hon'ble Member from Karnataka highlighted that Notification No. 15/2017-
Central Tax (Rate), dated 28.06.2017, restricted the refund of unutilized input tax credit concerning
supplies specified in item 5(b) of Schedule II of the Act. He stated that item 5(b) of Schedule II
encompasses 'civil structures,' and the Act does not provide a specific definition for this term.
However, he provided a common definition of 'civil structure,' explaining that it refers to
engineered constructions that serve various purposes in society. These structures are designed to
support infrastructure, transportation, utilities and public services. Examples of civil structures
include bridges, dams, highways, tunnels, airports, sewage treatment plants, and water supply
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systems. He argued that since all engineered constructions used for public purposes, like bridges
and roads, fall under the category of civil structures, they should not be eligible for refund.
Furthermore, he informed the Council that the State of Karnataka has been following this practice
consistently, with most assesses complying, except for one who is litigating the matter in the High
Court. The Member stressed that there have been no significant challenges, and the implementation
has been smooth. He asserted that in their interpretation, item 5(b) of Schedule II of the Act
encompasses more than just the real estate sector. They contended that the entry comprises
independent components and is inclusive in nature. This inclusivity implies that this entry extends
beyond real estate and is not limited to the sector. He stated that it may not be appropriate to
dilute the Notification through a clarification and any changes should be made by amending the
Notification rather than through a clarification. He cited the Hon’ble Supreme Court ruling, among
various others, as held in Commissioner of Sales Tax, Uttar Pradesh, Lucknow v. Parson Tools &
Plants Kanpur (1975), highlighting a para from the ruling that:
‘the language of which is otherwise plain and unambiguous, the Court is not competent to supply
the omission by engrafting on it or introducing in it, under the guise of interpretation, by analogy
or implication, something what it thinks to be. A general principle of justice and equity. To do so,
would be entrenching upon the preserves of Legislature’.
4.60 The Hon’ble Member from Karnataka stated that all notifications are placed in the
Parliament and State Legislatures for approval, and any attempts to modify them through
clarifications would constitute an encroachment into the legislature's domain. He also highlighted
that issuing a clarification would have revenue implications for the State, though exact calculations
had not been performed. He estimated a potential revenue outgo of approximately Rs 1000 crore
for the State of Karnataka. He raised the issue whether the State would be compensated for this
revenue loss resulting from the refund of accumulated credit as it pertains to protected revenue era.
4.61 The Hon’ble Chairperson acknowledged the Member's perspective and proposed it for
the Council's consideration. She agreed with the Member's argument that there might not be a
necessity to define the term "civil structure" used in item 5(b) of Schedule II, to provide clarity as
to whether the term “civil structure” in item 5(b) of Schedule II includes bridges or not. However,
she pointed out that the Law Committee's intent seemed to be more focused on including only
real estate structures in item 5(b) of Schedule II and in the notification by using clarification route.
She expressed her concern that if the Law Committee's intention was to exclusively include real
estate structures only in item 5(b) or in the restriction in the said Notification, it should have been
formulated the Law/ Notification more explicitly, rather than taking a circuitous route through the
clarification.
4.62 The Secretary clarified that it appeared that the provisions were made to restrict
accumulated credit for the real estate sector. However, the inclusion of the term "civil structure" in
item 5(b) of Schedule II apparently was to prevent any inadvertent omissions of other complexes,
buildings or structures within real estate. The Secretary acknowledged that the definition of "civil
structure" clearly encompassed bridges and roads, even though that may not be the original intent of
Notification No. 15/2017-Central Tax (Rate), dated 28.06.2017 to restrict refund of credit in respect
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of construction of bridges and roads. In line with the Hon’ble Member from Karnataka's
suggestion, the Secretary proposed that the said notification could be prospectively amended to
explicitly state what the entry includes. This would protect the revenue from previous years for the
States and provide clarity for future situations. This approach could potentially merge both views
and address the grey area in question, particularly since these projects typically involve government
contracts where bidders need clear tax regulations.
4.63 The Hon'ble Member from Karnataka extended gratitude to the Chairperson and the
Revenue Secretary for their positive response. He noted his reservations regarding the prospective
approach but expressed willingness to withdraw them, recognizing that the Council has come two
steps forward.
4.64 The Hon'ble Member from West Bengal raised concerns about those States who have
already refunded the accumulated credit and have been compensated by the Centre. She suggested
that the principle of 'Ejusdem generis', should be considered for better understanding the intent. She
emphasized that taking this aspect into account might help avoid complications and ensure a
smoother transition.
4.65 The Hon'ble Member from Kerala expressed agreement with the proposal but sought
clarification regarding the contracts under consideration. Specifically, the Member inquired
whether the term "prospective" referred to future contracts and agreements and not those already
in existence.
4.66 In response, the Secretary clarified that the amendment should be in a manner that
addresses both existing and future contracts. Regarding the query from the Hon'ble Member
from West Bengal, the Secretary explained that there would be no clarification retroactively for past
cases. States would retain the discretion to handle past cases as they see fit, based on their
interpretation, as the amendment would be prospective.
4.67 The Hon'ble Member from Bihar requested to clarify the language used in the subject
matter.
Decision: The Council agreed to amend the Notification No. 15/2017-Central Tax (Rate), dated
28.06.2017 prospectively to clearly define the scope of restriction imposed by the said
notification so as to provide that refund under inverted duty structure shall be restricted only
in respect of supply of services of construction of a complex, building, structure, etc., which
are intended for sale to a buyer, wholly or partly, and not to other construction/ work contract
services.
5. Agenda item 4: Recommendations of the Fitment Committee for the consideration of the
GST Council

5.1 The Secretary asked the Joint Secretary, TRU to present the agenda relating to the
recommendations of the Fitment Committee.
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5.2 Joint Secretary, TRU stated that the Fitment Committee agenda was summarized in six
Annexures (I to VI). There were a total of 12 agenda items relating to goods out of which the
Fitment Committee had recommended making changes in the GST Rate or issue of clarifications in
case of 4 items (Annexure-I of the Agenda Volume-I), no change recommended in respect of 6
items (Annexure-II of the Agenda Volume-I) and deferred two issues for further examination
(Annexure-III of the Agenda Volume-I). One agenda item was being placed before the Council for
information. In the case of services, there were a total of 24 agenda items, of which the Fitment
Committee had recommended making changes in the GST Rate or issue of clarifications in case of
10 items (Annexure-IV of the Agenda Volume-I), no change recommended in respect of 5 items
(Annexure-V of the Agenda Volume-I) and deferred 9 items for further examination (Annexure-VI
of the Agenda Volume-I).
5.3 Thereafter, JS, TRU presented the agendas pertaining to the recommendations of the
Fitment Committee. (Annexure-4)
5.4 The first item for discussion was concerning “Food preparation of millet flour in powder
form, containing at least 70% millets by weight” in respect of which the Fitment Committee had
recommended for reduction of GST rate from 18% to 0% for food preparation of millet flour, in
powder form, containing at least 70% millets by weight (CTH 1901), sold in other than pre-
packaged and labelled form and 12% if sold in pre-packaged and labelled form. She stated that
there was also a request for regularising the issue for the past period, but the Fitment Committee
had not recommended the same as there was no ambiguity regarding tax rate on flour preparations
for the past period. The same had been discussed in the officers’ meeting and no objections were
raised.
5.5 The Hon’ble Member from Delhi pointed out that currently branded Atta is being
charged 5% GST and the rate of GST being proposed on millets is 12%, and if the intention is to
promote the use of millets, then the rate of tax should be lesser or same as that of branded atta.
Joint Secretary, TRU clarified that millet flour is already at Nil if sold in other than packaged form
and at 5% if sold in packaged form. She clarified that the item under discussion is preparations of
millet flour and that the proposal was for such value added products only.
5.6 The Hon’ble Member from Karnataka proposed 5% rate for value added products of
millets as both the Centre and States were promoting the usage of millets in the International Year
of Millets. He reasoned that this will give a fillip to millet consumption. This would lead to better
uptake from farmers and better prices for them. He further stated that millets are highly nutritious
and governments are spending money on fortifying food through various schemes. Millets on the
other hand are naturally fortified food. To benefit the marginal farmers who grow millets, he
suggested that processed and packaged foods made out of millets should also be brought to 5%. He
stated that India has a lot to gain by promoting millets and might gain some export markets as well.
5.7 The Hon’ble Chairperson clarified that baked items, biscuits etc. referred to by the
Hon’ble Member form Karnataka was not part of the agenda to be discussed. She further asked the
Council to take a conscious call on the issue under discussion.
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5.8 The Secretary clarified that atta whether of wheat or millets, if sold loose is chargeable to Nil
GST. However, if sold in packaged form, atta even if it is a mix of millets and wheat, as long as it
is flour, attracts 5% GST. However, if the flour has other ingredients added to it, like dry fruits etc.
then it will attract higher rate of duty. Proposal is to charge 12% GST on such preparations
containing at least 70% millets, packaged and labelled, and nil if sold loose, instead of present rate
of 18% GST.
5.9 The Hon’ble Member from Karnataka proposed for bringing the content of millets to two-
third and that the rest of one-third could be anything like sugar, dry fruits, nuts, pulses, Jaggery
powder etc. That looking at the spirit of the Council, the processed foods based on millets, with
higher share of millets could be considered at least in the future as the present agenda was limited
to only atta.
5.10 The Hon’ble Member from West Bengal asked for clarification regarding the content in
view of the proposal of the Hon’ble Member from Karnataka.
5.11 The Hon’ble Chairperson clarified that the proposal was for 70% and that Council might
consider bringing that to two-thirds based on proposal of Hon’ble Member from Karnataka.
5.12 The Hon’ble Member from Meghalaya stated that the idea was to change the food habits
by including millets in diets of people which would ultimately benefit the small and marginal
farmers and supported the views expressed by the Hon’ble Member from Karnataka.
5.13 The Hon’ble Member from Tamil Nadu stated that millet flour when mixed with other
flours should be charged to 5% GST, if mixed with any other value added product should be
chargeable to 12%.
5.14 The Hon’ble Members from Maharashtra, Andhra Pradesh, Meghalaya, Punjab, West
Bengal, Goa, Uttar Pradesh, Assam, Kerala and Odisha supported the proposal for 5% GST rate.
However, the Hon’ble Member from Kerala opposed any reduction in GST rate on processed foods
like cookies.
5.15 The Hon’ble Chairperson clarified that the proposal was only for raw product and as all
have agreed for a rate of 5%, the proposal might be accepted for 5% for pre-packaged and labelled
preparations of millet flour containing at least 70% millets and 0% if sold in other than pre-
packaged and labelled form.
Decision: The Council approved the proposal for reduction in GST rate to 0% for food
preparations of millet flour in powder form, containing at least 70% millets by weight, sold in
other than pre-packaged and labelled form, and 5% if sold in pre-packaged and labelled form.
5.16 Joint Secretary, TRU then presented the next agenda item. She stated that the GST
Council in its 50th meeting had recommended updating the list of banks/entities eligible for
availing IGST exemption on import of gold, silver or platinum in accordance with Appendix
4B of HBP,FTP, 2023 after confirmation by DGFT & DGEP and the same was accordingly done.
The current recommendation by the Fitment Committee was to update the list of banks eligible for
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availing IGST exemption as authorized by RBI as per the public notice issued by DGFT in August,
2023. She stated that the Fitment Committee has also recommended that the GST Council might
consider giving approval to update such lists as and when amended by DGFT and thereafter place
the same before the Council for information.
Decision: The Council approved the recommendations of the Fitment Committee with regard
to updating the list 34A and 34B of Notification No. 50/2017-Cus as per revised appendix 4B
issued vide DGFT Public Notice dated 18.08.2023 and to update such lists as and when
amended by DGFT and placing before the Council for information thereafter.
5.17 Joint Secretary, TRU then presented the next agenda item pertaining to clarification on
imitation zari thread or yarn made out of polyester film (metallised) or plastic film. She stated that
the GST Council in its 50th meeting had recommended reduction of GST rate to 5% on all
imitation zari thread or yarn known by any name in trade parlance. She stated that doubts had
been raised as to whether imitation zari thread also covers metal coated plastic film converted to
metallised yarn and twisted with nylon, cotton, polyester or any other yarn to make imitation zari
thread. She stated that as per the HS Explanatory Notes, the same would be covered under heading
5605 with 5% GST. The Fitment Committee has therefore, recommended issuing a clarification to
that effect and in view of the reservations expressed by the state of Gujarat, also recommended to
clarify that no refund will be permitted on polyester film (metallised)/ plastic film on account of
inversion.
Decision: The Council approved the issue of clarification as recommended by the Fitment
Committee that imitation zari thread or yarn made from metallised polyester film/plastic film
are covered under heading 5605 and levied to 5% GST and recommended that no refund will
be permitted on polyester film (metallised)/ plastic film on account of inversion in duty
structure.
5.18 Joint Secretary, TRU then presented the Agenda points as mentioned in Annexure-II of
the agenda where the Fitment Committee had recommended no change . She stated that a request
had been received to clarify that concrete mixers, self-loading concrete mixers and boom pumps i.e.
concrete mixers when supplied independently or mounted on a chassis supplied by the customers,
would not constitute a body for a motor vehicle and would not be classified under HSN 8707 at
28%. She stated that the Fitment Committee recommended that a specific clarification may not be
required in view of the fact that the entries under HS Codes and explanatory notes are clear and there
is no ambiguity.
Decision: The Council approved the recommendation of the Fitment Committee in this
regard.
5.19 Joint Secretary, TRU then presented the next agenda item pertaining to extending the
concessional rate of GST for spare parts of renewable energy devices irrespective of its end-use. She
stated that currently concessional GST rate of 12% is provided for parts for manufacture of enlisted
devices and not for replacements/ repairs. Fitment Committee had recommended to maintain status
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quo. When the issue came up for discussion in the officers’ meeting, Punjab had requested for a
relook at all end used based exemptions in the notification and it was decided that the Tax
Research Unit would examine in totality all end use based exemptions in GST.
Decision: The Council approved the recommendation of Fitment Committee on maintaining
status quo with respect to GST on spare parts for enlisted renewable energy devices and
directed the TRU to examine all end use based exemptions.
5.20 Joint Secretary, TRU then presented the next agenda item pertaining to reduction in
GST rate on lithium ion batteries from 18% to 5%. She stated that when Fitment Committee
examined the issue, it was found that lithium ion batteries have multiple uses and hence
recommended to maintain status quo.
Decision: The Council approved the recommendation of the Fitment Committee for
maintaining status quo on the GST rate for supply of lithium ion batteries.
5.21 Joint Secretary, TRU then presented the next agenda item pertaining to request for
clarification on scope of sugar boiled confectionary. She stated that sugar confectionary currently
attracts 18% GST while sugar boiled confectionary attracts 12% GST. Fitment Committee
recommended that no clarification is required in this regard as there exists FSSAI standards for the
products.
Decision: The Council approved the recommendation of the Fitment Committee that no
clarification is required to be issued regarding scope of sugar boiled confectionary.
5.22 Joint Secretary, TRU then presented the next agenda item pertaining to requests from
Beverages associations and Ministry of Defence to exempt GST compensation cess on supply of
aerated beverages by Unit Run Canteens (URCs) or alternatively, the applicable cess may be collected
at the Canteen Stores Department (CSD) depot level for supplies made by URCs. She stated that
currently all supplies by URCs to authorised customers is fully exempt from GST, however, a
conscious decision was taken in the 15th meeting of the GST Council not to exempt levy of
Compensation Cess. She stated that currently Compensation Cess is being levied on two wheelers,
four wheelers and aerated beverages. Two wheelers and four wheelers are being supplied through
CSD depots only and cess is being duly collected and paid to the government. Aerated beverages
were being supplied by URCs and because of the difficulties associated with their registration as they
are spread out and located in difficult terrain, they are unable to pay the compensation cess and
therefore have stopped procurement and sales of aerated beverages. Fitment Committee recommended
no change in rate of compensation cess on aerated beverages supplied by Unit Run Canteens and
regarding the option of collecting applicable cess at Depot level for supplies by URCs, it
recommended that the matter may be referred to Law Committee for examination.
Decision: The Council approved the recommendations of the Fitment Committee
5.23 Joint Secretary, TRU stated that the next agenda item arose out of a Parliamentary
assurance. The issue pertains to requests from some states for levy of uniform additional
compensation cess on cigarettes and tobacco products. She stated that the issue was examined by the
Fitment Committee and Fitment Committee recommended no change in compensation cess rates on
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cigarettes, bidis, smokeless tobacco products in view of the recent changes in the levy of
compensation cess on such commodities from ad valorem rate to RSP linked rate and increase in
National Calamity Contingent Duty (NCCD) on specified cigarettes.
5.24 The Hon’ble Member from Karnataka stated that the issue pertained to increase in taxation
on tobacco products, either GST or cess, and that they preferred the tax route rather than increasing
cess. He stated that the incidence of tax on tobacco products in India was about 54% which was way
below the global standard of 75%. He further stated that considering the ill health effects of tobacco
products, there should be higher tax on those products and therefore, GST rate on tobacco products
should be increased and slowly brought on par with global standards which was 75%. He stated that
there was a worldwide consensus on limiting the usage of tobacco and that it was the people in
middle and lower income level which suffered the most due to the detrimental health effects of
the use of tobacco. He reminded the august house that India is a signatory to the Framework
Convention on Tobacco Control of WHO wherein parties to the Convention have agreed that price
and tax policies are effective measures for controlling consumption of tobacco. He further stated that
tobacco companies are now focussing on developing and under developed countries as the
developing countries have been very aggressive with their tax policies. He urged the Council to
consider increasing the tax on tobacco products to global standards. He stated that the same applied
to aerated beverages also as they cause huge health risk and that many countries had moved
aggressively in taxing aerated beverages and that the Council should look towards increasing the tax
on tobacco products
5.25 The representative from Goa stated that while he agreed with the arguments of Hon’ble
Member from Karnataka, and it is the poor who suffer from the ill effects of tobacco use, increase in
taxation will promote the grey market where such products are sold without paying any taxes
whatsoever. Therefore, there is a need to balance the taxation in such a way that that it did not lead
to illegal market in a big way. He stated more data was required to arrive at an appropriate well
thought out decision.
5.26 The Hon’ble Member from Maharashtra stated that he supported the view of Goa as it has
been their experience in Maharashtra that increase in rates leads to increased black marketing. He
stated that while the cause was good, caution needs to be exercised in increasing the GST rate
5.27 The Secretary informed the Council that the Parliamentary Assurance Committee needed
to be informed in this regard and whenever more data/information was available, the issue might be
revisited again.
Decision: The Council agreed to maintain status quo on levy of compensation cess on
cigarettes, bidis and smokeless tobacco products.
5.28 Joint Secretary, TRU informed the Council that 2 issues as mentioned in Annexure-3 were
deferred for further examination.
5.29 The Hon’ble Member from Maharashtra stated that khari is not puff and is just a toasted
product. It is consumed in few states like Goa, Maharashtra, Gujarat and requested to take the issue
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on priority. He stated that all requisite certificates from Institutes had been obtained.
5.30 The Secretary stated that in the officers’ meeting he had already mentioned that both the
agendas, pertaining to khari and steel scrap, may be expedited and the Council may like to direct the
Fitment Committee to bring recommendations on these two issues in the next meeting.
Decision: The Council directed the Fitment Committee to examine the issues pertaining to
khari and steel scrap and bring the same before the Council in its next meeting along with its
recommendations.
5.31 Joint Secretary, TRU informed the Council that the Hon’ble Madras High Court had
directed that the authority concerned shall ensure that necessary orders exempting GST and motor
vehicle’s tax on Motor Vehicle purchased by the petitioner shall be passed within four weeks from
date of receipt of undertaking letter from the petitioner. She stated that this Writ Petition had been
filed by a visually impaired person who sought the same concessional rate of GST(18%) which is
currently applicable to orthopedically disabled persons. She said that an appeal has been filed against
the decision along with stay petition and the issue is being brought for information of the Council.
5.32 The Hon’ble Member from Goa stated that the GST Concession for purchase of motor
vehicles available to only Orthopedically disabled persons should also be made available to all
Divyangjans. In future, vehicles may also be modified for use by other Divyangjans beyond those
orthopedically challenged. Since the concessional rate requires a certificate from Ministry of Heavy
Vehicles, there is no scope for misuse of this concession. He reiterated that the facility
should be extended to all Divyangjans.
5.33 The Secretary clarified that if any concession had to be given to any person and not to
goods, then the same had to be through subsidy or reimbursement route and that the Council
had decided the same in its earlier in 47th meeting. He stated that this issue has been brought to
notice of the Council that an appeal has been filed in this case before the Hon’ble Court.

Agenda Item 4 (Part-II): (i) Agenda on Extra-Neutral Alcohol (ENA)

5.34 Joint Secretary, TRU then presented the agenda no 4 (Part-II) related to taxation of Extra
Neutral Alcohol (ENA). She informed the Council that that issued was first discussed in 20th
Meeting of the GST Council and in subsequent meetings but decision could not be arrived except
for the fact that 18% GST would be levied on ENA for Industrial Use. Thereafter, there are varying
practices across States wherein some States levied VAT and some levied GST and where taxpayers
had paid GST they had been issued notices demanding VAT on the same; where assessees
had paid VAT, they have been issued notices demanding GST on ENA supplied. This had led to
multiple litigations. She stated that over 40 Writ Petitions had been filed in the state of Madhya
Pradesh asking the Court to direct the GST Council to settle the issue because of the difficulties
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faced by the ENA manufacturers. The proposal was discussed in the officers’ meeting and is now
presented based on the inputs given by States. She stated that the proposal is to place before the
Hon’ble Supreme Court where an appeal by the Uttar Pradesh government is pending that the GST
Council has no intention to tax ENA for use in the manufacture of Alcoholic Liquors for Human
Consumption and that Law Committee may be asked to carry out suitable amendments for keeping
ENA for manufacture of alcoholic liquors for human consumption out of the ambit of the GST; and
to notify rate of 18% for new tariff line created for ENA for Industrial use. She stated there is also a
proposal to reduce the GST rate on Molasses from 28% to 5%.
5.35 The Hon’ble Member from Goa stated that the present proposal to exempt ENA is good as it
will reduce the input cost for the liquor industry. Reduction of tax rate on molasses from 28% to 5%
would also reduce the tax burden on the liquor industry. Therefore, states could increase the excise
duty on liquor and also VAT on liquor finished product and this would help them to increase their
revenue. He stated that it is clear that ENA both for industrial use and for use in manufacture of
alcoholic liquors for human consumption is under GST.
5.36 The Hon’ble Member from Tamil Nadu opposed the proposal as the same would go
against the very principle of bringing all goods under GST and would not be aligned with the
constitutional provisions and various judgements already pronounced in this regard. He mentioned
that the Hon’ble Allahabad High Court had held that imposing VAT on ENA is ultra-vires. Further,
administration of two rates on ENA at the hands of supplier, based on end use, would pose
implementation problems. It would be difficult to make out whether the ENA is meant for
industrial use or for manufacture of alcoholic liquors for human consumption. He also
mentioned that in the 47th meeting of the GST Council, the Fitment Committee had not
recommended the request for exemption of molasses on the grounds that end use based exemptions
are difficult to monitor and need to be discouraged and the Council had accepted the
recommendation of the Fitment Committee. Thirdly, net importing states like Tamil Nadu stand to
lose if supply of ENA for manufacture of alcoholic liquor is kept outside the ambit of GST. Their
study estimates the loss to be of Rs. 35 crore. He requested that ENA may be brought within the
ambit of GST. He stated that reduction in rate of GST on molasses from 28% to 5% will
have a huge impact on the revenues of the state to the tune of Rs. 92 crore per annum. Therefore,
Tamil Nadu was not agreeable to the proposal.
5.37 The Secretary clarified that there was no specific entry for ENA and that currently it is
taxed under the residual category. In the pre GST era, there was no excise duty on ENA meant for
manufacture of alcohol. He further stated that it is a pro-State measure and the Centre was in fact
conceding the revenue arising out of GST on ENA to the states, which would then enable the States
to impose higher taxes in the form of excise duty and VAT on alcohol, the end product, as already
mentioned by the Hon’ble Member from Goa. The Council is not clarifying whether VAT can be
imposed on ENA meant for use in production of alcohol for human consumption as the Council is
not empowered to decide the same. The present proposal is to not impose GST on ENA meant for
use in manufacture of alcoholic liquor for human consumption which would enable the States to
impose higher tax on end product. Further, Molasses is not an end product but an input for
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manufacture of alcoholic liquor for human consumption. The reduction of rates on molasses is also a
pro-farmer measure. This step will increase liquidity with mills and enable faster clearance of cane
dues to sugarcane farmers. This will also lead to reduction in cost for manufacture of cattle feed as
molasses is also an ingredient in its manufacture. He stated that only alcohol for human consumption
was out of the purview of GST and ENA is not alcohol meant for human consumption. Therefore,
although the Council has the power to levy GST on ENA as per the order of Allahabad High
Court which is buttressed by the opinion of the learned AG, the same would be kept outside the
purview of GST by amending the law. He stated that the Constitution gives the Council power to
levy GST on ENA, but it is for the Council to decide whether or not they want to tax it.
5.38 The Hon’ble Member from Karnataka stated that the issue was discussed extensively in
the 20th meeting of the GST Council. He welcomed the gesture to keep ENA meant for production
of alcoholic liquor for human consumption out of the purview of GST which was the demand of
most of the States earlier. It is a pro-State proposal and a step in the right direction.

5.39 The Secretary clarified that while the Council may decide to not levy GST on ENA, it
does not mean that they do not have the right so to do and the judgements of the Courts also are in
line with the same. The learned AG had also opined that both the Centre and the States have a right
to impose GST on ENA. The current proposal is to cede that right of the Centre when ENA is
supplied for manufacture of alcoholic liquor for human consumption. The intent of the Council
would be placed before the Hon’ble Supreme Court and other High Courts where the issue is
pending. The amendments to law etc. will be examined by the Law Committee.
5.40 The representative of Madhya Pradesh stated that the views of the Hon’ble Member from
Madhya Pradesh may be taken on record. He stated that only alcoholic liquor meant for human
consumption had been kept out of purview of GST and the content of alcohol in ENA, which is
95%, makes it clear that it is not alcohol meant for human consumption. He further stated that
the Hon’ble High Court of Allahabad had held in the case of M/s Jain Distillery that after the 101st
Amendment to the Constitution, the states had no legislative competence to levy tax on ENA. He
opposed the proposal to tax ENA based on end use and stated that earlier the Council had
discouraged the same. He stated that there might be a possibility of tax evasion in case of differential
tax structure on ENA.
5.41 The Hon’ble Member from Punjab, while welcoming the proposal to not tax ENA meant for
use in production of alcohol for human consumption under GST, observed that it might lead to tax
evasion as it would be difficult to differentiate ENA which would be put to multiple uses.
5.42 The Hon’ble Members from Goa, Meghalaya, Himachal Pradesh, Chhattisgarh,
Maharashtra, Uttar Pradesh and West Bengal supported the proposal. The Hon’ble Member from
Himachal Pradesh also recommended exempting ENA from GST irrespective of end use.
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Decision: The Council approved the proposal to keep ENA for use in manufacture of
alcoholic liquor for human consumption out of the ambit of GST, to place the intent of the
Council before the Hon’ble Supreme Court and other Courts, to notify rate of 18% for new
tariff line to be created on ENA for industrial use and to reduce the GST rate on molasses from
28% to 5%.

5.43 Joint Secretary, TRU then presented the agenda pertaining to Services as mentioned at
Annexure-IV in the agenda Volume-1. She presented the recommendations made by the Fitment
Committee for making changes in GST rates or for issuing clarifications in relation to services.
5.44 Joint Secretary, TRU informed the Council that a request had been received to notify a
mechanism by which ITC flow would not be restricted in case of the said supply through electronic
commerce operator (ECO) from two Companies supplying passenger transport services by AC
buses. She informed that the liability to pay tax in respect of passenger transportation services has
been shifted from bus operator to the ecommerce operator (ECO) w.e.f 01.01.2022. She further
informed that these companies had represented that they supply services through ECO as well as
directly through own platform or offline mode. However, due to notification of their service under
section 9(5), they were not able to fully utilize their ITC. Accumulation of ITC was more
pronounced in case of electric buses which were two or three times costlier than ordinary buses. She
explained that the said services were notified under section 9(5) as a trade facilitation measure as
most of the bus operators supplying service through ECO owned one or two buses and were not in a
position to take registration and meet GST compliance requirements. She stated that to arrive at a
balance between the need of small operators for ease of doing business and the need of large
organized players to take ITC, Fitment Committee had recommended that bus operators organized
as companies supplying passenger transport services could be excluded from the purview of Section
9(5) of the CGST Act, 2017. She also stated that during the examination of the issue the Fitment
Committee had found that GST rate of 5% for the said services with credit of input services in the
same line of business was leading to inversion of tax and credit accumulation. She informed the
Council that one of the reasons for the same was that input services in the same line of business
attracted GST at rates higher than 5%. She stated that the Fitment committee had further
recommended that where GST on input service in the same line of business is payable/paid by the
supplier of input service at a rate higher than 5%, the supplier of passenger transport service by
any motor vehicle would be entitled to ITC only to the extent of such amount of GST as would have
been payable on the input service in the same line of business at the rate of 5%.
5.45 Further she stated that, presently the same line of business has been described in the entry as
“service procured from another service provider of transporting passengers in a motor vehicle or
renting of a motor vehicle”. Fitment Committee recommended that it may be clarified through a
circular that input services in same line of business include transport of passengers (SAC 9965) or
renting of motor vehicle with operator (SAC 9966) and not leasing of motor vehicles without
operator (9973), which attracts GST at the same rate as sale of motor vehicles, that is, 28% plus
compensation cess.
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Decision: The Council approved the recommendations of the Fitment Committee that,-
a. Bus operators organised as companies may be excluded from the purview of section 9(5) of
the CGST Act, 2017;
b. Where GST on input service in the same line of business is payable/paid by the supplier of
input service at a rate higher than 5%, the supplier of passenger transport service by any
motor vehicle would be entitled to ITC only to the extent of such amount of GST as would
have been payable on the input service in the same line of business at the rate of 5%;
c. a circular may be issued to clarify the scope of ‘input services in the same line of business’
for entities supplying passenger transport service by vehicles as above.

5.46 Joint Secretary, TRU presented the next item that pertained to clarification as to whether
reimbursement of electricity charges received by the Real estate companies, malls, airport operators
etc. from their lessees/occupants is exempt from GST. She stated that the Fitment Committee had
recommended that whenever electricity was supplied bundled with other supplies such as renting of
immovable property services, maintenance services, etc. it would be taxed as a composite supply
even in cases where electricity bill was shown separately. However where electricity was being
supplied by the RWAs or real estate owner as a pure agent, the same would not form a part of the
value of supply. She further stated that the issue was discussed in the Officers’ meeting and
there was a request that resident welfare associations should be deemed to be pure agents for the
said purpose where they charge for electricity on actual basis as they may not be able to comply
with all the procedures, condition required to be a pure agent and this was agreed to by all
members.
5.47 The Hon’ble Member from Maharashtra suggested that if any other charges were being
collected with electricity, only those charges should be taxed and not the electricity charges as it
would amount to double taxation.
5.48 The Secretary clarified in respect to agenda regarding reimbursement of electricity
charges that the exemption would be available as long as actual charges were being reimbursed to
Resident Welfare Association or any other body even in the absence of meters.
Decision: The Council approved the issue of clarification as recommended by the Fitment
Committee and that where electricity was being supplied by the RWAs or real estate owner as
a pure agent, the same would not form a part of the value of supply. The Council also
approved the recommendation that a resident welfare association or real estate owner or
developer etc. should be deemed to be pure agent for the said purpose, as long as it charges for
electricity on actual basis the amount payable to electricity distribution company or electricity
supplier.
5.49 The next item presented by Joint Secretary, TRU was regarding exemption of services
provided by District Mineral Foundation (DMF) from GST. She stated that the Fitment Committee
had recommended to clarify that DMF is a governmental authority and thus eligible for all
exemptions available to governmental authorities. She further informed that the issue was discussed
in the Officer’s meeting and no objections were raised.
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Decision: The Council agreed with the said recommendation of the Fitment Committee.

5.50 Joint Secretary, TRU then presented the next item which was to clarify whether the job
work of converting “Barley” into “Malted Barley” amounts to job work services in relation to
food and food products which attracts GST at 5% or job work services in relation to manufacture of
alcoholic liquor for human consumption which attracts GST at 18%. She stated that Fitment
Committee had recommended to clarify that job work services in relation to manufacture of malt
are covered by the entry at Sl. No. 26 (i) (f) which covers job work in relation to all food and food
products falling under chapters 1 to 22 of the customs tariff.
Decision: The Council agreed with the said recommendation of the Fitment Committee to
clarify that job work services in relation to manufacture of malt are covered by entry at
S.No.26(i)(f) irrespective of end use of the malt.
5.51 Joint Secretary, TRU informed the Council that the next agenda item was to specify a
positive list of services under Sr. No. 3 & 3A of notification No. 12/2017-Central Tax (Rate). She
stated that this issue was discussed in earlier Council meetings and Fitment was asked to examine
whether there was a need to prune the list of exempt supplies of pure services or composite supplies
by way of activity in relation to functions listed in Articles 243G and 243W of the Constitution of
India when supplied to Central Government, State Government or Local authority. However, during
previous discussions on the same, states had opined that the list should continue as it exists. She
stated that the Fitment Committee had recommended to maintain the existing list of services in 3
and 3A of Notification No. 12/2017 CTR dated 28.06.2017.
5.52 She further stated that prior to 01.01.2022, the exemption also covered services
supplied to Governmental authority and Governmental entities also. The Fitment Committee had also
recommended to create a new entry to exempt the following five services supplied to Governmental
Authority:
• Water Supply
• Public health
• Sanitation Conservancy
• Solid waste management
• Slum improvement and upgradation

5.53 The Hon’ble Member from Delhi appreciated the recommendation of the Fitment
Committee to not prune the list and requested that in addition to the five services recommended by
the Fitment Committee, an entry may be made to include services relating to education provided to
governmental authorities.
5.54 The Hon’ble Member from Andhra Pradesh stated that the recommendation limited the
exemption to the said five services by governmental authorities. He stated that the Urban
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Development Authorities also perform the functions of local bodies. He listed out some functions
performed by Urban Development Authorities viz., provision of urban amenities and facilities such
as parks, gardens, playgrounds, street lighting, parking lots, bus stops etc. that urban development
authorities have similar responsibilities as local authorities. He said that the proposal would see the
urban bodies being taxed on the same services that the local bodies were being exempted from. He
further stated that the tax rate of 18% imposed a huge burden on these bodies which were already
reeling under severe dearth of revenues. He requested that the exemptions under the proposal may
be broadened to include all governmental authorities other than those providing purely commercial
activities.
5.55 The Secretary clarified that the issue of whether an Urban Development Authority is a
governmental authority or a local authority is a separate agenda which had been deferred by the
Fitment Committee and the Council may decide the same after the Fitment Committee has
examined and given its recommendations on the issue. He stated that there was a difference in the
way entities such as government, governmental authorities, public authorities, local bodies, etc. and
other entities were taxed and similarly there is a disparity in taxation of goods and services being
supplied to such bodies. He stated that this was inherited from the pre-GST era and would have to be
looked into.
5.56 The Hon’ble Member from Andhra Pradesh stated that HR cost was high for local
bodies and they were mainly recruiting through outsourcing. The purpose of outsourcing was to
reduce the burden on the exchequer as compared to regular recruitment. He stated that the same
would be defeated if the said exemption is not brought about.
5.57 The Hon’ble Member from Karnataka stated that he welcomed the proposal however he
agreed with the Hon’ble Member from Andhra Pradesh. He said that the issue of exempting Urban
development authorities may be examined by the Fitment committee and discussed in the Council.
5.58 The Secretary agreed to the same and reiterated that the said matter was already before
the Fitment Committee and urged the Fitment Committee to expedite examining the same.
5.59 The Hon’ble Member from Andhra Pradesh stated that there are four categories namely
Government, Governmental authorities, Local government and Government entities. Pure definition
of local government includes only panchayats, Zilla parishads, Municipalities, etc. The Urban
Development authorities come under Government authorities therefore this had to be read with
separately.
5.60 The Secretary stated that there was a request from Delhi Development Authority to
clarify whether they were a governmental authority and once the same is decided the same will be
clarified for other bodies of similar nature. He informed that there was an agenda for deciding on the
same which had been deferred by the Fitment Committee and once the same was decided the
present issues being raised by the Hon’ble Members would be resolved.
5.61 The Hon’ble Member from Andhra Pradesh quoted 2(69) of the CGST Act 2017,
wherein Local authority is defined and stated that the same did not include Urban development
authority. He requested that a comprehensive view may be taken on this issue.
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5.62 The Hon’ble Chairperson remarked that as pointed out by the Hon’ble Member from
Andhra Pradesh the Urban Development Authorities were separate from Local authorities as per the
GST Law as well as by common understanding and hence the issue of Urban Development
authorities should be examined separately. She urged the Fitment Committee to examine the issue of
all similar bodies as early as possible.
5.63 The Hon’ble Member from Delhi stated that there were two issues to be considered;
what constituted a governmental authority and whether governmental authority should be treated at
par with government and local authority. She further stated that while government and local
authority is exempted, in case of governmental authorities a list of exempted services is being
specified. She requested that the Fitment Committee may also examine whether governmental
authorities can be treated at par with Government and Local authority.
5.64 The Hon’ble Member from Maharashtra stated that the issue in the agenda was pending
for long and hence a decision may be taken recommending the same. Any additions could be made
later.
5.65 The Hon’ble Chairperson clarified that the agenda would be cleared as all the members
were in agreement with the same and the concerns raised by the Hon’ble Members would be
examined by the Fitment Committee. She also stated that the Council had taken a position on the
matter discussed which was aligned with the legal position in the pre-GST era and expressed hope
that the Council would take that into cognizance.
5.66 The Hon’ble Member from Meghalaya requested that since the Fitment Committee was
looking into the issue of local authorities, the matter of District Councils which are prevalent in
North-east -, may be looked into as well.
5.67 The Hon’ble Chairperson agreed that the same should be examined by the Fitment
Committee.
Decision: The Council approved the recommendations of the Fitment Committee to retain the
entries at S. Nos. 3 and 3A of notification No.12/2017-CTR and for creation of a new entry to
exempt five specified services supplied to Governmental authority.

5.68 Joint Secretary, TRU then presented the next agenda item which was a request to bring
supplies made by Indian Railways (IR) under forward charge mechanism from the existing reverse
charge mechanism. She informed the Council that presently only the transportation of goods and
services provided by Railways is under forward charge and other services such as grant of catering
licenses, renting of immovable properties and sale of used and old goods, etc are under reverse
charge mechanism. She further informed that this was leading to blockage of ITC and has resulted in
Railways accumulating substantial credit. She stated that the Fitment Committee had recommended
that all goods and services supplied by Indian Railways may be brought under forward charge. She
further stated that certain exemptions on services supplied by government (which included IR) to
individuals, unregistered business entities having turnover below the registration threshold, services
valued at Rs. 5000 or less (Rs. 5000 in a year in case of continuous supply of service) have been
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given so as to ensure that individuals or small unregistered businesses are not required to take
registration to pay GST on them under RCM. Similarly, services by Central Government, State
Government, Union Territory or local authority to another Central Government, State Government,
Union Territory or local authority have been exempted as services supplied by Central Government,
State Government, Union Territory or local authority have been exempted as services supplied by
Central Government, State Government Union Territory or local authority are generally under
Reverse Charge Mechanism (RCM). She stated that if the Council were to decide to tax all goods
and services supplied by Indian Railways under forward charge, Indian Railways may be excluded
from the above exemptions; otherwise, it would defeat the purpose of bringing all supplies of Indian
Railways under forward charge mechanism. Accordingly, it was recommended by the Fitment
Committee that
i. All goods and services supplied by Indian Railways may be brought under forward
charge.
ii. Indian Railways may be excluded from the aforesaid exemptions.
5.69 She informed that the proposal was discussed in the Officers’ meeting and no objections
were raised.
Decision: The Council approved the recommendation of the Fitment Committee to bring the
supplies of all goods and services made by Indian Railways under forward charge mechanism
from the existing reverse charge mechanism and Indian Railways may be excluded from the
exemptions available for services supplied by Central Government as recommended by the
Fitment Committee.

5.70 Joint Secretary, TRU informed that the next item was a request received from CAMPCO
seeking clarification on entry 54(g) of 12/2017-CT(R) dated 28.06.2017 with regard to the scope of
exemption for commission agent in facilitating the sale of agricultural produce. She informed that
the Fitment Committee had recommended that since this issue pertained to only a single party and
was not a general issue impacting many states, CAMPCO may be advised to approach the Authority
for Advance Ruling. She stated that this was discussed in the officers’ meeting and concurred with
by all the officers.
5.71 Joint Secretary, TRU informed that the next item was issuance of clarification on the
applicability of GST on Horticulture Contracts of CPWD. She stated that the Fitment Committee
had recommended to clarify that supply of pure services and composite supply of
horticulture/horticulture works (where the value of goods constitutes not more than 25 per cent of
the total value of supply) to CPWD are exempt from GST under Sr. No. 3 and 3A as they exist
today. She further stated that the said matter was discussed in the Officers’ meeting and there were
no objections.
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Decision: The Council approved the recommendation of the Fitment Committee regarding
the clarification on applicability of GST on Horticultural Contracts supplied to CPWD.
5.72 Joint Secretary, TRU informed that the next agenda item was proposed amendments to
notification No. 11/2017-CT(R) dated 28.6.2017 consequent to amendment of CGST Act, 2017.
She stated that these were of a technical nature as there were certain entries under services which
refer to actionable claims. The GST Council has decided to tax specified actionable claims as
goods. She said that the recommendation was to revise those entries so that they were in line with
the Council’s decision to tax the specified actionable claims as goods and also to make consequential
changes to entries in the scheme of classification. She stated that the proposal was to amend Sl. No.
34 (iv), (v) of services rate notification No. 11/2017-CT(R) dated 28.06.2017 and to carry out
consequential amendments in the classification of services and explanatory notes.
Decision: The Council approved the recommendation of the Fitment Committee to amend
services rate notification No. 11/2017-CT(R) dated 28.06.2017.
5.73 The Joint Secretary, TRU informed that the next agenda pertained to declaring Delhi
Development Authority as a Local Authority for the purposes of GST. She stated that the matter was
already discussed during the discussion specifying a positive list of services under Sr No. 3 & 3A of
notification No. 12/2017- Central Tax ( Rate). She informed that the Fitment Committee had
recommended for deferring the issue as it required detailed examination.
Decision: The Council approved the Fitment Committee’s recommendation. It also directed
that the Fitment Committee examine all similarly placed bodies/authorities expeditiously.

5.74 The Joint Secretary, TRU then presented the next agenda pertaining to clarification of
whether service by way of hostel accommodation, service apartments /hotels booked for longer
period is a service of renting of residential dwelling for use as residence and exempted as per entry
no. 12 of the notification No. 12/2017-CT (Rate) dated 28/06/2017. She stated that the
accommodation services under heading 9963 by a hotel, inn, guest house, club or campsite by
whatever name called, having declared tariff of a unit below one thousand rupees per day or
equivalent were exempt till 17.07.2022 vide entry no. 14 of the notification No. 12/2017-CT(R)
dated 28.06.2017. Hostels and hotels were claiming the said exemption. However, vide the
amendment notification No. 04/2022- CT(Rate) dated 13.07.2022, the exemption to hotel
accommodation having per day charges below Rs. 1000/- has been withdrawn w.e.f. 18/07/2022 and
the said supply is now made taxable at 12% by the notification No. 03/2022-CT (Rate) dated
13.07.2022. Currently, hotel accommodation having value of supply less than or equal to Rs.
7500 per unit per day attracts 12% whereas those having value of supply more than Rs. 7500 per
unit per day attracts 18%. She further stated that there was a request for GST exemption on hostels
for poor and middle- class students run by charitable trusts. She informed that Circular No.
354/17/2018-TRU dated 12.02.2018 at its point no. 1 has considered the hostel accommodation at
par with the hotel accommodation. She informed the Council that post 17/07/2022, hostels were
not eligible to claim exemption under entry no. 14 of the notification No. 12/2017-CT(R) dated
28.06.2017. She stated that hostels were now claiming exemption applicable to renting of residential
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dwelling for use as residence (Sl. No. 12 of notification No. 12/2017 - CTR). She further informed
the Council that there had been some litigation on the issue and the decision by Hon’ble Karnataka
High Court that residential dwelling includes hostels has been appealed against and the matter was
pending before the Hon’ble Supreme Court of India. She stated that the recommendation of the
Fitment Committee was to clarify that the exemption to renting of residential dwelling for use as
residence did not cover hostels or paying guest accommodations and the like.
5.75 The Hon’ble Member from Maharashtra suggested that the matter may be deferred as
hostels were mainly meant for students many of whom were poor and coming from rural areas to
urban areas for educational purposes. He stated that concessions should be considered in such cases.
5.76 The Hon’ble Members from Goa, Chhattisgarh, Meghalaya and West Bengal supported the
suggestion by the Hon’ble Member from Maharashtra.
Decision: The Council decided to defer the issue for further examination.

5.77 Joint Secretary, TRU then presented the issues pertaining to services mentioned in
Annexure-V where the Fitment Committee had recommended for no change.
5.78 She stated that the first agenda item in Annexure V pertained to proposal to apply uniform
GST rate of 5% on Business Correspondent services provided in both rural and urban areas. She
stated that the issue was examined by the Fitment Committee and it was felt that the specific
exemption provided by Business Correspondents to banking companies in respect of rural area
branches has been given in line with the objectives of financial inclusion and therefore, the Fitment
Committee had recommended to maintain status quo.
Decision: The Council approved the recommendation of the Fitment Committee for rejecting
the proposal for uniform GST rate of 5% on Business Correspondent services provided in both
urban and rural areas.

5.79 Joint Secretary, TRU then presented the issue mentioned at Sr. No. 2 of Annexure-V of
Agenda No. 4(e) regarding request to bring renting of residential dwellings by registered persons to
registered persons under Forward Charge Mechanism where the Fitment Committee had
recommended to maintain status quo as no real life examples or difficulties in implementation of the
said notification were brought to notice
Decision: The Council approved the recommendation of the Fitment Committee.
5.80 Joint Secretary, TRU then presented the issue regarding request to clarify that 'sale of
land' includes assignment of leasehold rights in such land and stated that Fitment Committee
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examined the issue and recommended that the request be not acceded to because sale of land and
assignment of leasehold rights are not one and the same thing and the question of lease of land
being covered under entry 5 of Schedule III which deals with sale of land and building does not
arise. She stated that the agenda was also discussed in the officers’ meeting and no objections were
raised.
Decision: The Council approved the recommendation of the Fitment Committee that
assignment of leasehold rights in land is not covered under Entry No. 5 of Schedule III of the
CGST Act, 2017.
5.81 Joint Secretary, TRU then presented the next agenda pertaining to request to provide
exemption from GST on the reassignment of leasehold rights of land where the initial lease was
exempt from GST. She stated that entry at S.No.41 of notification No.12/2017-CTR exempts long
term lease of industrial plots by state government Industrial Development Corporations or
Undertakings etc. but does not cover reassignment or sub-leasing of leasehold rights of land by the
lessee. She further stated that the Fitment Committee did not recommend any change but
recommended referring the issue of whether ITC of lease of land would be available to the Law
Committee for examination.
5.82 The Hon’ble Member from Maharashtra stated that plots allotted to industries through
MIDC are exempt. However, on further transfer, no exemption was available. He requested for
considering exemption as the plots were meant for industrial use only.
5.83 The Hon’ble Member from Goa supported the view of the member from Maharashtra.
5.84 The Secretary stated that presently ITC is not available on reassignment and the officers’
view was that ITC should be available in such cases and further stated that the issue regarding
availability of ITC would be examined by the Law Committee at the earliest and would be brought
before the Council in the next meeting.
Decision: The Council approved the recommendation of Fitment Committee to not exempt
reassignment of leasehold rights of land from GST where the initial lease was exempt from
GST. It also desired that the admissibility of ITC may be examined and put up to the Council.

5.85 Joint Secretary, TRU stated that the next agenda was a request from the state of Nagaland
to keep rate of GST @ 12% on works contract services which commenced prior to 18.07.2022. She
stated that based on the recommendations of the GST Council in its 47th meeting, rate of GST on
works contract services supplied to Central and State Governments for specified projects has been
increased from 12% to 18% and that the Fitment Committee recommended maintaining status quo
as continuing 12% rate for old contracts would lead to complication of tax rate structure.
Decision: The Council approved the recommendations of the Fitment Committee.
5.86 Joint Secretary, TRU then presented the item regarding request to clarify whether GST is
applicable on the statutory collections made by the Real Estate Regulatory Authority (RERA) in
accordance with the RERA Act, 2016
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5.87 The Hon’ble member from Maharashtra suggested that RERA authorities should also be
consulted while deciding the issue.
5.88 The Hon’ble Chairperson clarified that the agenda was deferred and RERA authorities
would be consulted.
Decision: The Council deferred the agenda item for further examination.

5.89 Joint Secretary, TRU then presented the item regarding the proposal of state of Punjab
requested to levy GST on renting of commercial property on RCM basis and stated that the same
was agreed to be deferred in the Officers’ meeting as Punjab’s view was not considered in the
Fitment Committee and sought permission of the Council to defer the issue.
Decision: The Council deferred the agenda item for further examination.

5.90 Joint Secretary, TRU then stated that 10 issues as mentioned in Annexure- VI were
recommended to be deferred by the Fitment Committee further examination.
Decision: The Council agreed with the recommendations.

6. Agenda Item 5: 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 1st quarter of the F.Y 2023-24.
6.1 The Secretary presented the Agenda No. 5 regarding Performance Report of Competition
Commission of India (CCI) 1st quarter of the F.Y 2023-24 along with the Performance Report of
State Level Screening Committee (SLSC), Standing Committee (SC) and Directorate General of
Anti- Profiteering (DGAP) for the information of the Council.
Decision: The Council took note of the same and approved the Agenda

7. Agenda Item 6: Ad-hoc Exemptions Orders issued under Section 25(2) of the Customs
Act, 1962 to be placed before the GST Council for information

7.1 The Joint Secretary, GST Council Secretariat presented the Agenda No. 6 i.e., Ad-hoc
exemption orders issued under Section 25(2) of the Customs Act, 1962 to be placed before
GST Council for information. She informed that in the 26th meeting of the GST Council held on
10.03. 2018, it was decided that all the ad-hoc exemption orders issued with the approval of the
Hon’ble Finance Minister as per the guidelines contained in Circular No. 09/2014-Customs dated
19.08.2014 as was the case prior to the implementation of GST, shall be placed before the GST
Council for information.
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7.2 The Joint Secretary, GST Council Secretariat informed the Council that three Ad-hoc
exemption orders had been issued since last meeting of the GST Council. The First Order No. 06 of
2023 dated 28/08/2023 pertained to Request from Disaster Management Division (DMD), MHA,
for Ad hoc exemption for import of instruments for implementation of pilot project on Glacial Lake
Outburst Flood (GLOF) risk in Sikkim. The second Order No. 07 of 2023 dated 29/08/2023 was
regarding request from Department of School Education & Literacy, Ministry of Education for Ad
hoc exemption for import of 1.15 million footballs for distribution amongst Schools in India and
the third Order No 08 of 2023 was regarding request from the Ministry of External Affairs for Ad
hoc exemption for import of Dornier Engines to be exported to Seychelles.
Decision: The Council took note of the ad-hoc exemption orders issued.

8. Agenda Item 7: Review of revenue position under Goods and Services Tax
8.1 The Joint Secretary, Department of Revenue presented the Agenda to the Council. He
stated that a good growth rate was being seen on the GST front but the growth on IGST on import
of goods had been subdued. He informed the Council that there had been an overall growth of 11%
in the gross GST revenues. He presented to the Council the details of GST revenue and stated that
the GST revenues had been approximately 1.6 lakh crores from April to August in FY 2023- 24. He
further informed that the GST revenues for the month of September had also crossed 1.6 lakh
crores. He presented to the Council the details of IGST settlement and informed that the IGST
settled was slightly more than what was collected. He then presented the details of
Compensation Cess collected since the implementation of GST till July 2023 and the
compensation released till September 2023. He presented the status of the receipt and processing of
AG’s certificate from the States for release of compensation.
8.2 The Hon’ble Member from Karnataka requested the Centre to expedite the process at the
CAG office as well.
8.3 The Hon’ble Chairperson urged the States yet to submit the AG’s certificate to expedite the
process. She also assured that the process at CAG will be expedited.
8.4 The Joint Secretary, Department of Revenue then presented the data pertaining to the
percentage of filing and informed the Council that the filing percentage was good and there was no
concern in the same.
8.5 The Hon’ble Member from Karnataka stated that they had made a written request for a
discussion on cess and surcharge collection. He further elaborated that the intent of the request was
to understand the repayment schedule of the loans taken to pay compensation to states and the
status of Compensation Cess post repayment of the loans. He stated that levy of cesses and
surcharges were justified on the basis of need to pay compensation to States for loss of revenue.
He informed that Karnataka had a robust collection of cess and surcharges which had seen a growth
of around Rs 2000 crores in the current year as compared to the same period in the previous year.
He stated that if the trend was the same across the country then the loans may be repaid at an earlier
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date and post repayment, the levy of cesses and surcharges would lapse. He expressed that
Karnataka’s intent was for cesses to continue and requested for a detailed study on the issue.

8.6 The Secretary agreed to the observations by the Hon’ble Member from Karnataka and
stated that there was time till 2026 for repayment of loans.
8.7 The Hon’ble Chairperson clarified that while post March 2026, Compensation cess could
not be collected based on the Compensation to States Act, 2017, the Council had the prerogative to
devise some mechanism to collect cess.
8.8 The Hon’ble Member from Karnataka sought an initiation of debate and discussion on this
for perspective planning. He requested the Secretariat to present details of the borrowings, growth
in cess and estimated repayment schedule of loan factoring in the growth in cess in the next
meeting.
8.9 The Secretary agreed to provide the same. He brought to the notice of the Council that
there was a certain amount of surplus IGST every month / quarter. He informed the Council
that presently 50 percent was being allotted to Centre and the remaining was being distributed
between the States on the basis of their revenues during 2015-16. He stated that there had been
changes in the proportion of revenues of the States and submitted for the consideration of the
Council if there was a need to revise the base year.
8.10 The Hon’ble Chairperson stated that this was a matter that required extensive study and
that the devolution of surplus IGST and levy of cess post March 2026 would be studied in
detail and discussed in Council.
8.11 The Hon’ble Member from Kerala stated that the revenue share of Kerala State was not
commensurate with its consumption. He further stated that IGST revenue from various sectors like
online trading, e-commerce, etc. were not properly accruing to the State. He requested for a
detailed examination of the devolution of surplus IGST.
8.12 The Hon’ble Member from Manipur informed the Council that the growth in GST revenues
for the State during April, 2023 was 35%, however due to the violent unrest in the state from
3rd May, 2023 there had been a drastic decline in the growth. He stated that the violence caused
several hindrances such as closure of markets, suspension of e- commerce activities, blockage of
highways, break down of internet, stoppage of construction activities, etc. He stated that those had
resulted in the financial position of the State being very grim. He requested the Hon’ble
Chairperson to provide financial assistance for the State.
Decision : It was decided that a complete picture of the compensation cess, the likely time by
which loan will be repaid and the proposal for tax/cess in lieu of compensation cess post
repayment be presented to the Council.
9. Agenda Item 8: Table Agenda-Exemption from 5% IGST levy for foreign flag foreign
going vessels being operated by an entity not registered under GST in India when it converts
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to coastal run
9.1 Joint Secretary, TRU sought permission of the Chair to introduce a Table Agenda due to the
urgency of the issue. Upon being permitted by the Chair, she stated that the Agenda pertained to a
proposal to exempt foreign flag foreign going vessels from IGST levy when they convert to coastal
run vessels and operate in coastal waters. She informed the Council that reference had been received
from Ministry of Ports, Shipping and Waterways (MoPSW) for granting permission for a cruise ship
to remain and sail as a foreign-run vessel and considered as a conveyance during its deployment in
Indian waters. She stated that presently all goods, vessels, ships imported under lease attract Nil
IGST vide S. No. 557B of 50/2017-Customs, however those foreign vessels that do not enter into a
lease arrangement will have to pay 5% IGST on the full value of the vessel. She further informed
the Council that since foreign vessels were not registered under GST Law, they were not
eligible for input tax credit leading to huge operational cost for them which goes against the idea of
promoting tourism. She referred to the specific case of the Cruise ship Costa Serena as received
from Ministry of Shipping which would have to convert to coastal run for operating the cruises
in coastal waters (Mumbai -Goa- Mumbai and Mumbai-Kochi-Lakshadweep- Mumbai) and they
would be operating in coastal waters for two months. She further stated that since the cruise ship
operator did not intend to enter into a lease arrangement, they would be liable to pay IGST of 5% on
the value of the vessel upon conversion to coastal run. The proposal was to exempt foreign flag
foreign going vessels from levy of IGST subject to the condition that they reconvert to foreign going
vessel within a period of 6 months.

9.2 The Secretary stated that the agenda was received only a few days ago and is being put up as
a table agenda in view of the urgency. It was discussed in Officers’ meeting.
9.3 The Hon’ble Member from Goa welcomed the proposal.
The Council agreed to the said recommendation of the Fitment Committee to exempt foreign
flag, foreign going vessels from 5% IGST levy upon conversion to coastal run subject to the
condition that it reconverts to foreign going vessel within a period of 6 months. However,
applicable duties on stores, fuel etc. will continue to be paid.

10. Agenda Item 9: Agenda Note for notifying supplies and class of registered person
eligible for refund under IGST route.
10.1 The Principal Commissioner, GST Policy Wing stated that the agenda was regarding
amendment of Notification no 1/2023- IGST, dated 31st July, 2023 issued as per the
recommendations of the 50th Council meeting to restrict IGST refund on certain evasion prone
commodities such as Pan masala, Gutkha, etc. based on the report of the Group of Ministers
on capacity-based taxation. He stated that in the 50th Council meeting, it was also recommended
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to notify amendments in section 16(3) and 16(4) of the IGST Act, 2017 made through the Finance
Act, 2021 with effect from 1.10.2023. The amendments provided that the default route of refunds of
unutilised input tax credit in respect of zero rated supply would be LUT mode and IGST refund
would be permitted only for the class of persons or class of goods or services as may be notified by
the Government.
10.2 He informed the Council that the said Notification was issued with effect from
01.10.2023 in accordance with the recommendations of Council which allowed export of all goods
and services as the goods and services on supply of which IGST could be paid and refund obtained
except those export of those goods which had been recommended by the Group of Ministers. He
stated that since supplies to SEZ units or developers were not exports but zero-rated supplies, thus
they were not covered by the said Notification and hence, such supplies are no more eligible with
effect from 01.10.2023 to be made on payment of IGST and subsequent refund of IGST thus paid. to
claim IGST refund. He stated that the only mode of refund available for zero rated supplies to SEZ
units and developers has become the refund of accumulated ITC after issuance of Notification
1/2023 IGST. He informed the council that this was never the intention of the Council and had also
not been recommended by the Group of Ministers. Hence, to remove this anomaly, an amendment
has been proposed in the said notification with effect from 01.10. 2023 to allow IGST refund in case
of zero rated supplies to SEZ units and developers through IGST route. He informed the Council
that in the Officers’ meeting held on 06.10.2023, it was suggested that the goods prone to evasion,
which have been excluded from claiming IGST refund on export, should also be excluded from
IGST refund route for zero rated supplies made to SEZ.
10.3 Accordingly, it was proposed to amend Notification No 01/2023 -IGST, dated 31st July
2023, w.e.f. 01.10.2023 as-
“In exercise of the powers conferred by sub-section (4) of section 16 of the Integrated Goods and
Services Tax Act, 2017 (13 of 2017) (hereafter referred to as the “said Act”), the Central
Government on the recommendations of the Council, hereby notifies
(i) all goods or services (except the goods specified in column (3) of the TABLE below) as the
class of goods or services which may be exported on payment of integrated tax and on
which the supplier of such goods or services may claim the refund of tax so paid; and
(ii) all suppliers (other than suppliers of goods specified in column (3) of the TABLE below) to a
Special Economic Zone developer or a Special Economic Zone unit for authorised operations as the
class of persons who may make supply of goods or services (except the goods specified in column (3)
of the TABLE below) to the Special Economic Zone developer or the Special Economic Zone unit
for authorised operations on payment of integrated tax and on which the said suppliers may claim
the refund of tax so paid:”
Decision: The Council agreed with the said proposal and the recommendation made in the
Officers’ meeting on the draft notification.
11. Agenda Item 10: General Discussion with the permission of the Chair
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11.1 The Hon’ble Member from Bihar during the discussion of Agenda Item pertaining to
clarification on issues related to Place of Supply raised the issue regarding Place of supply for
Online services. He stated that the recent amendment in rule 46(f) of the CGST Rules, 2017 on
‘Online Gaming’ should be made applicable to ‘other Online Services’ as well. He further proposed
that so far as ‘Online Gaming’ was concerned, a proper mechanism be designed so as to capture the
place of residence of a user/player. He raised his concern over the place of supply in such cases
where user/player of ‘online games’ goes out of the State and plays online games then the State
to which a user/player belongs to loses the revenue while the other State gets the benefit. He
therefore suggested that the mechanism should ascertain/ verify the actual permanent place of
residence of the user/player. He stated that small and underdeveloped states could be losing revenue.
11.2 The Secretary informed that the issue raised by the Hon’ble Member of Bihar was
discussed in the previous Council meeting and based on the recommendation, necessary changes
have been made in the CGST Rules and the requisite notification has been issued. He further
emphasized that necessary changes in the Rules have been made both in respect of ‘Online Games’
as well as ‘Other online Services’. However, ascertaining/verification of the address of
consumer/user/player was the work of enforcement agencies. It was informed that whatever address
has been mentioned by the consumer/user/player, the same address is considered as place of supply
and any stringent measure for providing the proof would be against the interest of consumer
convenience and ease.
11.3 The Hon’ble Chairperson said that it was not legal to consider the consumer /user /player's
original place of residence if they have provided a different address. Moreover, it could not be the
job of the Secretariat to trace the original place of residence of every consumer/user/player.
11.4 The Hon’ble Member from Delhi sought the permission of the Hon’ble Chairperson to
place an agenda before the Council. She stated that the Council had deliberated much on the
issue of taxing online gaming and had arrived at the decision to tax it at 28% from the 1st of
October, 2023. However, she expressed concern on the matter that the Directorate General of GST
Intelligence (DGGI) had sent demand notices of about Rs. 1.5 lakh crore to 80 online gaming
companies, even before the implementation of the decision by the Council. She further stated that
while it could be claimed that the Council decision was a clarification and not a retrospective
taxation, demanding tax for the past years appeared to be in bad faith. She stated that this affects
industry, discourages young entrepreneurs as well as foreign investors. She also stated that the
demand made by DGGI was on every game as opposed to the decision of the Council to tax the
deposit in case of online gaming. She requested that the Council may take a decision that DGGI
should withdraw the said notices issued by them.
11.5 The Hon’ble Member from Goa stated that while they had accepted the decision of the
Council to tax the casinos at 28% and review the decision after six months, it was a matter of
concern to the State of Goa. He stated that DGGI had been conducting raids and issuing notices
demanding tax which was much more than the worth of the casinos. He stated that demanding tax
for the past period amounted to retrospective taxation and would be detrimental to the industry. He
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submitted that the casinos had collected tax at 18% as was the practice in the pre- GST era and paid
the same and the said notices demanded tax that they had not collected. He also stated that as the
State of Goa was heavily dependent on the casino and allied industries, decline in revenue from
them would affect the prosperity of the State. He requested the Council to take measures to withdraw
the notices issued by DGGI and stop demanding tax on past period.
11.6 The Hon’ble Member from West Bengal stated that the matter of retrospective taxation
should be looked into. She stated that it had to be decided whether the industry should be made to
pay what they had not collected. She further requested the Hon’ble Chairperson to allow her to bring
another aspect to the Hon’ble Chairperson’s notice. She pointed out that Bengal had always tried to
contribute towards the growth of GST and also added that she believed that the interest of the people
had always been the foremost while taking any decision in the Council. She requested the Hon’ble
Chairperson to kindly take necessary steps for disbursal of the funds allotted to the State of West
Bengal with respect to MGNREGA and PM Awaas Yojana.
11.7 The Hon’ble Member from Maharashtra agreed with the concerns raised by Goa. He
submitted that taxation should not be retrospective and tax at 28% on online gaming and casinos
should be implemented from this year onwards.
11.8 The Hon’ble Member from Meghalaya agreed with the statements made by Delhi and Goa.
He stated that it was improper to make the industry pay tax which was not collected by them. He
urged the Council to take a decision to stop such retrospective taxation.
11.9 The Hon’ble Chairperson replied that the concern expressed by the Members regarding
retrospective taxation was legitimate and well taken. However, she clarified that the DGGI was an
independent regulatory body. She assured the Council that the concerns of the Council could be
conveyed to DGGI.
11.10 The Hon’ble Member from Delhi requested the Council to take a decision that the
amendment to taxation of online gaming would not be retrospective as such taxation would kill
the industry.
11.11 The Secretary clarified that the amendment was prospective coming into force from 1st of
October 2023. The notices issued by DGGI for the past period were under the law as it existed
prior to 1st of October 2023 and not a retrospective application of the Council’s decision.
11.12 The Hon’ble Chairperson stated that the Council represented the country and wanted
investment for the country as well as opportunities for the youth. She stated that it is never the intent
of the Council to kill an industry. However, all industries are to be regulated. She further stated that
the Council shall take decisions to generate income from industries including sunrise industries.
11.13 The Secretary thanked the Hon’ble Chairperson and the Members of the Council for their
contribution in the meeting.
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Annexure-1
List of Hon'ble Members/Ministers from the States/UTs who participated in the 52nd Meeting of the
GST Council held on 07.10.2023
S. No. Name of States
Name of Hon'ble
Ministers/Member of GST
Council
Designation
1 GOI Smt. Nirmala Sitharaman Union Finance Minister
2 GOI Shri Pankaj Chaudhary Minister of State for Finance
3 Andhra Pradesh Shri Buggana Rajendranath
Minister for Finance, Planning,
Legislative Affairs, Commercial
Taxes and Skill Development &
Training
4 Assam Smt. Ajanta Neog Finance Minister
5 Bihar Shri Vijay Kumar Chaudhary Minister for Commercial Tax
6 Chhattisgarh Shri T.S.Singh Deo Deputy Chief Minister
7 Delhi Smt. Atishi Marlena Finance Minister
8 Goa Dr. Pramod Sawant Chief Minister/Finance Minister
9 Goa Shri Mauvin Godinho
Minister for Industries, Transport,
Panchayati Raj and Protocol
10 Gujarat Shri Kanubhai Desai Minister for Finance
11 Himachal Pradesh Shri Harshwardhan Chauhan Industries Minister
12
Jammu and
Kashmir
Shri Rajeev Rai Bhatnagar
Advisor to Hon'ble Lieutenant
Governor, UT of J&K
13 Karnataka Shri Krishna Byre Gowda Minister for Revenue Department
14 Kerala Shri K. N. Balagopal Finance Minister
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15 Maharashtra Shri Deepak Vasant Kesarkar
Cabinet Minister for Ministry of
Education and Ministry of Marathi
Language
16 Manipur Dr. Sapam Ranjan Singh
Minister for Medical, Health &
Family Welfare Department and
Publicity & Information Department
17 Meghalaya Shri Conrad K. Sangma Chief Minister
18 Odisha Shri Bikram Keshari Arukha Minister for Finance
19 Punjab Shri Harpal Singh Cheema Finance Minister
20 Tamil Nadu Shri Thangam Thennarasu
Minister for Finance and Human
Resources Management
21 Uttar Pradesh Shri Suresh Kumar Khanna
Minister of Finance, Parliamentary
Affairs
22 West Bengal Smt. Chandrima Bhattacharya Minister of State for Finance











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Annexure-2
List of officers from the Centre and the States/UTs who attended the 52nd Meeting of the GST
Council held on 07.10.2023
S.No.
Name of
State/CBIC/GSTC/GOI/
GSTN/DoR/TRU/POLICY
WING
Guest's Name Designation
1
DoR Shri Sanjay Malhotra Revenue Secretary
2
CBIC Shri Sanjay Kumar Agarwal Chairman CBIC
3
CBIC Shri Rajiv Talwar
Member(Compliance
Management)
4
CBIC Shri Shashank Priya Member (GST)
5
CBIC Shri Vivek Ranjan Member (Tax Policy and Legal)
6
DOR Shri Vivek Aggarwal Additional Secretary (Revenue)
7
DOR Shri Ritvik Pandey Joint Secretary (Revenue)
8
DG Systems (CBIC) Yogendra Garg Director General Systems CBIC
9
GST POLICY WING Shri Sanjay Mangal Principal Commissioner
10
GST Council Secretariat Shri Pankaj Kumar Singh
Additional Secretary (GST
Council Secretariat)
11
GST Council Secretariat Ms. Ashima Bansal Joint Secretary
12
GSTN Shri Manish Kumar Sinha CEO
13
GSTN Shri Dheeraj Rastogi EVP
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14
TRU Ms. Limatula Yaden Joint Secretrary
15
DoR Dr. N Gandhi Kumar Director (State Taxes)
16
TRU Shri. Pramod Kumar OSD Commissioner in-situ
17
DoR Shri Deepak Kapoor OSD to Revenue Secretary
18
CBIC Shri Aditya Bhardwaj OSD to Chairman
19
Government of India Shri S.S. Nakul, IAS PS to FM
20
Government of India Shri Vishnu Singh PA to FM
21
Government of India Shri Ankit Jalan Additional PS to FM
22
Government of India Shri Alkesh Uttam OSD to MoS
23
Government of India
Shri Dhruv Narayan
Srivastava
1ST PA to MoS
24
DoR Shri Vikas Kumar OSD ( State Taxes)
25
DoR Ms. Mamta Yadav Assistant Secretary
26
DoR Shri Ravi Kumar Meena Assistant Secretary
27
DoR Shri Rinku Assistant Secretary
28
GST POLICY WING Shri Raghavendra Pal Singh Additional Commissioner
29
GST POLICY WING Dr. Gurbaz Sandhu Additional Commissioner
30
GST POLICY WING Shrunkhala Kangale Additional Commissioner
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31
TRU Rakesh Dahiya DS, TRU-I
32 TRU Ms Amreeta Titus DS, TRU-I
33 TRU Ms. Puneeta Bedi OSD
34 GSTN Siddharth Jain Joint Commissioner
35 GSTN Shri Naveen Agrawal OSD to CEO
36 TRU Shri Vikram Wanere Under Secretary, TRU-I
37 TRU Ms. Smita Roy Technical Officer, TRU-II
38 MoS Finance Shri Gaurav Shukla Under Secretary
39 GST POLICY WING Neha Yadav Deputy Commissioner
40 GST POLICY WING Amit Samdariya Deputy Commissioner
41 GST POLICY WING Soumya Deputy Commissioner
42 TRU Ms. Anna Sosa Thomas Technical Officer, TRU-II
43 NACIN Shri Vivek Jain Director
44 NACIN Shri Harsh Parashar Officer on Training
45 NACIN Shri Saahil Khare Officer on Training
46 NACIN Ms. Akshita Srivastava Officer on Training
47 NACIN Shri Vishal Chaudhary Officer on Training
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48 NACIN Shri Shreyansh Surana Officer on Training
49 PIB Ms. Nanu Bhasin ADG (M&C), MoF
50 PIB Shri. Virat Majboor JD, MoF
51 PIB Shri. Kush Mohan Nahar M&CO, MoF
52 GST Council Secretariat Shri Kshitendra Verma Director
53 GST Council Secretariat Shri S.S.Shardool Director
54 GST Council Secretariat Shri Joginder Singh Mor Under Secretary
55 GST Council Secretariat Ms. Subhaga Ann Varghese Under Secretary
56 GST Council Secretariat Ms. Sonia Superintendent
57 GST Council Secretariat Shri Dharambir Superintendent
58 GST Council Secretariat Shri Vineet Kumar Superintendent
59 GST Council Secretariat Shri Naveen Kumar Superintendent
60 GST Council Secretariat Shri Mohan Lal Superintendent
61 GST Council Secretariat Ms. Ambika Rani Superintendent
62 GST Council Secretariat Shri Niranjan Kishore Superintendent
63 GST Council Secretariat Shri Om Ram Meena Section Officer
64 GST Council Secretariat Shri Sandeep Kumar Superintendent
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65 GST Council Secretariat Shri Khupmang Neihsial Superintendent
66 GST Council Secretariat Shri Himanshu Bhardwaj Superintendent
67 GST Council Secretariat Shri Sudhir Kumar Section Officer
68 GST Council Secretariat Shri L. Seikholen Haokip Section Officer
69 GST Council Secretariat Shri Vijay Malik Inspector
70 GST Council Secretariat Shri Padam Singh Inspector
71 GST Council Secretariat Shri Ashwani Sharma Inspector
72 GST Council Secretariat Shri Anand Singh Inspector
73 GST Council Secretariat Shri Karan Arora Inspector
74 GST Council Secretariat Shri Tarun Inspector
75 GST Council Secretariat Shri Pankaj Dhaka Tax Assistant
76 GST Council Secretariat Shri Paresh Garg Tax Assistant
77 GST Council Secretariat Shri Shyam Bihari Meena Tax Assistant
78 GST Council Secretariat Shri Vikas Kumar
Tax Assistant
80 Andhra Pradesh Shri N. Gulzar Secretary Finance(CT)
81 Andhra Pradesh Sri JVM. Sarma
Additional Commissioner (ST),
Appellate Tribunal
82 Arunachal Pradesh Shri Lobsang Tsering
Commissioner (Tax, Excise &
Narcotics)
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83 Arunachal Pradesh Shri Nakut Padung
Superintendent (Tax, Excise &
Narcotics)
84 Assam Shri Rakesh Agarwalla
Principal Commissioner of State
Tax
85 Assam Shri Brinchi Das PS to Hon’ble Minister
86 Bihar Dr. Pratima
Commissioner cum Secretary
Commercial Taxes
87 Bihar Shri Krishna Kumar
Joint Secretary, Commercial
Taxes
88 Bihar Shri Binod Kumar Jha
Additional Commissioner State
Tax
89 Bihar Shri Kunal Kashyap Treasury Officer Bihar Bhawan
90 Chandigarh Sh. Vinay Pratap Singh
Deputy Commissioner-cum-
Excise and Taxation
Commissioner
91 Chandigarh Sh. Alok Passi
Asstt. Excise and Taxation
Commissioner
92 Chhattisgarh Shri Himshikhar Gupta
Secretary, Commercial Tax
(State Tax)
93 Chhattisgarh Shri Ritesh Kumar Agrawal Commissionerof State Tax
94 Chhattisgarh Shri Tarun Kiran Deputy Commissioner, State Tax
95 Delhi Shri A Anbarasu
Principal Commissioner (State
Tax)
96 Delhi Shri Awanish Kumar
Special Commissioner (State
Tax)
97 Goa Shri S.S.Gill Commissioner of State Tax
98 Goa Shri Vishant S.N.Gaunekar
Additional Commissioner of
State Tax
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99 Goa Shri Gaurish Kalangutkar OSD to CM
100 Gujarat Shri J.P. Gupta
Additional Chief Secretary,
Finance Department
101 Gujarat Shri Samir Vakil
Chief Commissioner of State
Tax (I/c)
102 Haryana Shri Devinder Singh Kalyan
Principal Secretary to
Government Haryana, Excise
and Taxation Department.
103 Haryana Shri Ashok Kumar Meena
Excise & Taxation
Commissioner-cum-Secretary to
Government
104 Haryana Dr. Hemant Kumar, IRS
Additional Commissioner, GST,
Excise and taxation Department
105 Himachal Pradesh
Shri Bharat Harbans Lal
Khera
Principal Secretary (ST&E)
106 Himachal Pradesh Dr. Yunus
Commissioner State Taxes and
Excise
107 Himachal Pradesh Shri Rakesh Sharma
Additional Commissioner State
Taxes and Excise
108 Jammu and Kashmir Dr. Rashmi Singh Commissioner, State Taxes
109 Jammu and Kashmir Ms. Namrita Dogra
Additional Commissioner, State
Taxes (Admn & Enft)
110 Jharkhand Ms. Vipra Bhal Secretary, Commercial Taxes
111 Jharkhand Shri Santosh Kumar Vatsa
Commissioner, Commercial
Taxes
112 Jharkhand Shri Brajesh Kumar
Assistant Commissioner of State
Taxes
113 Karnataka Ms. C. Shikha Commissioner Commercial Tax
114 Karnataka Dr. Ravi Prasad Additional Commissioner CT
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115 Kerala Shri Patil Ajit Bhagwatrao
Commissioner, State GST
Department
116 Kerala Shri Abraham Renn S
Additional Commissioner-1,
GST Department
117 Kerala Dr. Shyjan D
PS to Hon'ble Minister
(Finance)
118 Madhya Pradesh Shri Lokesh Kumar Jatav Commissioner, Commercial Tax
119 Madhya Pradesh Shri Manoj Kumar Choubey
Additional Commissioner,
Commercial Tax
120 Maharashtra Ms Shaila A
Principal Secretary (Financial
Reforms)
121 Maharashtra Shri Rajeev Kumar Mital Commissioner SGST
122 Maharashtra Shri Anil Bhosle OSD to Hon'ble Minister
123 Maharashtra Shri Manojkumar Narayanwal Deputy Commissioner
124 Manipur Ms. Mercina R. Panmei Commissioner of Taxes
125 Manipur Shri Y. Indrakumar Singh Joint Commissioner of Taxes
126 Meghalaya Shri Sanjay Goyal
Commissioner &
Secretary,Taxation
127 Meghalaya Shri Ramakrishna Chitturi Commissioner of Taxes
128 Meghalaya Shri L Khongsit
Additional Commissioner of
Taxes
129 Meghalaya Shri V R Challam Deputy Commissioner of Taxes
130 Meghalaya Shri Mukesh Kumar OSD to Hon’ble Minister
131 Mizoram Shri R. Zosiamliana Commissioner of State Tax
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132 Mizoram HK Lalhawngliana
Additional Commissioner of
State Tax
133 Nagaland Shri C Lima Imsong
Additional Commissioner of
State Taxes
134 Odisha Shri Vishal Kumar Dev Principal Secretary, Finance
135 Odisha Shri Sanjay Kumar Singh
Chief Commissioner of
Commercial Taxes & GST
136 Odisha Shri Kunu Padhi
Joint Commissioner of CT &
GST (Policy)
137 Odisha Shri Dinakrushna Kar PS to FM
138 Odisha B. Ganesh Liaison Officer
139 Puducherry
Shri L. Mohamed Mansoor

Commissioner of State Tax

140 Puducherry
S. Rewathi

Assistant Commissioner of State
Tax (A&I)

141 Punjab

Shri. Arshdeep Singh Thind


Commissioner of State Tax

142 Punjab Shri Ravneet Khurana
Additional Commissioner of
State Taxes (Audit)
143 Rajasthan Shri Ravi Kumar Surpur
Chief Commissioner of State
Tax
144 Rajasthan Shri Arvind Mishra
Advisor (Additional
Commissioner GST)
145 Tamil Nadu Shri Dheeraj Kumar
Principal
Secretary/Commissioner of
Commercial Taxes
146 Tamil Nadu Thiru G. Nanakumar
Additional Commissioner
(Policy & Public
Relations)(FAC)
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147 Tamil Nadu S. Subhash Chandra Bose Joint Commissioner (Policy)
148 Telangana Smt T.K Sreedevi, I.A.S
Commissioner of Commercial
Taxes
149 Telangana Sri G. Phaneendra Reddy
Additional Commissioner(ST)
(Policy)
150 Telangana Ms. K Rupa Sowmya
Deputy Commissioner State Tax,
Policy
151 Tripura Ms. Rakhi Biswas
TCS-SSG, Chief Commissioner
of State Tax,
152 Tripura Shri Ashin Barman
Assistant Commissioner of
Taxes
153 Uttar Pradesh Shri Nitin Ramesh Gokarn Principal Secretary, State Tax
154 Uttar Pradesh Ms. Ministhy S Commissioner, State Tax
155 Uttar Pradesh Shri Paritosh Kumar Mishra
Deputy Commissioner, State
Tax HQ, Lucknow
156 Uttar Pradesh Shri Amit Pandey PS to Honourable Minister
157 Uttarakhand Dr. Ahmad Iqbal Commissioner of State Tax
158 Uttarakhand Shri Anil Singh Additional Commissioner
159 Uttarakhand Shri Anurag Mishra Joint Commissioner
160 West Bengal Dr. Manoj Pant
Additional Chief Secretary,
Finance Department
161 West Bengal Shri Khalid Aizaz Anwar Commissioner of State Tax
162 West Bengal Shri Rajib Sankar Sengupta
Senior Joint Commissioner of
Revenue
163 West Bengal Shantanu Naha OSD to Minister
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Agenda Item 2: Deemed ratification of the Notifications, Circulars and Orders issued by the
GST Council and decisions of GST Implementation Committee for the information of the
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 deemed ratification by the GST Council. Accordingly, in the 52nd
meeting held on 7th October, 2023, the GST Council had ratified all the notifications, circulars, and
orders issued up to 29.09.2023.

2. In this respect, the following notifications and circulars issued after 29.09.2023 till
14.06.2024 under the GST laws by the Central Government, as available on www.cbic.gov.in, 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.
52/2023-Central Tax
dated 26.10.2023
Seeks to make amendments (Fourth
Amendment, 2023) to the CGST Rules,
2017
2. Notification No.
53/2023-Central Tax
dated 02.11.2023
Seeks to notify a special procedure for
condonation of delay in filing of
appeals against demand orders passed
until 31st March, 2023.
3. Notification No.
54/2023-Central Tax
dated 17.11.2023
Seeks to amend Notification No.
27/2022 dated 26.12.2022 to notify
biometric-based Aadhaar authentication
for GST registration in the State of
Andhra Pradesh.
4. Notification No.
55/2023-Central Tax
dated 20.12.2023
Extension of due date for filing of
return in FORM GSTR-3B for the
month of November, 2023 for the
persons registered in certain districts of
Tamil Nadu.
5. Notification No.
56/2023-Central Tax
dated 28.12.2023
Seeks to extend dates of specified
compliances in exercise of powers
under section 168A of CGST Act
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6. Notification No.
01/2024-Central Tax
dated 05.01.2024
Extension of due date for filing of
return in FORM GSTR-3B for the
month of November, 2023 for the
persons registered in certain districts of
Tamil Nadu.
7. Notification No.
02/2024-Central Tax
dated 05.01.2024
Extension of due date for filing FORM
GSTR-9 and FORM GSTR-9C for the
Financial Year 2022-23 for the persons
registered in certain districts of Tamil
Nadu.
8. Notification No.
03/2024-Central Tax
dated 05.01.2024
Seeks to rescind Notification No.
30/2023-CT dated 31st July, 2023
9. Notification No.
04/2024-Central Tax
dated 05.01.2024
Seeks to notify special procedure to be
followed by a registered person
engaged in manufacturing of certain
goods.
10. Notification No.
06/2024-Central Tax
dated 22.02.2024
Seeks to notify “Public Tech Platform
for Frictionless Credit” as the system
with which information may be shared
by the common portal based on consent
under sub-section (2) of Section 158A
of the Central Goods and Services Tax
Act, 2017.
11. Notification No.
07/2024-Central Tax
dated 08.04.2024
Seeks to provide waiver of interest for
specified registered persons for
specified tax periods
12. Notification No.
08/2024-Central Tax
dated 10.04.2024
Seeks to extend the timeline for
implementation of Notification No.
04/2024-CT dated 05.01.2024 from 1st
April, 2024 to 15th May, 2024
13. Notification No.
09/2024-Central Tax
dated 12.04.2024
Seeks to extend the due date for filing
of FORM GSTR-1, for the month of
March 2024
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Central
Tax (Rate)
1. Notification No.
12/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
11/2017- Central Tax (Rate) dated
28.06.2017.
2. Notification No.
13/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
12/2017- Central Tax (Rate) dated
28.06.2017.
3. Notification No.
14/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
13/2017- Central Tax (Rate) dated
28.06.2017
4. Notification No.
15/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
15/2017- Central Tax (Rate) dated
28.06.2017.
5. Notification No.
16/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
17/2017- Central Tax (Rate) dated
28.06.2017.
6. Notification No.
17/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
01/2017- Central Tax (Rate) dated
28.06.2017.
7. Notification No.
18/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
02/2017- Central Tax (Rate) dated
28.06.2017.
8. Notification No.
19/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
04/2017- Central Tax (Rate) dated
28.06.2017.
9. Notification No.
20/2023-Central Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
05/2017- Central Tax (Rate) dated
28.06.2017.
10. Notification No.
01/2024-Central Tax
(Rate), dated 03.01.2024
Seeks to amend Notification No
01/2017- Central Tax (Rate) dated
28.06.2017
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Notifications
under IGST
Act / IGST
Rules
Integrated
Tax
1. Notification No.
05/2023- Integrated Tax,
dated 26.10.2023
Seeks to notify supplies and class of
registered person eligible for refund
under IGST Route
Integrated
Tax (Rate)
1. Notification No.
15/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
8/2017- Integrated Tax (Rate) dated
28.06.2017.
2. Notification No.
16/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
9/2017- Integrated Tax (Rate) dated
28.06.2017.
3. Notification No.
17/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
10/2017- Integrated Tax (Rate) dated
28.06.2017.
4. Notification No.
18/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
12/2017- Integrated Tax (Rate) dated
28.06.2017.
5. Notification No.
19/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
14/2017- Integrated Tax (Rate) dated
28.06.2017.
6. Notification No.
20/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
01/2017- Integrated Tax (Rate) dated
28.06.2017
7. Notification No.
21/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
02/2017- Integrated Tax (Rate) dated
28.06.2017.
8. Notification No.
22/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
04/2017- Integrated Tax (Rate) dated
28.06.2017.
9. Notification No.
23/2023-Integrated Tax
(Rate), dated 19.10.2023
Seeks to amend Notification No
05/2017- Integrated Tax (Rate) dated
28.06.2017
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10. Notification No.
01/2024-Integrated Tax
(Rate), dated 03.01.2024
Seeks to amend Notification No
05/2017- Integrated Tax (Rate) dated
28.06.2017
Corrigendum dated
05.01.2024
Corrigendum to Notification no
01/2024-Integrated Tax (Rate) dated
03.1.2024
Notifications
under UTGST
Act / UTGST
Rules
Union
Territory
Tax (Rate)
1. Notification No.
12/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
11/2017- Union territory Tax (Rate)
dated 28.06.2017.
2. Notification No.
13/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
12/2017- Union territory Tax (Rate)
dated 28.06.2017.
3. Notification No.
14/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
13/2017- Union territory Tax (Rate)
dated 28.06.2017.
4. Notification No.
15/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
15/2017- Union territory Tax (Rate)
dated 28.06.2017.
5. Notification No.
16/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
17/2017- Union territory Tax (Rate)
dated 28.06.2017.
6. Notification No.
17/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
01/2017- Union Territory Tax (Rate)
dated 28.06.2017.
7. Notification No.
18/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
02/2017- Union Territory Tax (Rate)
dated 28.06.2017.
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8. Notification No.
19/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
04/2017- Union Territory Tax (Rate)
dated 28.06.2017.
9. Notification No.
20/2023- Union
Territory Tax (Rate),
dated 19.10.2023
Seeks to amend Notification No
05/2017- Union Territory Tax (Rate)
dated 28.06.2017.
10. Notification No.
01/2024-Union Territory
Tax (Rate), dated
03.01.2024
Seeks to amend Notification No
05/2017- Union Territory Tax (Rate)
dated 28.06.2017
Corrigendum dated
05.01.2024
Corrigendum to Notification no
01/2024- Union Territory Tax (Rate)
dated 03.1.2024
Circulars under CGST Act
1. Circular No.
202/14/2023-GST dated
27.10.2023
Clarification relating to export of
services – sub-clause (iv) of the Section
2(6) of the IGST Act 2017
2. Circular No.
203/15/2023-GST dated
27.10.2023
Clarification regarding determination of
place of supply in various cases
3. Circular No.
204/16/2023-GST dated
27.10.2023
Clarification on issues pertaining to
taxability of personal guarantee and
corporate guarantee in GST
4. Circular No.
205/17/2023-GST dated
31.10.2023
Clarification regarding GST rate on
imitation zari thread or yarn based on
the recommendation of the GST
Council in its 52nd meeting held on 7th
October, 2023.
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5. Circular No.
206/18/2023-GST dated
31.10.2023
Clarifications regarding applicability of
GST on certain services.


3. It is mentioned that some of the notifications referred in Para 2 above have been issued as per
the recommendations of GST Implementation Committee (GIC). The details of such decisions and the
relevant Notifications and Circulars issued to implement such decisions are enclosed as Annexure
“2A” to this Agenda Note.

4. The GST Council may grant ratification to the notifications and circulars as detailed in para 2
above.


*****
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Annexure- 2A
Decisions of GST Implementation Committee (GIC) for information of the GST Council
The GST implementation Committee (GIC) took certain decisions after the 52nd 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 18.12.2023 on GST data sharing request received from Ministry of
Consumer Affairs, Food & Public Distribution
a. In the agenda note, it was stated that a request had been received from the Department of
Food and Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution seeking
actual sales data (monthly summary) of sugar in the domestic market as per GSTR1 (raw, white,
refined, packaged sugar etc) HSN code-wise for sugar mills for the month of June 2023 and onwards.
The data was being sought in respect of 536 GSTINs as per list furnished by the Department of Food
& Public Distribution.
b. It is further stated that the data was being sought in order to enhance the level of data
accuracy and to ensure that there is sufficient availability of sugar in the market.
c. Accordingly, approval was sought for GST data sharing with the Department of Food and
Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution.
d. Decision: The GIC approved the agenda relating to GST data sharing request received from
the Department of Food and Public Distribution, Ministry of Consumer Affairs, Food & Public
Distribution.
2. Decision of GIC by circulation on 30.12.2023 regarding seeking clarification on various
challenges being faced by trade and extension of time for implementation of Notification No.
30/2023 - Central Tax

a. In the agenda note it was mentioned that based on the recommendation of the GST Council in
its 50th meeting, Central Government has notified the special procedure vide Notification No
30/2023-Central Tax dated 31.07.2023 to be followed by the registered persons of the goods
mentioned in the schedule to the said notification, including pan masala, chewing tobacco, gutkha,
etc. The said special procedure envisages the monthly statement (SRM- IV) and various other details
to be submitted by the concerned registered taxpayer through online mode for which various FORMS
such as SRM-I, SRM-IA, SRM-II A, SRM-IIB, etc. need to be made available on the portal. The
agenda note further states that such online FORMS were not available on the portal at this juncture.

b. It is further mentioned that representations were received from various trade associations and
industry representatives requesting for postponement/ extension of time limit for implementation of
said special procedure notified vide Notification No 30/2023 Central Tax dated 31.07.2023, due to the
unavailability of said FORMs on the portal and also considering numerous other practical challenges
faced by the industry such as unavailability of model number/manufacturer of old and used packing
machines and time required to obtain the said information, segregation of consumption of electricity
between that used for manufacturing of specified goods and that used for other purposes,
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measurement of waste on daily basis, need for clarification about various issues pertaining to
implementation of special procedure etc.

c. It is stated that the above mentioned difficulties were deliberated by the Law Committee in its
meeting dated 31.08.2023/01.09.2023 and the Law Committee recommended that the implementation
of the scheme may be deferred till 1st January 2024 as no functionality had yet been made available on
the portal. The recommendations of the Law Committee were deliberated by the GST Council in its
52nd meeting and as per recommendations of the Council, Notification No.47/2023-CT dated
25.09.2023 was issued vide which the implementation of the said special procedure was deferred till
1st January, 2024.

d. The agenda note further states that the Law Committee had constituted a sub-committee,
consisting of the States of Uttar Pradesh, Odisha and Madhya Pradesh, GSTN and GST Policy Wing
for examination of the issues raised by the trade in various representations. The sub-committee felt
that to simplify the special procedure, instead of asking the taxpayer to file information through a
number of forms (FORM SRM-I, SRM-IA, SRM-II, SRM-IIA, SRM-IIB, SRM-IIIA & SRM-IV in
the existing Notification No. 30/2023-CT dated 30th July, 2023) only two FORMs may be enough
viz. one for registration and disposal of the machines i.e. FORM SRM-I and the second for filing
monthly details of inputs and outputs i.e. Form SRM-II. Besides, format for Chartered Engineer
Certificate was also suggested as per FORM SRM-III.

e. Subsequently, amended forms FORM SRM-I, SRM-II and SRM-III were finalized by the
sub- committee incorporating various concerns/changes raised by the trade. Also, it was decided that
even after amendment of forms certain issues require further clarification and the same may be done
by issuing a circular. The summary of the issues raised by Trade, the recommendations of the sub-
committee along with proposed amendments carried in the FORMs and issues proposed to be clarified
through circular were placed before the GIC.

f. It is stated that the Law Committee in its meeting dated 08.11.2023 deliberated on the draft
notification prepared by the sub-committee and recommended for issuance of the same. Law
Committee also noted that GSTN will need time to develop the online functionality to make the said
forms available on the portal as per the said special procedure. Law Committee also took note of the
recommendations of the Group of Ministers (GoM) on Capacity Based Taxation that these special
procedures may be implemented through system-based measures without requiring manual interface.
Therefore, the Law Committee recommended that while the said revised notification, may be issued at
the earliest, so that GSTN can start development of the requisite functionality and trade is also made
aware of the revised special procedure and forms, the said notification may be brought into effect
from a date to be notified later depending on the readiness of the portal for the said functionality.

g. In view of the above, following proposals were placed before the GIC for approval:
i. issues proposed to be clarified through circular
ii. existing Notification No. 30/2023-Central Tax dated 31.07.2023, may be rescinded
iii. draft notification to rescind the Notification No. 30/2023-Central Tax dated 31.07.2023
iv. the fresh notification prescribing the revised special procedure which may come into effect
from 1st July, 2024 may be issued so that the special procedure can be implemented through
system based functionality to be developed by GSTN on the portal.

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h. Decision: The GIC approved the agenda with the proposed date of notification coming into
effect being revised to 1st April, 2024

i. Implementation Status: In pursuance of GIC decision dated 30.12.2023, Notification No.
03/2024-Central Tax dated 5th January, 2024 and Notification No. 04/2024- Central Tax dated 5th
January, 2024 was issued.
3. Decision of GIC by circulation on 18.12.2023 regarding extension of due date for
furnishing of Form GSTR-3B for the month of November 2023 by taxpayers in certain districts
of the state of Tamil Nadu.
a. The agenda note stated that the landfall of Michaung Cyclone on December 4th and 5th,
2023, has significantly affected essential services in the districts of Chennai, Tiruvallur, Chengalpattu,
and Kancheepuram in Tamil Nadu. As a result, transportation, electricity supply, and broadband
connectivity in these areas have been disrupted. Consequently, taxpayers in these districts are
encountering difficulties in filing FORM GSTR-3B for November 2023 within the stipulated due
date.
b. In view of the above, following proposal was made in the Agenda Note :-
To mitigate the difficulties faced by taxpayers in these districts in filing FORM GSTR-3B for
November 2023, it is proposed that the due date for furnishing the return be extended to December
27, 2023.
c. The agenda note was circulated among Members of the GIC for decision.
d. Decision: The GIC approved the above proposal.
e. Implementation Status: In pursuance of GIC decision dated 30.12.2023, Notification No.
55/2023-Central Tax dated 20th December,2023 was issued.
4. Decision of GIC by circulation on 28.12.2023 regarding extension of limitation by issue of
notification under Section 168A of the CGST Act, 2017
a. The agenda note states that Section 73 of the CGST Act, 2017 provides that the proper officer
shall issue the order demanding any tax that has not been paid or short paid or erroneously refunded,
or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of
fraud or any wilful misstatement or suppression of facts to evade tax, within three years from the due
date for furnishing of annual return for the financial year to which the tax not paid or short paid or
input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous
refund.

b. It further states that as per Notification No. 09/2023-Central Tax dated 31.03.2023, the time
limit specified under sub-section (10) of section 73 of CGST Act, 2017 for issuance of order under
sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax
credit wrongly availed or utilised, relating to Financial Years 2017-18, 2018-19 and 2019-20 has been
extended. This was done on recommendation of 49th GST Council meeting held on 18th February,
2023 wherein it was deliberated that due to delay in scrutiny, assessment and audit work due to
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Covid-19 restrictions, additional time was needed for the officers to issue notices and pass orders. The
said timelines were extended as given below:

i. for the financial year 2017-18, up to the 31st day of December, 2023;
ii. for the financial year 2018-19, up to the 31st day of March, 2024;
iii. for the financial year 2019-20, up to the 30th day of June, 2024;

c. Additionally, it is stated that on the recommendations of the GST Council in its 49th meeting,
various amnesty schemes were launched by the government for the benefit of taxpayers viz. reduction
in late fees for furnishing the returns in FORM GSTR-4, allowing filing of revocation of cancellation
of registration applications, waiver of amount of late fees for registered person who fail to furnish the
returns under Section 44 by the due dates for various Financial Years. All these amnesty schemes
were later extended up to 31st August 2023. Due to the same, new cases for issuance of demand
notices and adjudications have come up before the proper officers and as such, some tax
administrations have requested for extension of time lines as mentioned above by another 3 months.

d. It is further mentioned that the issue was deliberated in the 2nd National Coordination
Meeting of Central and State Tax authorities under the chairmanship of Revenue Secretary on
14.12.2023. In the said meeting, various states raised the issue that due to COVID-19 restrictions,
assessment, scrutiny and audit could not be taken up by the tax administrations in time, which has led
to bunching/ clubbing of such assessments/ scrutiny/ audit for FY 2017-18, FY 2018-19 and FY 2019-
20. Besides, due to various amnesty schemes provided by the Government in form of waiver of late
fee for delayed filing of returns, allowing filing applications for revocation of cancellation of the
registration, etc. (the last date of such amnesty schemes was upto 31st August 2023), a number of
returns have been filed during the period of amnesty, followed by assessment and scrutiny of such
returns, which may require issuance of demand notices and subsequent adjudication orders. All this is
not only causing unnecessary strain on the tax officers for issuance of demand notices and
adjudication order within the specified time limit, but is also resulting in hardship to taxpayers in
providing reply of demand notices in time for timely completion of adjudication process. It was
requested by tax administrations in the 2nd National Coordination Meeting that there is an imminent
requirement of extension of the time limit specified under sub-section (10) of section 73 of CGST
Act, 2017 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax
not paid or short paid or of input tax credit wrongly availed or utilised, for Financial Years 2017-18,
2018-19 and 2019-20 by some more time. Besides, request has also been received from trade and
industry that more time be given to them for filing replies to demand notices, due to bunching of
notices for FY 2017-18, FY 2018-19 and FY 2019-20. It was decided that the issue will be deliberated
by the Law Committee.

e. The agenda note informs that the matter was deliberated by the Law Committee in its meeting
held on 20.12.2023. The Law Committee recommended that limitation under Section 73 of CGST Act
for issuance of order, may be extended till 30th April, 2024 (from 31st March 2023 at present) for FY
2018-19 and may be extended till 31st August, 2024 (from 30th June 2024 at present) for the FY
2019-20 under the powers available under section 168A of CGST Act. Law Committee further took a
view that no such extension may be allowed for timelines under section 73(10) of the Act, for the FY
2017-18, as the time limit for issuance of demand notices under section 73 of CGST Act for FY 2017-
18 has already expired on 30th September 2023. The demand notice is required to be issued at least 3
months prior to the time limit for issuance of order under sub-section (10) of section 73 of CGST Act,
2017.
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f. Lastly, the agenda note states that as the time limit for issuance of demand notices under
Section 73 of CGST Act, 2017 for FY 2018-19 is going to expire on 31st December 2023 as per the
present timelines, the said proposed notification for extension of timelines is required to be issued
before 31st December 2023.

g. Accordingly, approval of the GIC was sought for issue of notification under Section 168A of
CGST Act, as per the above recommendations of the Law Committee

h. Decision: The GIC approved the agenda relating to extension of limitation by issue of
notification under Section 168A of CGST Act

i. Implementation Status: In pursuance of GIC decision dated 28.12.2023, Notification No.
56/2023-Central Tax dated 28th December,2023 was issued.

5. Decision of GIC by Circulation on 5th January, 2024 regarding extension of due date for
furnishing of Form GSTR-3B for the month of November 2023, Form GSTR-9 and Form
GSTR-9C for FY 2022-23 in certain districts of the state of Tamil Nadu
a. The agenda note stated that the revenue districts of Tirunelveli, Tenkasi, Kanyakumari,
Thoothukudi, and Virudhunagar in the state of Tamil Nadu experienced unprecedented heavy rainfall
on December 17 and 18, 2023. Due to the heavy rainfall, normal life in these districts has been
severely impacted, disrupting transportation, electricity supply, and internet connectivity. As a result,
taxpayers in these districts faced difficulties in submitting Form GSTR-3B for November 2023 and
Forms GSTR-9 and GSTR-9C for the financial year 2022-23 within the due dates.
b. The agenda note further stated that the due date for furnishing GSTR-3B for November 2023
had previously been extended to December 27, 2023, for registered persons whose principal place of
business was in the cyclone-affected districts of Chennai, Tiruvallur, Chengalpattu, and Kanchipuram
in Tamil Nadu. This extension was notified via Notification No. 55/2023, Central Tax, dated
December 20, 2023.
c. The agenda note further stated that due dates for furnishing GSTR-3B for the month of
November 2023 had been earlier extended till 27th December, 2023 for the registered persons whose
principal place of business fell the cyclone affected districts of Chennai, Tiruvallur, Chengalpattu and
Kanchipuram in the state of Tamil Nadu and the same had been notified vide Notification No.
55/2023, Central tax dated 20.12.2023. In these cyclone-affected districts, the due dates for furnishing
GSTR-9 and GSTR-9C also needed to be extended as a measure of relief for trade and industry.
d. In view of the above, following proposals were made in the Agenda note:
i. Extension of due dates for the filing of monthly return in Form GSTR- 3B for the month
November 2023 is upto and inclusive of 10th January, 2024, for the revenue districts of Tirunelveli,
Tenkasi, Kanyakumari, Thoothukudi and Virudhunagar, in the State of Tamil Nadu, without
payment of late fee and interest.
ii. Extension of due dates for filing of Annual return in GSTR-9 and GSTR-9C upto 10th
January, 2024 (inclusive of 10th January) for registered persons whose principal place of business
fell the cyclone affected districts of Chennai, Tiruvallur, Chengalpattu and Kanchipuram in the state
of Tamil Nadu, without payment of late fee.
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e. The agenda note was circulated among Members of the GIC for decision.
f. Decision: The Members of the GIC approved the above proposal.
g. Implementation Status: In pursuance of GIC decision dated 5.1.2024, Notification No.
01/2024-CT dated 05.01.2024 and Notification No. 02/2024-Central Tax dated 5th January,2024 was
issued.

6. Decision by circulation on 19.2.2024 regarding integration of Goods and Services Tax
Network (GSTN) with Tech Platform of the Reserve Bank of India (RBI)
a. The Agenda Note states that the Reserve Bank of India (RBI) has requested Integration of
GSTN with Tech Platform of RBI. It is stated that RBI has developed a 'Tech Platform' to which all
the financial ecosystem players could connect. It would enable delivery of the frictionless credit by
facilitating seamless flow of all required digital information to lenders. The platform would bring in
efficiency to the lending process in terms of reduction of costs, improving Turn Around Time, greater
scalability, and expanding the reach of financial services.
b. It is further mentioned that GST payment related data available with GSTN has a crucial role
in facilitating credit appraisal by lender and its efficient delivery. The integration of GSTN with
multiple financial institutions and banks enables them to access crucial GST-related information of
MSMEs, which significantly aids in credit appraisal and efficient credit delivery. By minimizing the
'information asymmetry' in the system, GSTN can play a central role in facilitating cash flow-based
lending to MSMEs. Further, the integration of GSTN with the Platform replaces the need to build
costly and complex APIs by each lender, with a single easy to use and manage standard protocol for
connecting to the Platform.
c. It is further observed in the Agenda Note that Section 158A of the CGST Act, 2017 provides
for consent-based sharing of data. The section allows sharing of data with such platforms as may be
notified. Earlier, the GST Council had approved notification of "Account Aggregators", as defined in
Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016 issued by
the Reserve Bank of India under Reserve Bank of India Act, 1943, as a platform with which data from
GSTN can be shared. The same was notified vide notification No. 33/2023-Central Tax dated 31st
July, 2023.
d. The Agenda Note further informs that the issue of notification of "Tech Platform" of RBI as a
platform, with which data of GSTN can be shared, under Section 158A of CGST Act, 2017 was
deliberated by the Law Committee in its meeting held on 27th December 2023, along with the draft
notification for the same. The Law Committee recommended that the issue of the said notification.
e. In view of the above, following proposal was made in the Agenda Note along with the draft
notification: -
Issue of notification of "Tech Platform" of RBI as a platform with which data of GSTN can be shared
f. Decision: The Members of the GIC approved the above proposal
Implementation Status: In pursuance of GIC decision dated 30.12.2023, Notification No. 06/2024-
Central Tax dated 22.02.2024 was issued.
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7. Decision by circulation on 21.02.2024 regarding furnishing of GST trade data of chemicals
for real time monitoring of dual use chemicals under the Chemical Weapons Convention
a. The Agenda Note states that the National Authority Chemical Weapons Convention
(NACWC) has requested aggregated GST trade data for specific chemicals identified by HSNs
(29211200, 29211300, 29306000, 29307000) starting from January 1, 2021 along with the CAS
numbers and HS Codes of the most frequently traded chemicals that require monitoring.

b. The GST Council in its 48th meeting has approved the policy for sharing of GST data with
other Ministries. It was agreed that any agency that intends to access summary data pertaining to GST
should give the details in the approved format to DoR and thereafter DoR shall process the request
and place it before the GST Implementation Committee. In the Agenda Item 12, data which could be
shared was broadly classified into four categories. The present request for sharing aggregated HSN
wise data falls under the second category i.e. Aggregated GST data which does not involve disclosure
of any personally identifiable information of a taxpayer etc.

c. In view of the above, following proposal was made in the Agenda note :-
Approve sharing of aggregated GST trade data of chemicals identified by HSNs (29211200,
29211300, 29306000, 29307000) from 1st January, 2021 onwards along with the details of CAS
numbers and HS Codes with the National Authority Chemical Weapons Convention
d. The agenda note was circulated among Members of the GIC for decision.
e. Decision: The Members of the GIC approved the above proposal

8. Decision by circulation on 15.3.2024 regarding relaxation in the eligibility criteria for
selection to the post of Technical Member (State) of Goods and Services Tax Appellate Tribunal
(GSTAT) - States of Gujarat and Maharashtra
a. The Agenda Note states that representations had been received from the states of Gujarat and
Maharashtra for relaxation in the eligibility criteria for selection to the post of Technical Member
(State) of GSTAT.
b. The Agenda Note further states 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:
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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.
c. In view of the above, following proposal was made in the Agenda note :-
a. Proposal of State of Maharashtra for notifying the rank of not below the rank of “Joint
Commissioner of Sales Tax or Joint Commissioner of State Tax” as a minimum qualifying rank of the
officer for functioning as the First Appellate Authority in the State;
b. Proposal of State of Gujarat for notifying an officer not below the rank of “Joint Commissioner of
Gujarat Value Added Tax or Gujarat Goods and Services Tax” as the minimum qualifying rank of
officer for functioning as the First Appellate Authority in the State.
d. The agenda note was circulated among Members of the GIC for decision.
e. Decision: The Members of the GIC approved the above proposal

9. Decision by circulation on 26.3.2024 regarding relaxation in the eligibility criteria for
selection to the post of Technical Member (State) of Goods and Services Tax Appellate Tribunal
(GSTAT) in respect of the States of Uttar Pradesh and Bihar
a. The Agenda Note states that representations had been received from the states of Gujarat and
Maharashtra for relaxation in the eligibility criteria for selection to the post of Technical Member
(State) of GSTAT
b. The Agenda Note further states 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
c. The Agenda Note further states that in this context it is to be mentioned that a State Government,
on the recommendation of the GST Council, may relax the requirement of completion of twenty five
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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. Accordingly, it may be seen that for the issuance of the said notification, the
following is required:
i. 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,
ii. the relaxation sought,
iii. such conditions subject to which the exemption is to be granted, and
iv. such period upto which the exemption is to be granted
d. In view of the above, following proposal was made for a period of 10 years in the Agenda
note:
a. Proposal of the State of Bihar for notifying an officer of the Commercial Tax Department
of Bihar, 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).
b. Proposal of the State of Uttar Pradesh for notifying an officer of the State Tax Department
of Uttar Pradesh, 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)
e. The agenda note was circulated among Members of the GIC for decision.
f. Decision: The Members of the GIC approved the above proposal.

10. Decision of GIC by Circulation on 03.04.2024 regarding extension of time for
implementation of Notification No. 04/2024-CT dated 05.01.2024
a. The Agenda Note mentions that that GSTN vide its email dated 13.03.2024 has
communicated that the said Forms, FORM GST SRM-1 AND FORM GST SRM-II would not be able
to be developed by 31st March, 2024. It has also been stated by the GSTN that while FORM GST
SRM-I is expected to be developed by 31st May, 2024 Form GST SRM-II may take one more month.
Accordingly, they have requested to defer the implementation of the Notification No. 04/2024-CT
dated 05.01.2024.
b. In view of the above, following proposal was made in the Agenda note:-
Extend the date for implementation of Notification No. 04/2024-CT dated 05.01.2024
c. The agenda note was circulated among Members of the GIC for decision.
d. Decision: The Members of the GIC approved the above proposal with the observation that
both the forms be implemented by 15th May 2024 (instead of proposed 1st June 2024)
e. Implementation Status: In pursuance of GIC decision dated 5.1.2024, Notification No.
08/2024-CT dated 10th April,2024 was issued

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11. Decision of GIC by Circulation on 15.04.2024 regarding extension of the due date for
furnishing return in FORM GSTR-1 for the month of March 2024 up to 12.04.2024 to provide
the taxpayers sufficient time in furnishing their FORM GSTR-1

a. The Agenda Note mentions that the Trade and Industry have reported difficulties in submitting
FORM GSTR-1 returns for March 2024 on time. Additionally, it notes that GSTN, through their
email dated April 11, 2024, requested an extension of the due date for filing FORM GSTR-1 for
March 2024 until April 12, 2024.
b. It is further stated that according to GSTN, the filing of FORM GSTR-1 in April 2024 has been
lower compared to January 2023, particularly from the afternoon of April 11, 2024. It is projected that
by the end of the day, around 7 to 8 lakh returns would still be pending. GSTN suspects this
disruption is linked to a functionality issue with Table 14 & 15 and the corresponding APIs
implemented for marketplace players like Flipkart and Amazon. These functionalities involve the
verification of the GSTIN of their suppliers through the Manage API and the GSP route of Flipkart
and Amazon. GSTN has stated they will thoroughly understand this workflow and decide on future
actions accordingly. However, due to the technical glitch experienced since the afternoon of April 11,
2024, GSTN suggests that it would be prudent to extend the GSTR-1 filing deadline by one day for
monthly taxpayers.
c. The Agenda Note further mentions that GSTN has conveyed that, in line with the extension of the
filing deadline for FORM GSTR-1, the generation of FORM GSTR-2B would be adjusted. This
adjustment aims to incorporate the credit from FORM GSTR-1s filed during the extended period,
ensuring that the flow of credit remains uninterrupted.
d. In view of the above, following proposal was made in the Agenda note :-
Extend the deadline for filing the return in FORM GSTR-1 for March 2024 until April 12, 2024, to
give taxpayers sufficient time to complete their FORM GSTR-1 submissions
e. The agenda note was circulated among Members of the GIC for decision.
f. Decision: The Members of the GIC approved the above proposal
g. Implementation Status: In pursuance of GIC decision, Notification No. 09/2024-CT dated
12th April,2024 was issued
12. Decision by circulation on 2.5.2024 on relaxation in the eligibility criteria for selection to the
post of Technical Member (State) of GSTAT in various states and ⁠notifying the rank of the
officer who is the first Appellate Authority in the State of Mizoram
a. The Agenda Note states that representations have been received from -
(i) the states of Gujarat, Himachal Pradesh, Rajasthan, Odisha, Goa, Andhra Pradesh, Tamil
Nadu, Uttarakhand and Haryana for consideration and approval of the GST Council to relax the
requirement of completion of twenty five years of service in Group-A or equivalent.
(ii) the state of Mizoram to notify the rank of officer as the First Appellate Authority.
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b. The Agenda Note further states 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
c. The Agenda Note further states that in this context it is to be mentioned that a State Government,
on the recommendation of the GST Council, may 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. Accordingly, it may be seen that for the issuance of the said notification, the
following is required:
i. 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,
ii. the relaxation sought,
iii. such conditions subject to which the exemption is to be granted, and
iv. such period upto which the exemption is to be granted
d. In view of the above, following proposals were made in the Agenda note:
A. Relaxation allowing 25 years of service in the Government as Gazetted Officer
(irrespective of whether or not in Group A or equivalent) for a period of 10 years from the date of
notification as per the:
1. Proposal of State of Gujarat for notifying an officer of the Commercial Tax Department of
Gujarat, 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.
2. Proposal of 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.
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3. Proposal of State of Himachal Pradesh for notifying an officer of the Commercial Tax
Department of Himachal Pradesh, 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. Proposal of State of Odisha for notifying an officer of the Commercial Tax Department of
Odisha, who has completed fifteen years of service as Group A or equivalent subject to
overall 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.
5. Proposal of State of Rajasthan for notifying an officer of the Commercial Tax Department
of Rajasthan, who has completed at least fifteen years as Group A or equivalent subject to
overall 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.
6. Proposal of State of Uttarakhand for notifying an officer of the Commercial Tax
Department of Uttarakhand, 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. Proposal of State of Haryana for notifying an officer of the Commercial Tax Department of
Haryana, 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.
8. Proposal of State of Tamil Nadu for notifying an officer of the Commercial Tax
Department of Tamil Nadu, who has completed at least fifteen years as Group A or equivalent
subject to overall 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.
9. Proposal of State of Andhra Pradesh for notifying an officer of the Commercial Tax
Department of Andhra Pradesh, who has completed at least twenty years as Group A or
equivalent subject to overall 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.
B. Relaxation by altering the rank of the First Appellate Authority
1. Proposal of the State of Mizoram to notify the Joint Commissioner as the rank of officer
who shall be the First Appellate Authority in the State Bench.
e. The agenda note was circulated among Members of the GIC for decision.
f. Decision: The Members of the GIC approved the above proposal

13. Decision by circulation on 27.5.2024 on sharing of GSTN data with the Centre of WTO
Studies, Department of Commerce, Ministry of Commerce & Industry
a. The Agenda Note states that a request was received from Department of Commerce, Ministry of
Commerce & Industry regrading sharing of GSTN data at HSN 6 level of total supply for last three
years to Centre for WTO studies, Ministry of Commerce & Industry on one-time basis. It is stated that
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the purpose for which data is being sought is to carry out an analysis to identify product level
vulnerabilities from a supply chain angle.
b. The Agenda Note further notes that the GST Council in its 48th Meeting has already approved the
GST data sharing with other Ministries/Departments.
c. In view of the above, following proposal was made in the Agenda note:-
Approve sharing of GSTN data at HSN 6 level of total supply for last three years to Centre for WTO
studies, Ministry of Commerce & Industry on one-time basis
d. The agenda note was circulated among Members of the GIC for decision.
e. Decision: The Members of the GIC approved the above proposal

14. Decision by circulation on 31.5.2024 on sharing of GSTIN based registration details through
API with Ministry of Information and Broadcasting
a. The Agenda Note states that a request was received from the Ministry of Information &
Broadcasting regarding sharing of GSTIN based registration details through API. The data was being
sought on a recurring basis to develop an online facility for granting registrations to the Local Cable
Operators. The agenda also states that data related to turnover field will be shared with Ministry of
Information and Broadcasting only, if required, for enforcement of any law or regulation.
b. In the Agenda Note, D.O. letter dated 14.11.2023 of the Joint Secretary (Broadcasting) of the
Ministry of Information & Broadcasting addressed to the CEO, GSTN was attached wherein it is
mentioned that the Ministry was in the process of developing an online facility/module for granting
registrations to the Local Cable Operators (LCOs). This module was being developed as an extension
to the Broadcast Seva portal and was aimed at minimizing human intervention and reducing the time
required for the registration procedure. The portal is being designed to automatically verify the details
of the applicants. It is further stated that in view of the above, GST Registration Number information-
related services through an API based integration approach for the LCO registration module may be
allowed.
c. In view of the above, following proposal was made in the Agenda note:-
Approve sharing of GSTIN based registration details through API with the Ministry of Information
and Broadcasting
d. The agenda note was circulated among Members of the GIC for decision.
e. Decision: The Members of the GIC approved the above proposal

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Agenda item 3: Issued recommended by the Law Committee for the consideration of the GST
Council.

Agenda Item 3(i): Law amendment proposals to amend the CGST Act, 2017 and IGST Act,
2017.

Law Committee in its various meetings has recommended various amendments in the Central
Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act”) and Integrated Goods
and Services Tax Act, 2017 (hereinafter referred to as “the IGST Act”) to streamline the said
provisions as well as to provide clarity with regard to various provisions of GST Law, to augment
revenue, to facilitate the taxpayers and to promote ease of doing business.
2. The details of the proposed amendments are as given below:
I. Amendment to Section 9 of CGST Act regarding non-applicability of GST on Extra
Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption.
An Agenda on “Taxation of rectified spirit/Extra Neutral Alcohol (ENA) under GST” was
considered in the 20th Meeting of GST Council held on 05.08.2017, wherein the Council, had
recommended for the time being, status quo should be maintained regarding taxation of ENA for
manufacture of alcoholic liquor for human consumption and Extra Neutral Alcohol supplied for
industrial purpose shall attract GST at the rate of 18%. Further, legal opinion of the Attorney General
of India may be sought regarding whether within the prevailing constitutional provisions, GST can be
levied on supply of ENA for manufacture of alcoholic liquor for human consumption.
2. The issue was also placed before the 26th GST Council meeting held on 10.03.2018. However,
the same could not be discussed due to the paucity of time. Thereafter, the issue was placed before the
31st and 37th GST Council meeting and the Council approved the Fitment Committee
recommendation to maintain status quo and it recommended that in the interim period, the States may
go by the decision of GST Council as recorded in the Minutes of the Council Meeting dated
5th August, 2017. Thereafter, the matter of applicability of GST on ENA was placed before the GST
Council in its 43rd GST Council meeting held on 28th May, 2021, along with the opinion of Ld. AG.
The Learned Attorney General opined that the judgment of the Court in Bihar Distillery does not
denude the Centre or the States of the power to levy GST on ENA that is used to manufacture
‘alcoholic liquor for human consumption’. In the said meeting, in view of the comments of the States
on the issue, the agenda was again deferred.
3. The matter of taxability of rectified spirit/ Extra Neutral Alcohol (ENA) under GST was
discussed by the GST Council in its 52nd meeting, wherein the following recommendations were made
by the Council:
i. To place before Supreme Court that GST Council has no intention to levy GST on ENA for
manufacture of alcoholic liquors for human consumption.
ii. To make suitable amendment in law to exclude ENA (both grain-based and molasses-
based) from ambit of GST when supplied for manufacture of alcoholic liquors for
human consumption.
iii. To reduce GST on Molasses from 28% to 5%.
iv. To notify GST rate of 18% for new tariff item at 8 digit level created for Rectified spirits
(ENA) for industrial use (HS 2207 10 12).
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2. Accordingly, the issue of making requisite amendment in GST law was deliberated by the
Law Committee in its meeting held on 18.10.2023. The Law Committee recommended amendment in
sub-section (1) of Section 9 of the CGST Act, 2017 for not levying GST on Extra Neutral Alcohol
used for manufacture of alcoholic liquor for human consumption. The said amendment, as
recommended by the Law Committee, is as under:
“(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central
goods and services tax on all intra-State supplies of goods or services or both, except on the
supply of alcoholic liquor for human consumption and un-denatured extra neutral alcohol or
rectified spirit which is used for manufacture of alcoholic liquor for human consumption, on
the value determined under section 15 and at such rates, not exceeding twenty per cent., as
may be notified by the Government on the recommendations of the Council and collected in
such manner as may be prescribed and shall be paid by the taxable person.”
3. The Law Committee also recommended that similar amendments may be carried out in the SGST
Act, the UTGST Act and the IGST Act.
II. Insertion of Section 11A in CGST Act for granting power not to recover duties not
levied or short-levied as a result of general practice under GST Acts.
GST Council has, in the past, recommended regularization of certain assessments on as is
basis. The regularization was necessitated due to reasons such as ambiguity in provisions of law,
overlapping entries of notifications, divergent practices being followed in the field, etc.
2. The various recommendations of the GST Council to regularize past assessments on as is
basis were implemented by Central and State governments through circulars. It is mentioned that
there is no specific provision under GST law which empowers the Central /State Governments to not
recover GST not levied or short-levied as a result of any ambiguity or general practice.

3. However, such powers existed in the Customs Act, 1962 and Central Excise Act, 1944 which
also applied to Service Tax. Section 28A under Customs Act, 1962 and section 11C of Central Excise
Act, 1944 provided for the same.
3.1 The Customs Act and Central Excise Act also provided for refund of any duty paid in excess
of what was paid as a matter of general practice where a notification was issued under the above
provisions.
4. It is felt that waiver of non–levy or short levy of GST on any supply, in absence of any
specific power empowering the Central / State Governments to do so, however necessary or
expedient, may not be appropriate. Accordingly, there may be a need for incorporation of suitable
provisions in GST laws also to empower the Government for such regularization in cases where such
non levy or short levy was a result of general practice in the trade or a section of trade.
5. The issue was deliberated by the Law Committee in its meeting held on 30.05.2024, The Law
Committee recommended that a provision may be incorporated in GST laws (CGST Act, SGST Act,
IGST Act, UTGST Act and Compensation Cess Act) empowering the Central and State Governments
to regularize, on the basis of the recommendations of the GST Council, non –levy or short levy of
GST or Compensation Cess where it is found that such non levy or short levy was a result of general
practice in the trade or a section of trade. Law Committee also recommended that no refund of GST
or Compensation Cess may be allowed on account of any notification issued in this regard.
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5.1 Accordingly, Law Committee proposed inserting a new section 11A in the CGST Act, 2017,
as below:
“Section 11A. Power not to recover GST not levied or short-levied as a result of general
practice.
(1). Notwithstanding anything contained in this Act, if it is found -
a) that a practice was, or is, generally prevalent regarding levy of central tax
(including non-levy thereof) on any supply of goods or services or both and

(b) that such supplies were, or are, liable –
(i) to central tax, in cases where according to the said practice, central tax
was not, or is not being, levied, or
(ii) to a higher amount of central tax than what was, or is being, levied,
according to the said practice,

then, the Central Government may, on the recommendation of the Council, by
notification in the Official Gazette, direct that the whole of the central tax payable on
such supplies, or, as the case may be, the central tax in excess of that payable on such
supplies, but for the said practice, shall not be required to be paid in respect of the
supplies on which the central tax was not, or is not being, levied, or was, or is being,
short-levied, in accordance with the said practice.
(2) No refund shall be made of all such central tax which has been collected, but which would
not have been so collected, had the notification referred to in sub-section (1) been in force at
all material times.”
5.2 Further, it is to be mentioned that similar provision will also be needed to be inserted in other
GST Acts as detailed below:
• Section 6A in Integrated Goods And Services Tax Act, 2017. In this Act, references to
"central tax" in the proposed section will have to be replaced with "integrated tax”.
• Section 8A in Union Territory Goods And Services Tax Act, 2017. In this Act, references to
"central tax" in the proposed section will have to be replaced with "Union territory tax”.
• Section 8A in Goods And Services Tax (Compensation to States) Act, 2017. In this Act,
references to "central tax" in the proposed section will have to be replaced with "cess".
5.3 Also, pari-materia amendments need to be made in State GST Acts also.
III. Amendment in Section 13 and Section 31 of the CGST Act, 2017 regarding time of
supply and issuance of invoices in respect of RCM supplies.
Section 13 of CGST Act, 2017 provides for determination of time of supply of services. Sub-
section (3) of section 13 of CGST Act provides for determination of time of supply of services in
cases where the tax is paid or liable to be paid on reverse charge basis by the recipient of the services.
Clause (b) of section 13(3) of CGST Act links time of supply with the date of issue of invoice, or any
other document in lieu thereof, by the supplier. However, as per clause (f) of section 31(3) of CGST
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Act, in cases of supplies received from the unregistered persons, where tax is to be paid on reverse
charge basis by the recipient, the invoice is to be issued by the recipient. Clause (b) of section 13(3) of
CGST Act does not cover the scenarios where invoice is required to be issued by the recipient in case
of RCM supplies as per section 31(3)(f) of CGST Act, which is creating ambiguity regarding
interpretation of time of supply in such cases.
2.1 Law Committee in its meetings held on 31.01.2024 and 25.04.2024 recommended that
suitable amendment may be done in Section 13(3) of CGST Act to provide for a specific provision in
section 13(3) for covering the cases where the invoice is required to be issued by the recipient of
services in case of RCM supplies. Law Committee recommended that amendments may be made in
clause (b) of sub-section (3) of section 13 of the CGST Act and a separate clause (c) may be inserted
in the said sub-section to cover the said scenario. Further, amendment may also be required in the
proviso to the said sub-section. The amendment as recommended by the Law Committee is given
below:
(b) the date immediately following sixty days from the date of issue of invoice or any other
document, by whatever name called, in lieu thereof by the supplier:, in cases where invoice is
required to be issued by the supplier; or

(c) the date of issue of invoice by the recipient, in cases where invoice is required to be issued
by the recipient:

Provided that where it is not possible to determine the time of supply under clause (a) or
clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of
the recipient of supply.

2.2 Further, Law Committee also observed that there is a lack of clarity in clause (f) of sub-
section (3) of section 31 of the CGST Act, read with rule 47 of CGST Rules, 2017, regarding the time
period within which the invoice is required to be issued by the recipient in case of RCM supplies.
Therefore, Law Committee in its meeting held on 25.04.2024 and 02.05.2024 recommended that
amendment as below may be made in section 31(3) (f) of the CGST Act, 2017 to specifically provide
for the same:
“Section 31. Tax invoice.-
(3) Notwithstanding anything contained in sub-sections (1) and (2)-
(f) a registered person who is liable to pay tax under sub-section (3) or subsection (4)
of section 9 shall, within the period as may be prescribed, issue an invoice in respect of
goods or services or both received by him from the supplier who is not registered on the
date of receipt of goods or services or both;”
2.3 Further, Law Committee also recommended that such time period for issuance of invoice
by the recipient in case of RCM supplies may be prescribed in the CGST Rules, 2017.
Accordingly, Law Committee in its meeting held on 02.05.2024 recommended for insertion of
Rule 47A in CGST Rules, 2017 providing for the same. Also, it was recommended that the
second proviso to Rule 46 of CGST Rules, 2017 may be omitted as the same is not relevant
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now, as very few supplies have been notified under section 9(4) of CGST Act, 2017. The
amendments recommended by the Law Committee are as below:
A. “Rule 46. Tax invoice.-
……
Provided further that where an invoice is required to be issued under clause (f) of
sub-section (3) of section 31, a registered person may issue a consolidated invoice
at the end of a month for supplies covered under sub-section (4) of section 9, the
aggregate value of such supplies exceeds rupees five thousand in a day from any or
all the suppliers:”
B. Insertion of Rule 47A after Rule 47 of CGST Rules, 2017:
“Rule 47A. Time limit for issuing tax invoice in cases where recipient is required
to issue the invoice:-
47A. Notwithstanding anything contained in rule 47, where an invoice referred to
in rule 46 is required to be issued under clause (f) of sub-section (3) of section 31
by a registered person, who is liable to pay tax under sub-section (3) or sub-section
(4) of section 9, he shall issue the said invoice within a period of thirty days from
the receipt of the said supply of goods or services or both.”
3. Also, Law Committee observed that since in case of RCM supplies, the liability to issue
invoice is on the registered recipient of supplies, therefore a doubt emerges as to whether a supplier
who is registered solely for the purposes of TDS deduction under Section 51 of CGST Act, is to be
considered as a registered person for the purpose of clause (f) of sub-section (3) of section 31 of the
CGST Act and whether he may be required to issue the tax invoice in respect of any supply made by
him which is liable to tax in the hand of registered recipient under sub-section (3) or sub-section (4) of
section 9 of the CGST Act.
3.1 Clause (f) of sub-section (3) of section 31 of the CGST Act provides for issuance of invoice
by the registered recipient in such RCM supplies only if the supplier is not registered. If a view is
taken that a supplier who is registered solely for the purposes of TDS deduction under Section 51 of
CGST Act, is to be considered as a registered person for the purpose of section 31(3)(f) of the CGST
Act, then a government department registered solely for the purposes of TDS deduction under Section
51 of CGST Act, who is providing a supply covered under sub-section (3) or sub-section (4) of
section 9 of the CGST Act, may be required to issue the invoice in terms of section 31 of the CGST
Act which may not be intended.
3.2 In order to clarify the same, the Law Committee in its meeting held on 25.04.2024
recommended that an explanation may be inserted in sub-section (3) of Section 31 of CGST Act so as
to clearly provide that a supplier who is registered solely for the purposes of TDS deduction under
Section 51 of CGST Act, 2017 shall not be considered as a registered person for the purpose of clause
(f) of sub-section (3) of section 31 of the CGST Act. The Explanation, clarifying that the person
registered solely for the purpose of deduction of TDS are covered under the phrase ‘supplier who is
not registered’, as recommended by the Law Committee, to be inserted after clause (g) of sub-section
(3) of section 31 of the CGST Act is as below:
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“Explanation.-For the purpose of clause (f), the expression “supplier who is not registered”
shall include the supplier who is registered solely for the purpose of deduction of tax under
Section 51.”

IV. Amendment in Section 16 of IGST Act, 2017 along with corresponding provisions in
Section 54 of CGST Act, 2017, to curtail refund of IGST in cases where export duty is payable,
and also to rationalise the said provisions.
Issue I : Amendment pertaining to the issue of restriction on refund claim on goods on which
export duty is payable
The provisions of the IGST Act were amended to make the zero rated supply of goods and
services without payment of integrated tax as the default route for claiming refund in respect of
accumulated input tax credit under sub-section (3) of section 16 of IGST Act, 2017, in accordance
with provisions of Section 54 of CGST Act. Vide sub-section (4) of section 16 of IGST Act, 2017, the
Government has been empowered to notify a class of persons, who may make zero rated supply on
payment of integrated tax and claim refund of the tax so paid, and to notify a class of goods or
services which may be exported on payment of integrated tax and the supplier of such goods or
services may claim refund of tax so paid. Reference is also drawn to first proviso to Section 54 of
CGST Act, 2017 which provides that a registered person may claim refund of any unutilised input tax
credit at the end of any tax period in respect of zero rated supplies made without payment of tax.
However, vide second proviso to Section 54 of CGST Act, a restriction has been provided that no
refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India
are subjected to export duty.
2. In this regard, doubts have been raised by some field formations that whether this restriction
under second proviso to Section 54 of CGST Act on grant of refund of unutilised input tax credit in
cases where the goods exported out of India are subjected to export duty, is also applicable in respect
of grant of refund of integrated tax paid on goods exported out of India, where such goods exported
out of India are subject to export duty.
3. It is also mentioned that as per fifth proviso to Rule 27 (1) of SEZ Rules, 2006, supplies from
Domestic Tariff Area to Special Economic Zones also attract export duty if such goods are subjected
to export duty. The same is reproduced as under:

“Provided also that supplies from Domestic Tariff Area to Special Economic Zones shall
attract export duty, in case, export duty is leviable on items attracting export duty”

4.1 On perusal of the above, it is worthwhile to mention that as per sub-section (3) of Section 16
of IGST Act, a registered person making a zero rated supply may claim refund of unutilised input tax
credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter
of Undertaking, in accordance with the provisions of section 54 of the CGST Act. Further, as per
second proviso to sub-section (3) of section 54 of CGST Act, there is a specific restriction on grant of
refund of unutilised input tax credit in cases where the goods exported out of India are subjected to
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export duty. As the restriction provided by second proviso to section 54 of CGST Act is specifically
provided only in respect of refund of unutilised input tax credit in cases where the goods are exported
out of India under bond or Letter of Undertaking route, this restriction on grant of refund does not
appear to be applicable on refund of integrated tax in respect of goods exported out of India on
payment of integrated tax or on goods supplied to a Special Economic Zone developer or a Special
economic Zone unit for authorized operations.
4.2 In this regard, it is relevant to mention here that export duty on any goods is imposed by the
Government to ensure domestic availability of the said goods to meet the domestic demand and to
ensure that price is stable/ retained in domestic economy i.e. to curb inflationary tendency. However,
a bare perusal of the extant provisions implies that as per second proviso to Section 54 (3) of CGST
Act, refund of unutilized input tax credit is prohibited on account of export duty only for the goods
exported out of India without payment of tax, but no such restriction has been provided in respect of
refund of integrated tax paid on export of goods, or in respect of goods supplied to a Special
Economic Zone developer or a Special economic Zone unit for authorized operations, either under
other sub-sections of section 54 of CGST Act or under Section 16(4) of IGST Act (or the earlier
section 16(3) of IGST Act before the amendment w.e.f. 01.10.2023).
4.3 Since the purpose of imposing export duty is to ensure that domestic availability of goods is
met and price of such goods are stable/ retained in domestic economy i.e. curb on inflationary
tendency, therefore, it naturally follows that refund in respect of goods, which are subjected to export
duty, should be prohibited, irrespective of the fact that whether the said goods are exported without
payment of taxes or with payment of taxes, and such prohibition should also be applicable if such
goods are supplied to a Special Economic Zone developer or a Special economic Zone unit for
authorized operations, otherwise export duty cannot be considered to have served its true policy
objective. However, the same appears to an omission while introducing the second proviso to Section
54 of CGST Act, restricting the refund of tax only in respect of refund of unutilised input tax credit,
where the goods exported out of India are subject to export duty and are exported without payment of
taxes.
4.4 Accordingly, Law Committee in its meeting dated 01.12.2023 recommended that second
proviso to Section 54 (3) of CGST Act may be omitted and sub-section (15) may be inserted in the
said section, along with the insertion of sub-section (5) in Section 16 of IGST Act, 2017 to provide
that no refund of unutilized input tax credit or integrated tax shall be allowed in cases where the zero
rated supply of goods are subjected to export duty. The draft amendment in section (in red) is as
follows:
Section 54 of CGST Act: Refund of tax
(1) Any person claiming refund of any tax and interest, if any, paid on…
(2) ….
(3) Subject to the provisions…
Provided that…
Provided further that no refund of unutilised input tax credit shall be allowed in cases where
the goods exported out of India are subjected to export duty:
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(15) Notwithstanding anything contained in this section, no refund of unutilized input tax
credit on account of zero rated supply of goods or of integrated tax paid on account of zero
rated supply of goods shall be allowed where such zero rated supply of goods are subjected to
export duty.

Section 16 of IGST Act: Zero rated supply
….
“(5) Notwithstanding anything contained in sub-section (3) and sub-section (4), no refund
of unutilized input tax credit on account of zero rated supply of goods or of integrated tax
paid on account of zero rated supply of goods shall be allowed where such zero rated supply
of goods are subjected to export duty.”
Issue 2: Amendment to rationalise the provisions to notify class of goods or services in
respect of which IGST refund route is available.
5.1 While clause (i) of sub-section (4) of section 16 of IGST Act, 2017, refers to the class of
persons who may make zero rated supplies on payment of integrated tax, clause (ii) of sub-section (4)
of section 16 of IGST Act, 2017 only refers to the phrase “a class of goods or services which may be
exported on payment of integrated tax”. It gives an indication that under sub-section (4) of section 16
of IGST Act, while Government can notify class of persons who may make zero rated supplies on
payment of IGST and claim refund of the tax so paid (i.e. including exports and supplies to Special
Economic Zones units or Special Economic Zones developers for authorized operations) but it
appears that the Government can notify only the class of goods or services which may be exported on
payment of IGST and claim refund of the tax so paid and cannot notify the class of goods or services
which are supplied to Special Economic Zones units or Special Economic Zones developers for
authorized operations, on payment of IGST.
5.2 Further, while sub-section (3) of section 16 of IGST Act mentions that refund of unutilised
input tax credit in respect of zero rated supply of goods or services without payment of tax can be
claimed in accordance with provisions of section 54 of the Central Goods and Services Tax Act or the
rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed, no
such specific reference to section 54 of CGST Act has been made in sub-section (4) of section 16 of
IGST Act. To harmonise these two sub-sections and to remove any doubts, Law Committee in its
meeting held on 01.12.2023 recommended that sub-section (4) of section 16 of IGST Act may also
specifically provide for claim of refund on payment of IGST in respect of zero rated supplies of
notified goods or services in accordance with provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure
as may be prescribed.
5.3 Accordingly, to ensure uniformity in implementation of the said sub-section (4), Law
Committee recommended that clause (i) and clause (ii) of sub-section (4) of Section 16 of the IGST
Act, 2017 may be amended to provide for notification of class of goods or services which may be
supplied on zero rated basis. The draft amendment in section (in red) is as follows:
Section 16 of IGST Act: Zero rated supply
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(1)…
….
(4) The Government may, on the recommendation of the Council, by notification, specify-
(i) a class of persons who may make zero rated supply on payment of integrated tax and claim
refund of the tax so paid in accordance with the provisions of section 54 of the Central Goods
and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards
and procedure as may be prescribed:
(ii) a class of goods or services or both, on zero rated supply of which, the supplier may pay
integrated tax and claim the refund of tax so paid, in accordance with the provisions of
section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to
such conditions, safeguards and procedure as may be prescribed.
V. Amendment in section 70 of the CGST Act, to provide clarity regarding appearance by
authorised representative in response to summons.
Reference has been received regarding need of amendment in section 70 of the CGST Act to
include reference of ‘Authorised representative’ in the said section. It has been submitted that section
70 of the CGST Act does not mention the words ‘authorised representative’. However, section 116 of
the CGST Act dealing with ‘Appearance by Authorised Representative’ allows appearances by the
authorised representative. On combined reading of section 70 and section 116 of the CGST Act, it
appears that the summoned person may appear either in person or through an authorised
representative. However, the current format of summons issued under section 70 of the CGST Act
does not provide the option to appear by an authorised representative.
2.1 Ministry of Law & Justice (MoLD) has given the following opinion on the interplay between
section 70 and section 116 of the CGST Act:
• Every statute is to be interpreted in accordance with the intention of the legislature.
The language employed in a statute or any statutory provision is the determinative
factor of the legislative intent of the policy matters.
• Under section 70 of the CGST Act, the Commissioner or the officer of central tax is
empowered to summon any person whose attendance he considers necessary either to
give evidence or to produce a document or any other thing in the inquiry.
• There is no whisper about ‘authorised representative’ or ‘an oath’ in section 70. Such
words are referred only in section 116 of the CGST Act.
• To expand the provisions of section 70 of CGST Act to include ‘authorised
representative’ or ‘oath’ by placing reliance on provisions of section 116 of the
CGST Act may tantamount to rewriting the provisions of section 70 and may not
withstand judicial scrutiny.
2.2 The Central Excise Act, 1944 and Customs Act, 1962, provide in the section itself for an
option for the appearance through authorised agent against the summons issued to the person.
Therefore, keeping in consideration the legal opinion offered by MoLD and the existing provisions in
Central Excise Act, 1944 and Customs Act, 1962, there may be a need for suitable legislative
amendment in section 70 of the CGST Act to provide for appearance on summons by the authorised
representative of the summoned person. This will promote ease of doing business especially in matter
of production of documents and the like, into the conduct of enquiry by the officer.
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3. The issue was deliberated by the Law Committee in its meeting held on 07.06.2024. The Law
Committee felt that although a harmonious reading of both the sections, section 70 and section 116 of
CGST Act, leads to an interpretation that a summoned person may be represented by an authorised
representative to give evidence or to produce a document or any other thing in the inquiry in response
to summons under section 70 of the CGST Act, except in cases where the concerned person is
required to appear personally for examination on oath or affirmation. However, considering the
opinion of Ministry of Law & Justice (MoLD) discussed above, it may be appropriate that a specific
provision is inserted in section 70 of the CGST Act to provide an explicit reference to ‘authorised
representative’.
3.1 Accordingly, Law Committee recommended insertion of a sub-section (1A) in section 70 of
CGST Act as proposed below:
Insertion of sub-section (1A) in section 70
“(1A) All persons summoned under sub-section (1) shall be bound to attend, either in person
or by an authorised representative, as such officer may direct, and all persons so summoned
shall be bound to state the truth upon any subject respecting which they are examined or make
statements or to produce such documents and other things as may be required.”
VI. Amendment in sub-section (1B) of section 122 of the CGST Act, 2017 with respect to
penalty provisions for non-compliant electronic commerce operators.
The GST Council, in its 47th meeting held on 28th and 29th June 2022, approved waiver from
requirement of mandatory registration under section 24(ix) of CGST Act for unregistered person
supplying goods through Electronic Commerce Operator ( “ECO”) upto threshold turnover for
registration, subject to certain conditions, and also allowed composition taxpayers to make supply of
goods through ECOs subject to certain conditions. Accordingly, Notification No. 34/2023–Central
Tax dated 31.07.2023, Notification No. 37/2023-Central Tax dated 04.08.2023 and Notification No.
28/2023 – Central Tax dated 31.07.2023 were issued providing a special procedure to be followed by
ECOs and the conditions to be fulfilled by the ECOs and such unregistered person for availing the
benefit of such waiver from requirement of mandatory registration.
2. In order to ensure due compliance of the conditions as laid down through the said
Notifications, the GST Council also recommended to introduce penal provisions under sub-section
(1B) of Section 122 of CGST Act for contraventions by ECOs related to supply of goods made
through ECOs by unregistered persons and composition taxpayers. The said penal provisions on
ECOs have been introduced in CGST Act by inserting sub-section (1B) in section 122 of the CGST
Act vide section 155 of the Finance Act, 2023 (No. 8 of 2023). The said penal provision has been
brought in force with effect from 01.10.2023 vide Notification no. 28/2023-Central Tax dated
31.07.2023.
3. In this regard, various references and representations have been received from trade seeking
clarification on the applicability of these penal provisions under section 122(1B) of CGST Act in
respect of ECOs who are not required to collect tax at source from suppliers under section 52 of the
CGST Act.
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3.1 In view of the provisions of section 52 of the CGST Act, read with section 2(45) of the said
Act, the ECOs can be categorised into two categories:
(i) ECOs who are required to collect tax at source under section 52 of CGST Act, i.e. those
ECOs who collect consideration in respect of a taxable supply being made through them by
other suppliers.
(ii) ECOs who do not collect consideration in respect of a taxable supply being made through
them by other suppliers and thus, are not required to collect tax at source under section 52 of
CGST Act.
3.2 It may be noted that benefit of exemption from registration upto threshold turnover for
making intra-State supplies of goods through ECOs, who are required to collect tax at source under
section 52, has been provided to unregistered persons. Also, the restriction on composition taxpayers
has also been lifted by allowing them to make intra-State supply of goods through ECOs, who are
required to collect tax at source under section 52. Further, special procedure has been provided for
such ECOs, who are required to collect tax at source under section 52, in respect of supply of goods
through them by such unregistered suppliers or composition taxpayers.
4. As regards, the issue of applicability of penal provisions introduced for ensuring compliances
by unregistered persons and composition taxpayers as mandated vide various notifications detailed
above, it is observed that such suppliers have been facilitated by extending certain benefits subject to
specified conditions to make their supplies through ECOs who are required to collect taxes at source
under section 52 of the CGST Act. Accordingly, the penal provisions under section 122 (1B) of the
CGST Act has been provided in respect of ECOs, who are required to ensure compliance with the
conditions of supply of goods by unregistered suppliers and compositions taxpayers through them, as
provided vide the said concerned notifications, as discussed in above paras. It may be noted that such
compliance is required from the ECOs, who are required to collect tax at source under section 52 of
the CGST Act, in respect of supplies of goods being made by unregistered persons and composition
taxpayers through them and not from other category of ECOs, who are not required to collect tax at
source under section 52 of the CGST Act
4.1 However, plain reading of the provisions of Section 122 (1B) of the CGST Act indicates that
any electronic commerce operator, regardless of whether he is liable to collect tax at source under
section 52 of the CGST Act or not, shall be liable for penal actions under sub-section (1B) of section
122 of the CGST Act for non-compliance of the provisions mentioned therein which was never
intended by the Council and which can be clearly seen from the above mentioned notifications,
wherein responsibilities have been given to the ECOs who are required to collect tax at source under
section 52 of the CGST Act. Making penal provisions of section 122 (1B) of CGST Act applicable
on ECOs, who are not required to collect consideration in respect of a taxable supply being made
through them by other suppliers, and thus are not required to collect tax at source under section 52 of
CGST Act, will make them liable for penal action in respect of actions of un-registered persons and
composition taxpayers, in respect of supplies made through their platform, whereas such ECOs are
otherwise not obliged for compliances in respect of unregistered persons and composition taxpayers,
as required vide the above mentioned notifications. Making them liable to such penal action, without
any obligation for the said activities mentioned in section 122(1B) of CGST Act, will put unnecessary
burden on such ECOs who are not obliged to collect tax at source in the first place. This was not
intended at the time of providing for such penal provision.
5. Accordingly, to redress the issue raised by the trade, Law Committee in its meeting held on
01.12.2023 deliberated on the issue and recommended that the applicability of sub-section (1B) of
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section 122 of CGST Act may be restricted to ECOs, who are required to collect tax at source under
section 52 of CGST Act, by making the following amendment retrospectively with effect from
01.10.2023 (i.e. date from which section 122(1B) of CGST Act has come into effect):
"(1B) Any electronic commerce operator, who is liable to collect tax at source under Section 52, who
—
(i) allows a supply of goods or services or both through it by an unregistered person other
than a person exempted from registration by a notification issued under this Act to make such
supply;
(ii) allows an inter-State supply of goods or services or both through it by a person who is not
eligible to make such inter-State supply; or
(iii) fails to furnish the correct details in the statement to be furnished under sub-section (4)
of section 52 of any outward supply of goods effected through it by a person exempted from
obtaining registration under this Act,
shall be liable to pay a penalty of ten thousand rupees, or an amount equivalent to the amount of tax
involved had such supply been made by a registered person other than a person paying tax under
section 10, whichever is higher.".
6. The aforesaid proposed amendment in Section 122(1B) of CGST Act will ensure that
compliances/ restrictions are mandated only for ECOs, who are actually liable to collect tax at source
under section 52 from a supplier.
VII. Amendment in section 140(7) of the CGST Act, to provide for transitional credit in
respect of invoices pertaining to services provided before appointed date and where invoices
were received by ISD before the appointed date.
Hon’ble High Court of Bombay in its order dated 29.02.2024 in the case of Siemens Ltd Vs
Union of India relating to the eligibility of transition credit in the case of an Input Service Distributor
(ISD) has mentioned the following:
“…before we proceed to adjudicate such issues, it would be appropriate that the GST
Council considers the issues inter alia the effect that Sub-Section (7) of Section 140 would bring
about, on the transition of the input tax credit, being permitted under such provision. More
particularly, as it is urged on behalf of the Petitioners, that it is ill-conceivable that the input tax
credit which was legitimately available with the petitioners before the appointed day, cannot be
permanently lost or lapsed, merely because the GST, machinery does not create an effective
procedural mechanism, for such credit to be transferred to the Electronic Credit Ledger (ECL) to be
utilized, thereby, creating a situation of such credit being permanently lost. It is also their submission
that this can never be the intention of the legislation even on a plain reading of sub-section (7) of
Section 140.
We are thus of the considered opinion that, an appropriate examination of such issues by the
GST Council shall assist the Court in taking an appropriate view of the matter.
We accordingly adjourn these proceedings to 9th August 2024.”
2.1 After this order, a reference has been received from Additional Solicitor General of India
(ASG), where he has mentioned that the High Court expects the government to carry out an
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amendment in the provisions of Section 140(7) of CGST Act, 2017, in the interest of the trade, subject
to legitimate conditions including proper scrutiny and verification.
2.2 ASG has also mentioned that an amendment may be made in Section 140(7) of CGST Act,
2017, so that the current expression “received on or after the appointed day” should be amended to
read “received before, on or after the appointed day”, prescribing some time limit for transition.
3. Analysis:
3.1 Section 140 through various sub-sections permit transitioning of credit from the erstwhile
CENVAT regime into GST. But all these provisions apply only when the supplier has paid output tax
and seeks a transition of the input tax credit (under the erstwhile regime as CENVAT credit). As Input
Service Distributor (ISD) is only required to distribute the input tax credit in respect of invoices
received for common services, he is not required to pay the output tax liability and therefore, cannot
transition the CENVAT credit on his own into the GST regime. An ISD can only distribute the ITC
within the PAN registration of the same entity/ group entities who may be suppliers paying output tax
liability.
3.2 Since, ISDs in the GST regime were required to take compulsory fresh registration by virtue
of Section 24(viii) of the CGST Act, 2017 and the Finance Act, 1994 was repealed with effect from
1st July, 2017, a way-out was required for distribution of credit of Service Tax, on account of services
received prior to the appointed day by an ISD and where the invoices relating to such services were
received after the appointed day. The transitional provision under sub-section (7) of Section 140 of
the CGST Act, specifically deals with this situation. It provides that, even after repealing of the
Finance Act, 1994, an ISD (registered under pre-GST regime) could distribute the Service Tax credit,
pertaining to services received prior to 1st July, 2017, even if the invoices were received on or after
the appointed day.
3.3 An Input Service Distributor (ISD) in the existing law, was required to distribute the
remaining credit on 30.06.2017 to its branch offices / units, who could have claimed the transitional
credit as carried forward CENVAT credit in their Electronic Credit Ledger as per sub-section (1) of
Section 140 of CGST Act by filing FORM GST TRAN-1. Further, in respect of services which were
received prior to the appointed day by the ISD, but invoices in respect of which were received on or
after the appointed day, ISD could distribute the credit in respect of such invoices to its branch offices
/ units and thereafter, the branch offices could have claimed the said credit as transitional credit, as
per the provisions of sub-section (7) of Section 140 of the CGST Act through Table 7(b) of FORM
GST TRAN 1.
3.4 In some cases, ISDs have claimed the transitional credit through the modalities prescribed in
Section 140(7) of the CGST Act, 2017 and the rules made thereunder in respect of the invoices which
were received before the appointed date. In such cases, ISD (registered under pre-GST regime) should
have distributed the credit pertaining to services received prior to 1st July, 2017, where the invoices
were also received on or before the appointed day, to its branch offices/ units through the service tax
return under the existing law. Accordingly, demands have been raised by some tax authorities against
such ISDs based on the interpretation that the credit pertaining to invoices which were received before
the appointed date cannot be transitioned using sub-section (7) of section 140 of CGST Act, and
hence, cannot be claimed in Table 7(b) of FORM GST TRAN-1. This has caused different
interpretations being taken by different field formations, resulting in denial of transition of credit.
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3.5 It is mentioned that merely because of not distributing the credit under service tax return in
respect of such invoices received prior to the appointed date, the transitional credit is being denied on
such invoices, which otherwise were eligible for availing credit under the existing law.
4. Law Committee in its meeting held on 30.05.24 deliberated on the issue and felt that
transitional credit should be available to ISDs even for such cases where inputs and input services
have been received along with invoices prior to 30.06.2017. Law Committee felt that as
recommended by ASG, an amendment is required to be made in section 140(7) of CGST Act so as to
enable the taxpayers to avail transitional credit of eligible CENVAT credit on account of input
services received by an ISD prior to the appointed day, for which invoices were also received prior to
the appointed date. Accordingly, the Law Committee recommended that the following amendment
may be made in Section 140(7) of CGST Act, 2017 retrospectively, with effect from 01st July 2017:
Amendment in Section 140 of CGST Act, 2017:
Section 140 of CGST Act, 2017:
…
(7) Notwithstanding anything to the contrary contained in this Act, the input tax
credit on account of any services received prior to the appointed day by an Input
Service Distributor shall be eligible for distribution as credit under this Act, within
such time and in such manner as may be prescribed, even if the invoices relating to
such services are received before, on or after the appointed day.

4.1. This amendment is required only in CGST Act, 2017 and no corresponding amendment is
required in SGST Act/ UTGST Act.
5. Accordingly, the Agenda Note for various law amendments in CGST Act and IGST Act, as
detailed above, is placed before the GST Council for deliberation and approval.
************

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Agenda Item 3(ii) : Law Amendment regarding time of filing appeal in GST Appellate
Tribunal.
Section 109 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the
‘CGST Act’) provides for constitution of Appellate Tribunal and its Benches thereof. The Goods and
Service Tax Appellate Tribunal (GSTAT) is the second appellate authority within the GST framework
and all the appeals against the orders of the appellate/ revisional authorities under Central as well as
State GST Act lie with the GST Appellate Tribunal constituted under the CGST Act. The Council in
its 49th and 52nd meetings had recommended that the GST Appellate Tribunal shall be constituted at
the earliest and had also recommended various amendments in CGST Act for its implementation.
2.1 Accordingly, sections 109, 110 and 114 of the CGST Act, 2017 were substituted vide Finance
Act, 2023 and brought into force with effect from 01.08.2023. Further amendments were also made in
section 110 of CGST Act, 2017 vide CGST (Second Amendment) Act, 2023 with effect from
28.12.2023 to amend some of the qualifications and conditions of the services in respect of the
Members of the Tribunal. Further, vide Statutory Order No. 4073(E) dated 14th September 2023;
Government has constituted State Benches of the GST Appellate Tribunal in various states. Also, vide
Notification No. 793(E) dated 25th October, 2023, Government has notified the Goods and Services
Tax Appellate Tribunal (GSTAT) Rules 2023, as per the recommendations of the Council. These
rules are aimed at governing the appointment, qualifications, salary, and other conditions of service
for the President and Members of the GSTAT. Further, vide Notification No. S.O. 1(E). dated 1st
January, 2024, the Government has notified the constitution of the Principal Bench of the GSTAT at
New Delhi.
2.2 It is worthwhile to mention that as per sub-section (1) of section 112 of the CGST Act, any
person aggrieved by an order passed against him under section 107 or section 108 of the said 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. Further, sub-
section (3) of section 112 of the CGST Act provides that the Commissioner may, on his own motion,
or upon request from the Commissioner of State tax or Commissioner of Union territory tax, call for
and examine the record of any order passed by the Appellate Authority or the Revisional Authority
under the CGST Act or the State Goods and Services Tax Act or the Union Territory Goods and
Services Tax Act for the purpose of satisfying himself as to the legality or propriety of the said order
and may, by order, direct any officer subordinate to him to apply to the Appellate Tribunal
within six months from the date on which the said order has been passed for determination
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of such points arising out of the said order as may be specified by the Commissioner in his
order.
2.3 Since the GST Appellate Tribunals could not be operationalized earlier due to various issues,
including the court cases, therefore, in order to remove difficulty arising in giving effect to the above
provision of the Act and to ensure that such appeals before GST Appellate Tribunal under section 112
of CGST Act do not get time barred on account of non-operationalization of the Tribunal, the
Government, on the recommendations of the Council issued the Central Goods and Services Tax
(Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. It has been provided vide the said
Order that appeal to tribunal can be made within three months from the date of communication of
order which is appealed against or date on which the President or the State President, as the case may
be, of the Appellate Tribunal enters office, whichever is later. Hence, it was assumed that there will
be no difficulty faced by the aggrieved registered person or the Government as appeal to the tribunal
in terms of section 112 of the CGST Act would not get time barred and will be valid if filed within
three months (six months in case of appeal by the Government) from the date on which President or
the State President of the Appellate Tribunal enters office.
3. It is mentioned that the President of the Principal Bench has been appointed by the
Government and the President of the Principal Bench has entered office on 6th May, 2024.. Further, as
per the revised provisions of section 109 and 110 of CGST Act, there is no provision for State
President for the State Benches. Accordingly, it is imperative that as the President of the Principal
Bench has entered office, then as per the Central Goods and Services Tax (Ninth Removal of
Difficulties) Order, 2019 dated 3.12.2019, the period of 3 months for the taxpayer (and 6 months for
the department) will start from the date on which the President of the Principal Bench has entered
office (i.e. from 06.05.2024) or the date of communication of order sought to be appealed against,
whichever is later, for the purpose of filing the appeal before the Appellate Tribunal. However, as
appointment of other Judicial and Technical Members of the Principal Bench as well as Judicial and
Technical Members of various State Benches may take further time, these benches will actually start
functioning only when the required Members of the Bench are appointed and enter office.
3.1 Further, there may be variation in the time by which Principal Bench and various State
Benches come into operation as there may be variation between various states in appointment of
Members and operationalization of their respective State Benches.
4. Accordingly, there may be a need to revise the time limit for filing appeal in the Appellate
Tribunal in terms of section 112 of the CGST Act. As per section 172 of CGST Act, any removal of
difficulty order can be issued only under the said section only within a period of five years from the
date of commencement of CGST Act, i.e. within 5 years from 01.07.2017. Accordingly, no new
removal of difficulty order or any amendment in an order for removal of difficulty can be issued after
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30.06.2022. Accordingly, any further amendment in the provision for time limit for filing appeal in
GST Appellate Tribunal against an order of the appellate/ revisional authority requires amendment in
section 112 of CGST Act. While making such amendment, a provision is required to be incorporated
in section 112 of CGST Act for counting of three months for filing appeals in Tribunal from a date to
be notified by the Government, in respect of orders of appellate authority passed before such
notification.
4.1 The said issue was deliberated by the Law Committee in its meeting held on 25.04.2024 and
the Law Committee recommended the following amendment in sub-section (1) of section 112:
“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.:-
i. the date on which the order sought to be appealed against is communicated to the
person preferring the appeal; or
ii. the date, as may be notified by the Government, on the recommendations of the
Council, for the purpose of filing appeal before the Appellate Tribunal under this Act,
whichever is later.
4.2 Further, Law Committee in its meeting held on 25.04.2024 recommended the following
amendment in sub-section (3) of section 112:
(3) The Commissioner may, on his own motion, or upon request from the Commissioner of
State tax or Commissioner of Union territory tax, call for and examine the record of any order
passed by the Appellate Authority or the Revisional Authority under this Act or the State
Goods and Services Tax Act or the Union Territory Goods and Services Tax Act for the
purpose of satisfying himself as to the legality or propriety of the said order and may, by
order, direct any officer subordinate to him to apply to the Appellate Tribunal within six
months from the date on which the said order has been passed.:-
i. the date on which the said order has been passed; or
ii. the date, as may be notified by the Government, on the recommendations of the
Council, for the purpose of filing application before the Appellate Tribunal under this
Act,
whichever is later, for determination of such points arising out of the said order as may be
specified by the Commissioner in his order.
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5. Also, Law Committee in its meeting held on 25.04.2024 discussed that a separate notification
will be required to be issued on the recommendations of the GST Council for notifying the date for
the purpose of filing appeals or applications before the Appellate Tribunal. This date can be decided
based on the readiness of the functionality in respect of Tribunal on the portal as well as based on the
status of appointment of Members of various Benches as well as operational readiness of the Benches
of the Tribunal.
6. Further, it was also recommended by the Law Committee in its meeting held on 25.04.2024
that once the said law amendments are done and made operative, the Central Goods and Services
Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019, may be rescinded. It was also
recommended by the Law Committee that the amendments proposed in Para 4.1 and 4.2 above in sub-
section (1) and sub-section (3) of section 112 of CGST Act, may be brought into effect before the
completion of three months from the date on which the President of the Appellate Tribunal has
entered into office.
7. Also, as per sub-section (6) of section 112 of the CGST Act, the Tribunal is given the power
to admit the appeal within three months after the expiry of the appeal filing period of 3 months by the
taxpayer as provided in sub-section (1) of the said section. However, similar provision is not provided
for allowing the appeals to be filed by the department in the Tribunal under sub-section (3) of section
112 of CGST Act beyond the period of six months specified therein. Therefore, Law Committee in its
meeting held on 25.04.2024 recommended that the Tribunal may be empowered to entertain appeals
from the department also for a further period of 3 months after expiry of the period of 6 months as
provided in sub-section (3) of the section 112 of CGST Act, in case the Tribunal is satisfied that there
was a sufficient cause for such delay. Accordingly, following amendment in sub-section (6) of section
112 was recommended by the Law Committee:
“(6) The Appellate Tribunal may admit an appeal within three months after the expiry of the
period referred to in sub-section (1), or permit the filing of an application within three
months after the expiry of the period referred to in sub-section (3), or permit the filing of a
memorandum of cross-objections within forty-five days after the expiry of the period
referred to in sub-section (5) if it is satisfied that there was sufficient cause for not presenting
it within that period.”
8. The Agenda Note is placed before the GST Council for deliberation and approval.

*******
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Agenda Item 3 (iii) : Law Amendment regarding GST Appellate Tribunal.
(a) providing for sunset clause for Anti-Profiteering provisions under the GST laws and the
handling of Anti-Profiteering cases under Section 171 of the Central Goods and Services Act,
2017 by Appellate Tribunal.
(b) providing for enabling provision for notifying the scope of cases that can be heard by the
Principal Bench of GSTAT only.
The Central Government had constituted the National Anti-Profiteering Authority (NAA) to
handle the cases relating to anti-profiteering. NAA was operational until November 2022. Vide
Notification dated 23rd November, 2022, the Competition Commission of India (CCI) was empowered
to examine the anti-profiteering cases w.e.f. 01.12.2022. Since December 2022, CCI has disposed-of
27 cases (as on 29th February 2024) and total of 140 cases are pending adjudication. 184 cases are
pending in various judicial fora where the orders of CCI/NAA have been challenged.
2.1. Anti-profiteering provisions in Section 171 of the CGST Act were meant to be transitional
provision post the implementation of GST regime in 2017. It was intended to ensure that the benefits
of reduction in tax rates due to implementation of GST would get passed on to the ultimate customers
and the businesses do not profit from such statutory exercise.
2.2. GST is in the seventh year of its implementation. Number of complaints being initiated in the
last 12 months is 10 (on an average less than 1 per month). Transition to GST regime has more or less
stabilized. Moreover, the price reductions as the means to pass on benefits of any changes in GST
may also be dependent on other market forces.
2.3 Law Committee in its meeting held on 07.06.2024 deliberated on the issue and observed that
since substantial time-period has passed since the introduction of the GST law, it may be prudent to
re-assess the relevance of the Anti-profiteering provisions.
3. In the above context, the Law Committee felt that there is a need to introduce a sunset date in
Section 171 of the CGST Act, which deals with the anti-profiteering measures, so as to allow filing of
any application under anti-profiteering provisions only upto the said date. The Law Committee,
accordingly, recommended the following:
• To amend the Section 171 of the CGST Act by inserting a proviso to sub-section (2)
of the said section to provide for power to the Government to notify the date from
which the Authority under section 171 of the CGST Act will not accept any request
for examination as to whether input tax credits availed by any registered person or
the reduction in the tax rate have actually resulted in a commensurate reduction in the
price of the goods or services or both supplied by him.
• To insert an Explanation in the said sub-section that “request for examination” in the
said proviso means the written application filed by an applicant for such examination
• To issue a notification specifying 1st April 2025 as the said date under proviso to the
said sub-section.

4. Further, Law Committee also took note of the inability expressed by CCI to handle anti-
profiteering cases as that is not their core function and accordingly, CCI has requested the mandate
for adjudication of anti-profiteering matters may be given to an appropriate GST authority. In order to
ensure that there is expeditious disposal of pending cases, Law Committee recommended that the
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Principal Bench of GST Appellate Tribunal may be given the mandate to adjudicate anti-profiteering
cases under section 171 of the CGST Act. For doing the same, Law Committee recommended:
• Amendment of sub-section (2) of section 171 of the CGST Act to provide for
enabling power to notify Principal Bench of GST Appellate Tribunal as an Authority
to examine anti-profiteering cases.
• Amendment of section 109 of CGST Act (insertion of sub-section 5A in section
109) to provide the power to notify the Principal Bench of GST Appellate Tribunal as
an Authority to examine anti-profiteering cases.
• Notification to notify Principal Bench of GST Appellate Tribunal to act as an
Authority to handle anti-profiteering cases.

5. It was further observed that as per proviso to section 109(5) of CGST Act, cases in which one
of the issues relates to place of supply, then the said case would be heard only by the Principal Bench
of GSTAT. As per section 109(6) of the CGST Act, the President has the power to distribute the
business of the Appellate Tribunal among the Benches and may transfer cases from one Bench to
another. Law Committee felt that it may be desiarable to have an enabling provision in section 109 of
the CGST Act so as to notify the class of cases which would be heard only by the Principal Bench, so
that there is uniformity in the implementation of GST Law across the Country.
5.1 Accordingly, Law Committee recommended that a proviso may be inserted in sub-section (5)
of section 109 of the CGST Act to enable the Government to notify, as per the recommendations of
the Council, other cases or class of cases which shall be heard only by the Principal Bench of the
Appellate Tribunal.
6. Accordingly, as per discussions in Para 3, 4 and 5 above, the following recommendations
were made by the Law Committee:
(i) Amendment in Section 171 of CGST Act:
“171. Antiprofiteering measure.— (1) Any reduction in rate of tax on any supply of goods
or services or the benefit of input tax credit shall be passed on to the recipient by way of
commensurate reduction in prices.
(2) The Central Government may, on recommendations of the Council, by notification,
constitute an Authority, or empower an existing Authority constituted under any law for the
time being in force, or empower the Appellate Tribunal constituted under this Act, to examine
whether input tax credits availed by any registered person or the reduction in the tax rate have
actually resulted in a commensurate reduction in the price of the goods or services or both
supplied by him.
Provided that the Government may by notification, on the recommendations of the Council,
specify the date from which the said Authority will not accept any request for examination as
to whether input tax credits availed by any registered person or the reduction in the tax rate
have actually resulted in a commensurate reduction in the price of the goods or services or
both supplied by him.

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Explanation. - For the purpose of proviso to this sub-section, ‘request for examination’ shall
mean the written application filed by an applicant requesting for examination as to whether
input tax credits availed by any registered person or the reduction in the tax rate have actually
resulted in a commensurate reduction in the price of the goods or services or both supplied by
him.
(3)…………………….
Explanation 1.-……………………..

Explanation 2.- For the purpose of this section, the reference to the expression ― “Authority”
shall include reference to the “Appellate Tribunal” if so empowered under the sub-section (2).

(ii) Notification under Section 171 of CGST Act to provide for the sunset date:
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE

NOTIFICATION No. xx/202x
New Delhi, the xx xxxxxxx, 202x
S.O…...(E).- In exercise of the powers conferred by sub-section (2) of section 171 of the Central
Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, hereby specifies 1st day of
April, 2025 as the date from which the Authority referred to in the said section will not accept any
request for examination as to whether input tax credits availed by any registered person or the
reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods
or services or both supplied by him.

2. This notification shall come into force with effect from its publication in the Official Gazette.

(iii) Amendment in Section 109 of CGST Act:
“Section 109. Constitution of Appellate Tribunal and Benches thereof.- (1) The
Government shall, on the recommendations of the Council, by notification, establish with
effect from such date as may be specified therein, an Appellate Tribunal known as the Goods
and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the
Appellate Authority or the Revisional Authority, or for adjudicating or examining such other
matters as may be notified by the Government on the recommendations of the Council.
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….
(5) The Principal Bench and the State Bench shall hear appeals against the orders passed by
the Appellate Authority or the Revisional Authority:
Provided that the cases in which any one of the issues involved relates to the place of supply,
shall be heard only by the Principal Bench:
Provided further that the Government may, on the recommendations of the Council, notify
other cases or class of cases which shall be heard only by the Principal Bench.
(5A) The Principal Bench shall also adjudicate or examine such other matters as may be
notified by the Government on the recommendations of the Council.
(6) Subject to the provisions of sub-section (5) and (5A), the The President shall, from time to
time, by a general or special order, distribute the business of the Appellate Tribunal among
the Benches and may transfer cases from one Bench to another.
………………………………………………………………………………………..”
(iv) Notification to notify Principal Bench of GST Appellate Tribunal:
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
NOTIFICATION No. xx/202x
New Delhi, the xx xxxxxxx, 202x

S.O…...(E).- In exercise of the powers conferred by sub-section (2) of section 171 read with sub-
sections (1) and (5A) of section 109 of the Central Goods and Services Tax Act, 2017 (12 of 2017),
the Central Government, on the recommendations of the Goods and Services Tax Council, hereby
empowers the Principal Bench of the Appellate Tribunal constituted under sub-section (3) of section
109 of the said Act, to examine whether input tax credits availed by any registered person or the
reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods
or services or both supplied by him.

2. This notification shall come into force with effect from xx day of xxxxx, 202x.

7. Accordingly, the Agenda Note is placed before the GST Council for deliberation.

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Agenda Item 3 (iv): Amendments in Section 73 and Section 74 of CGST Act, 2017 and insertion
of a new Section 74A in CGST Act, to provide for common time limit for issuance of demand
notices and orders irrespective of whether case involves fraud, suppression, wilful misstatement
etc., or not.
1. Background:
1.1 Section 73 of the Central Goods and Services Tax Act (hereinafter referred to as the ‘CGST
Act’) deals with the determination of tax not paid, short paid, erroneously refunded, or where input
tax credit has been wrongly availed or utilized for any reason other than fraud, suppression of facts or
wilful misstatement. Under this section, the time limit for issuance of demand order is specified (i.e.,
three years from the due date for filing of annual returns or from the date of erroneous refund) and the
time limit for issuance of demand notice is at least three months prior to the time limit specified for
issuing an order.
1.2 Unlike Section 73, Section 74 specifically deals with cases involving fraud, suppression of
facts or wilful misstatement with the intention to evade tax. Under this Section, the time limit for
issuance of the order is within five years from the due date for filing of annual returns or from the date
of erroneous refund, and the time limit for issuance of demand notice is at least six months prior to the
time limit specified for issuing the order under this section.
2. The said provisions are reproduced below, for ease of reference:
2.1 Section 73 of the CGST Act, 2017:
Section 73. Determination of tax not paid or short paid or erroneously refunded or
input tax credit wrongly availed or utilised for any reason other than fraud or any
willful-misstatement or suppression of facts.-
(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded, or where input tax credit has been wrongly availed or
utilised for any reason, other than the reason of fraud or any wilful-misstatement or
suppression of facts to evade tax, he shall serve notice on the person chargeable with
tax which has not been so paid or which has been so short paid or to whom the
refund has erroneously been made, or who has wrongly availed or utilised input tax
credit, requiring him to show cause as to why he should not pay the amount specified
in the notice along with interest payable thereon under section 50 and a penalty
leviable under the provisions of this Act or the rules made thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least three
months prior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.
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(4) The service of such statement shall be deemed to be service of notice on such
person under sub-section (1), subject to the condition that the grounds relied upon for
such tax periods other than those covered under sub-section (1) are the same as are
mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under subsection (1)
or, as the case may be, the statement under sub-section (3), pay the amount of tax
along with interest payable thereon under section 50 on the basis of his own
ascertainment of such tax or the tax as ascertained by the proper officer and inform
the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve any notice
under sub-section (1) or, as the case may be, the statement under sub-section (3), in
respect of the tax so paid or any penalty payable under the provisions of this Act or
the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under sub-section
(5) falls short of the amount actually payable, he shall proceed to issue the notice as
provided for in sub-section (1) in respect of such amount which falls short of the
amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) or sub-section (3)
pays the said tax along with interest payable under section 50 within thirty days of
issue of show cause notice, no penalty shall be payable and all proceedings in respect
of the said notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by
person chargeable with tax, determine the amount of tax, interest and a penalty
equivalent to ten per cent. of tax or ten thousand rupees, whichever is higher, due
from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within three years
from the due date for furnishing of annual return for the financial year to which the
tax not paid or short paid or input tax credit wrongly availed or utilised relates to or
within three years from the date of erroneous refund.
(11) Notwithstanding anything contained in sub-section (6) or sub-section (8),
penalty under sub-section (9) shall be payable where any amount of self-assessed tax
or any amount collected as tax has not been paid within a period of thirty days from
the due date of payment of such tax.
2.2 Section 74 of the CGST Act, 2017:
Section 74. Determination of tax not paid or short paid or erroneously refunded or
input tax credit wrongly availed or utilised by reason of fraud or any willful-
misstatement or suppression of facts.-
(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded or where input tax credit has been wrongly availed or
utilised by reason of fraud, or any wilful-misstatement or suppression of facts to
evade tax, he shall serve notice on the person chargeable with tax which has not been
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so paid or which has been so short paid or to whom the refund has erroneously been
made, or who has wrongly availed or utilised input tax credit, requiring him to show
cause as to why he should not pay the amount specified in the notice along with
interest payable thereon under section 50 and a penalty equivalent to the tax
specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six months
prior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be service of
notice under sub-section (1) of section 73, subject to the condition that the grounds
relied upon in the said statement, except the ground of fraud, or any wilful-
misstatement or suppression of facts to evade tax, for periods other than those
covered under subsection (1) are the same as are mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under sub-section
(1), pay the amount of tax along with interest payable under section 50 and a penalty
equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of
such tax or the tax as ascertained by the proper officer and inform the proper officer
in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve any notice
under sub-section (1), in respect of the tax so paid or any penalty payable under the
provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under sub-section
(5) falls short of the amount actually payable, he shall proceed to issue the notice as
provided for in sub-section (1) in respect of such amount which falls short of the
amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays the said tax
along with interest payable under section 50 and a penalty equivalent to twenty-five
per cent. of such tax within thirty days of issue of the notice, all proceedings in
respect of the said notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by the
person chargeable with tax, determine the amount of tax, interest and penalty due
from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within a period of
five years from the due date for furnishing of annual return for the financial year to
which the tax not paid or short paid or input tax credit wrongly availed or utilised
relates to or within five years from the date of erroneous refund.
(11) Where any person served with an order issued under sub-section (9) pays the tax
along with interest payable thereon under section 50 and a penalty equivalent to fifty
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per cent. of such tax within thirty days of communication of the order, all proceedings
in respect of the said notice shall be deemed to be concluded.
Explanation 1.- For the purposes of section 73 and this section,-
(i) the expression "all proceedings in respect of the said notice" shall not include
proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person liable
to pay tax and some other persons, and such proceedings against the main person
have been concluded under section 73 or section 74, the proceedings against all the
persons liable to pay penalty under sections 122 and 125 are deemed to be
concluded.
Explanation 2.- For the purposes of this Act, the expression "suppression" shall
mean non-declaration of facts or information which a taxable person is required to
declare in the return, statement, report or any other document furnished under this
Act or the rules made thereunder, or failure to furnish any information on being
asked for, in writing, by the proper officer.
3.1 It can be seen that sub-section (2) read with sub-section (10) of section 73 of the CGST Act
defines the period for issuance of demand notice under the said section. Similarly, sub-section (2) read
with sub-section (10) of section 74 of the CGST Act defines the period for issuance of demand notice
under the said section. This is to say that the sections 73 and 74 of CGST Act prescribe the time limit
for issuance of demand order, and the time limit for issuance of demand notice is counted backward
from the same, unlike earlier laws like Central Excise Act, Service Tax etc.
3.2 Feedback was received from the field formations that the time available for issuance of
adjudication order under sections 73 and 74 of the CGST Act is not sufficient to complete the process
in a sound legal way. It was submitted that the process of adjudication is a bilateral exercise which
involves the involvement and inclination of both the taxpayer as well as the tax authority to dispose of
the same in a time bound manner. During the adjudication process, the respondent is required to be
provided with an opportunity to explain his stand and present evidence of the same. This is also a
time- consuming process since the taxpayer ma need ample time and opportunity to present his case.
Furthermore, the evidence presented in the hearing process at times needs to be verified and some
additional evidence is also required to be presented. At times, the adjudicating authority needs to
verify the submissions from a third party which requires additional time.
3.3 The matter was examined by the Law Committee in its meetings held on 18.03.2024 and
16.05.2024. It was observed that as per the existing provisions, where the demand notice is issued on
the last date permissible as per the above sections, then the time period for issuance of order for the
same is only three months and six months form the said date of issuance of the said demand notice
under section 73 and 74 respectively.
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3.4 Further, it was noted that sub-section (10) of section 75 of the CGST Act mentions that the
proceedings shall be deemed to be concluded where the order is not issued within the time period
specified under section 73 or 74 respectively. The relevant extract of the said sub-section is
reproduced hereunder:
"(10) The adjudication proceedings shall be deemed to be concluded, if the order is not
issued within three years as provided for in sub-section (10) of section 73 or within five years
as provided for in sub-section (10) of section 74."
3.5 It was felt that this creates a heavy burden on the officers as the amount of time required to
dispose of the cases by issuing demand order does not take into account the complexity of the cases,
as well as the time which may be required or sought by the noticee to reply to the demand notice and
to present his case along with required documents/ evidences.
3.6 It was also noted that even though an adjudication order can be issued any time before the
period mentioned in Section 73(10) and Section 74(10) of CGST Act, the general tendency of the
proper officers in the field is to issue the demand notice just before the deadline, i.e. just 3 months or
6 months prior to the last date mentioned in Section 73(10) and Section 74(10), respectively. This
only gives them a period of 3 months and 6 months respectively, to adjudicate all the demand notices
as per the time limit mentioned in Section 73(2) and Section 74(2) of the CGST Act. Therefore, it was
felt that there may be a need to amend Sections 73 and 74 of the CGST Act, 2017, in order to provide
for specific time limit for issuance of demand notice based on the due date for filing of Annual
returns, and to determine the time limit for issuance of demand order relative to the date of issue of
the SCN, by giving six months and twelve months respectively for adjudication of orders under
Section 73 and 74 respectively.
3.7 At the same time, the time period available for adjudication process in specific cases based on
certain circumstances (like in case of adjudicating officers appointed to election duty, cases where the
taxpayer requests for additional time to submit documents, cases involving cross-examination, cases
where a new officer has taken charge as the adjudicating authority and the opportunity for personal
hearing needs to be provided again, etc.,) was required to be flexible and therefore, it was felt that
there may also be a need to have the enabling provision for increasing the time period available for
adjudication process in such circumstances, by providing powers to the Commissioner, or an officer
authorised by the Commissioner sufficiently senior in rank, for extension of time limit for
adjudication, in those specific cases, similar to that provided in Customs Act, 1962.
4. As the time period of issuance of order is proposed to be increased to six months and twelve
months from the date of demand notices issued under Section 73 and Section 74 respectively, there
also arose a need to have a relook at the time period provided for payment of entire tax demanded
along with interest and reduced penalty by the taxpayer for concluding the proceedings under the said
sections.
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4.1 In this regard, it is to be mentioned that sub-section (8) Section 73 states that the person
chargeable with tax may pay the tax along with interest within thirty days of issue of demand notice,
no penalty shall be payable and all proceedings in respect of said notice shall be deemed to be
concluded. Similar provisions are present in sub-section (8) of Section 74 which states that the
person chargeable with tax may pay the tax along with interest and a penalty of twenty five per cent
of such tax within thirty days of issue of SCN, all proceedings in respect of said notice shall be
deemed to be concluded.
4.2 The Law Committee felt that the time period of thirty days is too short in order for the
taxpayers to analyse the said notice, and take a decision for payment of full amount of tax demanded,
along with interest, and reduced penalty, as applicable. After expiry of the said time period of thirty
days, even if the taxpayer is willing to comply with the demand notice and pay the full amount of tax
demanded, along with interest and reduced penalty, for conclusion of the proceedings, he is not able
to avail the benefit of the same. In view of above, the Law Committee recommended to increase the
said time limit from ‘30 days’ to ‘60 days’ under the sub-section (8) of Section 73 and sub-section (8)
of Section 74.
5.1 During the above discussions, it also emerged that there may be a case for providing same
time limit under Section 73 and Section 74 of the CGST Act for issuance of demand notices/ demand
orders. As discussed above, as per the present formulation of Sections 73 and 74 of CGST Act, the
orders are to be issued within the period of three years and five years, respectively, from the due date
for furnishing annual returns for the relevant financial year. It has been found with the past experience
in Central Excise and Service Tax that, in a large number of the cases where the officers have issued
demand notices invoking reasons of fraud, suppression or willful misstatement, such demands get
dropped in higher appellate/ judicial fora, as they are held non sustainable solely for the reason that
the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been
established against the person to whom the notice was issued.
5.2 It is to be noted that in GST regime, Section 75(2) of CGST Act, 2017 provides that if the
notice is issued under section 74(1) of CGST Act, but if concluded in the appeal proceedings/ court
proceedings that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax
have not been established against the person to whom the notice was issued, then the tax payable
needs to be redetermined as if notice were issued under Section 73(1). In such cases, the demand for
the tax periods which are beyond the limitation period prescribed by Section 73 would have to be
dropped, thus losing out on a portion of revenue.

5.3 Therefore, Law Committee felt that it may be desirable that to avoid such revenue loses on
account that show cause notices are issued under Section 74(1) could not be established on account of
fraud, suppression or willful misstatement, there may be a need to have the same the limitation period
for issuing demand notices and orders under Section 73 and Section 74 of CGST Act, 2017, while
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keeping a higher penalty for cases involving fraud, willful misstatement, or suppression of facts, at
the levels as they are currently. This will aid in safeguarding at least the tax demand, as in such cases
only the penalty amounts need to get re-determined based on whether the case involves fraud, willful
misstatement, or suppression of facts, or not.

5.4 In this regard, Law Committee recommended that the limitation period for issuing demand
notices, may be made forty-two months from the relevant date, and the time limit for issuance of
demand orders may be kept at twelve months from the date of issuance of the demand notice,
irrespective of whether the charges of fraud, suppression or willful misstatement of facts are invoked
or not. It was also recommended that the flexibility of time limit for issuance of demand order as
proposed earlier may also be kept, i.e., in cases where the proper officer is not able to issue the order
within the period specified above, the Commissioner, or an officer authorized by the Commissioner
senior in rank to the proper officer but not below the rank of Joint Commissioner of Central Tax,
may, extend the said period further by a maximum of six months. This may be done by the
Commissioner or an officer authorized by him, having regard to the circumstances to be recorded in
writing, under which the proper officer is prevented from issuing the order under sub-section (6),
before the expiry of the specified period.

5.5 As the due date for filing of annual returns for the FY 2023-24 falls on 31st December 2024,
Law Committee recommended that these amendments may be made prospective, in respect of
demands for the period FY 2023-24 onwards. Therefore, Law Committee, after due deliberations in
its meetings held on 18.03.2024 and 16.05.2024, recommended the insertion of a new section, Section
74A to the CGST Act, 2017, as detailed below. The Law Committee also recommended amendments
in Sections 73 and 74 of the CGST Act, to restrict its applicability up to FY 2022-23.

6. The proposed amendments, for achieving the above, are as detailed below:
Section 73 of CGST Act:

Determination of tax pertaining to the period upto financial year 2022-23, not paid
or short paid or erroneously refunded or input tax credit wrongly availed or utilized
for any reason other than fraud or any wilful misstatement or suppression of facts.

(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded, or where input tax credit has been wrongly availed or
utilised for any reason, other than the reason of fraud or any wilful-misstatement or
suppression of facts to evade tax, he shall serve notice on the person chargeable with
tax which has not been so paid or which has been so short paid or to whom the refund
has erroneously been made, or who has wrongly availed or utilised input tax credit,
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requiring him to show cause as to why he should not pay the amount specified in the
notice along with interest payable thereon under section 50 and a penalty leviable
under the provisions of this Act or the rules made thereunder.

(2) The proper officer shall issue the notice under sub-section (1) at least three
months prior to the time limit specified in sub-section (10) for issuance of order.
……
(10) The proper officer shall issue the order under sub-section (9) within three years
from the due date for furnishing of annual return for the financial year to which the
tax not paid or short paid or input tax credit wrongly availed or utilised relates to or
within three years from the date of erroneous refund.

Section 74 of CGST Act:

Determination of tax pertaining to the period upto financial year 2022-23, not paid
or short paid or erroneously refunded or input tax credit wrongly availed or utilized
by reason of fraud or any wilful-misstatement or suppression of facts.

(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded or where input tax credit has been wrongly availed or
utilised by reason of fraud, or any wilful-misstatement or suppression of facts to
evade tax, he shall serve notice on the person chargeable with tax which has not been
so paid or which has been so short paid or to whom the refund has erroneously been
made, or who has wrongly availed or utilised input tax credit, requiring him to show
cause as to why he should not pay the amount specified in the notice along with
interest payable thereon under section 50 and a penalty equivalent to the tax specified
in the notice.

(2) The proper officer shall issue the notice under sub-section (1) at least six months
prior to the time limit specified in sub-section (10) for issuance of order.
…….
(10) The proper officer shall issue the order under sub-section (9) within five years
from the due date for furnishing of annual return for the financial year to which the
tax not paid or short paid or input tax credit wrongly availed or utilised relates to or
within five years from the date of erroneous refund.

Section 74A of CGST Act:

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Section 74A. Determination of tax pertaining to financial year 2023-24 onwards not
paid or short paid or erroneously refunded or input tax credit pertaining to
financial year 2023-24 onwards wrongly availed or utilized, for any reason.-

(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded or where input tax credit has been wrongly availed or
utilised, he shall serve notice on the person chargeable with tax which has not been
so paid or which has been so short paid or to whom the refund has erroneously been
made, or who has wrongly availed or utilised input tax credit, requiring him to show
cause as to why he should not pay the amount specified in the notice along with
interest payable thereon under section 50 and a penalty leviable under the provisions
of this Act or the rules made thereunder:
Provided that no notice shall be issued, if the tax which has not been paid or short
paid or erroneously refunded or where input tax credit has been wrongly availed or
utilized in a financial year is less than one thousand rupees .

(2) The proper officer shall issue the notice under sub-section (1) within forty-two
months from the due date for furnishing of annual return for the financial year to
which the tax not paid or short paid or input tax credit wrongly availed or utilised
relates to or within forty-two months from the date of erroneous refund.

(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.

(4) The service of such statement shall be deemed to be service of notice on such
person under sub-section (1), subject to the condition that the grounds relied upon for
such tax periods other than those covered under sub-section (1) are the same as are
mentioned in the earlier notice.

(5) The penalty in case where any tax which has not been paid or short paid or
erroneously refunded, or where input tax credit has been wrongly availed or utilized,
(i) for any reason, other than the reason of fraud or any wilful-
misstatement or suppression of facts to evade tax, shall be equivalent to ten per cent.
of tax or ten thousand rupees, whichever is higher, due from such person.
(ii) for the reason of fraud or any wilful-misstatement or suppression of
facts to evade tax, shall be equivalent to the tax specified in the notice.

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(6) The proper officer shall, after considering the representation, if any, made by the
person chargeable with tax, determine the amount of tax, interest and penalty due
from such person and issue an order;

(7) The proper officer shall issue the order under sub-section (6) within twelve
months from the date of issuance of notice specified in sub-section (2):
Provided that where the proper officer is not able to issue the order within the
specified period, the Commissioner, or an officer authorised by the Commissioner
senior in rank to the proper officer but not below the rank of Joint Commissioner of
Central Tax, may, having regard to the circumstances to be recorded in writing,
under which the proper officer was prevented from issuing the order under sub-
section (6), before the expiry of the specified period, extend the said period further
by a maximum of six months.

(8) The person chargeable with tax where any tax which has not been paid or
short paid or erroneously refunded, or where input tax credit has been wrongly
availed or utilised for any reason, other than the reason of fraud or any wilful-
misstatement or suppression of facts to evade tax, may,
(i) before service of notice under sub-section (1), pay the amount of tax
along with interest payable under section 50 of such tax on the basis of his own
ascertainment of such tax or the tax as ascertained by the proper officer and inform
the proper officer in writing of such payment, and the proper officer, on receipt of
such information shall not serve any notice under sub-section (1) or the statement
under sub-section (3), as the case may be, in respect of the tax so paid or any penalty
payable under the provisions of this Act or the rules made thereunder;
(ii) pay the said tax along with interest payable under section 50 within
sixty days of issue of show cause notice, no penalty shall be payable and all
proceedings in respect of the said notice shall be deemed to be concluded.

(9) The person chargeable with tax, where any tax has not been paid or short
paid or erroneously refunded or where input tax credit has been wrongly availed or
utilised by reason of fraud, or any wilful-misstatement or suppression of facts to
evade tax, may,
(i) before service of notice under sub-section (1), pay the amount of tax
along with interest payable under section 50 and a penalty equivalent to fifteen per
cent. of such tax on the basis of his own ascertainment of such tax or the tax as
ascertained by the proper officer and inform the proper officer in writing of such
payment, and the proper officer, on receipt of such information, shall not serve any
notice under sub-section (1), in respect of the tax so paid or any penalty payable
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under the provisions of this Act or the rules made thereunder;
(ii) pay the said tax along with interest payable under section 50 and a
penalty equivalent to twenty-five per cent. of such tax within sixty days of issue of the
notice, all proceedings in respect of the said notice shall be deemed to be concluded;
(iii) pay the tax along with interest payable thereon under section 50 and
a penalty equivalent to fifty per cent. of such tax within sixty days of communication
of the order, all proceedings in respect of the said notice shall be deemed to be
concluded.

(10) Where the proper officer is of the opinion that the amount paid under clause (i)
of sub-section (8) or clause (i) of sub-section (9) falls short of the amount actually
payable, he shall proceed to issue the notice as provided for in sub-section (1) in
respect of such amount which falls short of the amount actually payable.

(11) Notwithstanding anything contained in clause (i) or clause (ii) of sub-section
(8), penalty under sub-section (5) shall be payable where any amount of self-assessed
tax or any amount collected as tax has not been paid within a period of thirty days
from the due date of payment of such tax.

Explanation 1.- For the purposes of this section,-

(i) the expression "all proceedings in respect of the said notice" shall not include
proceedings under section 132;

(ii) where the notice under the same proceedings is issued to the main person liable to
pay tax and some other persons, and such proceedings against the main person have
been concluded under this section, the proceedings against all the persons liable to
pay penalty under sections 122 and 125 are deemed to be concluded.
Explanation 2.- For the purposes of this Act, the expression "suppression" shall mean
non-declaration of facts or information which a taxable person is required to declare
in the return, statement, report or any other document furnished under this Act or the
rules made thereunder, or failure to furnish any information on being asked for, in
writing, by the proper officer.

7.1 It may be noted that consequential amendments may also need to be done in multiple sections
of CGST Act, 2017. Consequential amendments to Section 17(5) of the CGST Act were deliberated
in the Law Committee, and it was recommended that clause (i) of Section 17(5) may be omitted in
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respect of tax paid for FY 2023-24 onwards, as section 129 and section 130 mentioned in the said
clause pertain to detention, seizure and release of goods and conveyances in transit and confiscation
of goods or conveyances and levy of penalty, the same are no more relevant for the purpose of the
said clause. Further, after insertion of proposed section 74A in CGST Act for determination of tax
demands for FY 2023-24 onwards, there shall be no distinction between the tax demanded and paid in
terms of section 73 and section 74, and therefore there is no need to block input tax credit on the tax
paid in accordance with section 74 in the said clause for FY 2023-24 onwards. Besides, it was felt
that, that this will help in recovery of taxes demanded under Section 74A of the CGST Act, 2017.
7.3 The Law Committee also recommended other consequential amendments as detailed in
Annexure-A.
8. The recommendations of the Law Committee as detailed above are placed before the GST
Council for approval.

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Annexure-A
Consequential Amendments in CGST Act, 2017

1. Section 10(5):
Section 10. Composition levy.-
(5) If the proper officer has reasons to believe that a taxable person has paid tax under
sub-section (1) or sub-section (2A), as the case may be, despite not being eligible, such person
shall, in addition to any tax that may be payable by him under any other provisions of this Act,
be liable to a penalty and the provisions of section 73 or section 74 or section 74 A shall,
mutatis mutandis, apply for determination of tax and penalty.

2. Section 21:
Section 21. Manner of recovery of credit distributed in excess.-
Where the Input Service Distributor distributes the credit in contravention of the
provisions contained in section 20 resulting in excess distribution of credit to one or more
recipients of credit, the excess credit so distributed shall be recovered from such
recipients along with interest, and the provisions of section 73 or section 74 or section
74A, as the case may be, shall, mutatis mutandis, apply for determination of amount to be
recovered.

3. Section 35(6):
Section 35. Accounts and other records.-
(6) Subject to the provisions of clause (h) of sub-section (5) of section 17, where the
registered person fails to account for the goods or services or both in accordance with the
provisions of sub-section (1), the proper officer shall determine the amount of tax payable
on the goods or services or both that are not accounted for, as if such goods or services or
both had been supplied by such person and the provisions of section 73 or section 74 or
section 74A, as the case may be, shall, mutatis mutandis, apply for determination of such
tax.
4. Section 49 (8)(c):
Section 49. Payment of tax, interest, penalty and other amounts.-
(8) Every taxable person shall discharge his tax and other dues under this Act or the rules
made thereunder in the following order, namely:-
...
(c) any other amount payable under this Act or the rules made thereunder including the demand
determined under section 73 or section 74 or section 74A.

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5. Section 50:
Section 50. Interest on delayed payment of tax.-
(1) Every person who is liable to pay tax in accordance with the provisions of this Act or
the rules made thereunder, but fails to pay the tax or any part thereof to the Government
within the period prescribed, shall for the period for which the tax or any part thereof
remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as
may be notified by the Government on the recommendations of the Council:
Provided that the interest on tax payable in respect of supplies made during a tax period
and declared in the return for the said period furnished after the due date in accordance
with the provisions of section 39, except where such return is furnished after
commencement of any proceedings under section 73 or section 74 or section 74A in
respect of the said period, shall be payable on that portion of the tax which is paid by
debiting the electronic cash ledger.
6. Section 51(7):
Section 51(7). Tax deduction at source.-
(7) The determination of the amount in default under this section shall be made in the
manner specified in section 73 or section 74 or section 74A.

7. Section 61(3):
Section 61. Scrutiny of returns.-
(3) In case no satisfactory explanation is furnished within a period of thirty days of being
informed by the proper officer or such further period as may be permitted by him or where the
registered person, after accepting the discrepancies, fails to take the corrective measure in his
return for the month in which the discrepancy is accepted, the proper officer may initiate
appropriate action including those under section 65 or section 66 or section 67, or proceed to
determine the tax and other dues under section 73 or section 74 or section 74A.
8. Section 62 (1):
Section 62. Assessment of non-filers of returns.—
(1) Notwithstanding anything to the contrary contained in section 73 or section 74 or section
74A, where a registered person fails to furnish the return under section 39 or section 45, even
after the service of a notice under section 46, the proper officer may proceed to assess the tax
liability of the said person to the best of his judgement taking into account all the relevant
material which is available or which he has gathered and issue an assessment order within a
period of five years from the date specified under section 44 for furnishing of the annual
return for the financial year to which the tax not paid relates.
9. Section 63:
Section 63. Assessment of unregistered persons.—
Notwithstanding anything to the contrary contained in section 73 or section 74 or section
74A, where a taxable person fails to obtain registration even though liable to do so or whose
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registration has been cancelled under sub-section (2) of section 29 but who was liable to pay
tax, the proper officer may proceed to assess the tax liability of such taxable person to the
best of his judgment for the relevant tax periods and issue an assessment order within a
period of five years from the date specified under section 44 for furnishing of the annual
return for the financial year to which the tax not paid relates:
Provided that no such assessment order shall be passed without giving the person an
opportunity of being heard.
10. Section 64 (2):
Section 64. Summary assessment in certain special cases.-
(2) On an application made by the taxable person within thirty days from the date of
receipt of order passed under sub-section (1) or on his own motion, if the Additional
Commissioner or Joint Commissioner considers that such order is erroneous, he may withdraw
such order and follow the procedure laid down in section 73 or section 74 or section 74A.
11. Section 65(7):
Section 65. Audit by tax authorities.—
(7) Where the audit conducted under sub-section (1) results in detection of tax not paid or
short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper
officer may initiate action under section 73 or section 74 or section 74A.
12. Section 66(6):
Section 66. Special audit.-
(6) Where the special audit conducted under sub-section (1) results in detection of tax not
paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the
proper officer may initiate action under section 73 or section 74 or section 74A.
13. Section 75(1):
Section 75. General provisions relating to determination of tax.—
(1) Where the service of notice or issuance of order is stayed by an order of a court or
Appellate Tribunal, the period of such stay shall be excluded in computing the period
specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74 or
sub-sections (2) and (7) of section 74A, as the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court concludes that the notice
issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of
fraud or any wilful-misstatement or suppression of facts to evade tax has not been established
against the person to whom the notice was issued, the proper officer shall determine the tax
payable by such person, deeming as if the notice were issued under sub-section (1) of section
73.
(2A) Where any Appellate Authority or Appellate Tribunal or court concludes that the penalty
demanded under clause (ii) of sub-section (5) of section 74A is not sustainable for the reason
that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not
been established against the person to whom the notice was issued, the penalty shall be
payable by such person, under clause (i) of sub-section (5) of section 74A.
Agenda for 53rd GSTCM Volume 1
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…
(10) The adjudication proceedings shall be deemed to be concluded, if the order is not issued
within three years the period as provided for in sub-section (10) of section 73 or within five
years as provided for in sub-section (10) of section 74 or in sub-section (7) of section 74A.

(11) An issue on which the Appellate Authority or the Appellate Tribunal or the High Court
has given its decision which is prejudicial to the interest of revenue in some other
proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme Court
against such decision of the Appellate Authority or the Appellate Tribunal or the High Court
is pending, the period spent between the date of the decision of the Appellate Authority and
that of the Appellate Tribunal or the date of decision of the Appellate Tribunal and that of the
High Court or the date of the decision of the High Court and that of the Supreme Court shall
be excluded in computing the period referred to in sub-section (10) of section 73 or sub-
section (10) of section 74 or sub-section (7) of section 74A where proceedings are initiated by
way of issue of a show cause notice under the said sections.
(12) Notwithstanding anything contained in section 73 or section 74 or section 74A, where any
amount of self-assessed tax in accordance with a return furnished under section 39 remains
unpaid, either wholly or partly, or any amount of interest payable on such tax remains
unpaid, the same shall be recovered under the provisions of section 79.
(13) Where any penalty is imposed under section 73 or section 74 or section 74A, no penalty
for the same act or omission shall be imposed on the same person under any other provision of
this Act.
14. Section 104(1):
Section 104. Advance ruling to be void in certain circumstances.—
(1) Advance ruling to be void in certain circumstances.— (1) Where the Authority or the
Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of
section 98 or under sub-section (1) of section 101 has been obtained by the applicant or the
appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by
order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or
the rules made thereunder shall apply to the applicant or the appellant as if such advance
ruling had never been made:
Provided that no order shall be passed under this sub-section unless an opportunity of being
heard has been given to the applicant or the appellant.
Explanation.––The period beginning with the date of such advance ruling and ending with the
date of order under this sub-section shall be excluded while computing the period specified in
sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74 or sub-
sections (2) and (7) of section 74A.
15. Section 107 (11):
Section 107 . Appeals to Appellate Authority.-
(11) The Appellate Authority shall, after making such further inquiry as may be necessary,
pass such order, as it thinks just and proper, confirming, modifying or annulling the decision
Agenda for 53rd GSTCM Volume 1
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or order appealed against but shall not refer the case back to the adjudicating authority that
passed the said decision or order:
Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or
confiscating goods of greater value or reducing the amount of refund or input tax credit shall
not be passed unless the appellant has been given a reasonable opportunity of showing cause
against the proposed order:
Provided further that where the Appellate Authority is of the opinion that any tax has not been
paid or short-paid or erroneously refunded, or where input tax credit has been wrongly
availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be
passed unless the appellant is given notice to show cause against the proposed order and the
order is passed within the time limit specified under section 73 or section 74 or section
74A.
16. Section 127:
Section 127. Power to impose penalty in certain cases.—
Where the proper officer is of the view that a person is liable to a penalty and the same is not
covered under any proceedings under section 62 or section 63 or section 64 or section 73 or
section 74 or section 74A or section 129 or section 130, he may issue an order levying such
penalty after giving a reasonable opportunity of being heard to such person.

17. Section 17(5):

Section 17. Apportionment of credit and blocked credits.-
(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1)
of section 18, input tax credit shall not be available in respect of the following, namely:-
…
(i) any tax paid in accordance with the provisions of sections 74, 129 and 130 in respect
of any financial year upto FY 2022-23.


Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(v): Amendment in section 39 of CGST Act and rule 66 of CGST Rules, 2017 for
mandating NIL returns by TDS deductors and waiver of late fee for late filing of NIL FORM
GSTR-7 along with changes in FORM GSTR 07 for inserting invoice/document wise details of
tax deducted at source.
As per the provisions of sub-section (3) of Section 39 of CGST Act, 2017 read with Rule 66
of CGST Rules, 2017, a registered person required to deduct tax at source under section 51 of CGST
Act is required to furnish a return in FORM GSTR-7 for the month in which such deductions have
been made. It has been brought to the notice by some tax administrations that as FORM GSTR-7 is
only required to be filed for the months in which deductions have been made, it is difficult to monitor
the filing of the same by the TDS deductors. Accordingly, requests have been made for providing a
mechanism to allow the tax administrations to track non-filing of returns by TDS deductors and take
timely remedial action to ensure compliance by such registered persons.
2. Further, representatives of trade have also brought to notice that the extant format of FORM
GSTR-7 requires only GSTIN wise details of the tax deducted at source to be furnished in the said
form, due to which a deductee has to accept/reject the entire amount passed by a particular deductor.
Accordingly, requests have been made to make changes in FORM GSTR-7, so that invoice level
information is furnished by the deductors.
3. The matter has been examined. A combined reading of sub-section (3) of Section 39 of CGST
Act 2017 and Rule 66 of CGST Rules (reproduced below) indicates that TDS deductors are required
to furnish return in FORM GSTR-7 ‘for the months in which such deductions have been made’.
Therefore, it is clear that FORM GSTR-7 is not required to be filed for the months in which no
deduction has been made.
Section 39. Furnishing of returns.-
….
(3)Every registered person required to deduct tax at source under the provisions of section
51 shall furnish, in such form and manner as may be prescribed, a return, electronically, for
the month in which such deductions have been made within ten days after the end of such
month.
….
Rule 66. Form and manner of submission of return by a person required to deduct tax at
source.-
(1) Every registered person required to deduct tax at source under section 51 (hereafter
in this rule referred to as deductor) shall furnish a return in FORM GSTR-7 electronically
through the common portal either directly or from a Facilitation Centre notified by the
Commissioner.
(2) The details furnished by the deductor under sub-rule (1) shall be made available
electronically to each of the deductees on the common portal after filing of FORM GSTR-7
for claiming the amount of tax deducted in his electronic cash ledger after validation.
(3) The certificate referred to in sub-section (3) of section 51 shall be made available
electronically to the deductee on the common portal in FORM GSTR-7A on the basis of the
return furnished under sub-rule (1).
4. The matter was deliberated by the Law Committee in its meeting held on 16.05.2024. It was
recommended by the Law Committee that in order to have better monitoring of filing of FORM
GSTR-7 by TDS deductors, filing of return in FORM GSTR-7 may be made mandatory for each
month irrespective of whether any deductions have been made by the TDS deductors in the said
month or not. It was also felt by Law committee that no late fee should be payable in respect of
delayed filing of such nil FORM GSTR-7 returns. Further, it was recommended that the time
Agenda for 53rd GSTCM Volume 1
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limitation to furnish the return within 10 days of the end of such month may be brought under the
Rule 66(1) of CGST Rules instead of Section 39(3) of CGST Act.
5. Further, as per rule 66(2) of CGST Rules, on filing of FORM GSTR-7 by the deductors, the
details of the tax deducted at source are made available to the deductees for claiming the amount of
tax deducted in his electronic cash ledger after validation. As the format of FORM GSTR-7 requires
only GSTIN wise details of the tax deducted at source to be furnished in the said form, a deductee has
no option but to either accept or reject the entire amount passed by a particular deductor.
6. The Law committee in its meeting held on 25.04.2024 deliberated on the above matter. It was
felt that invoice wise details of tax deducted at source in FORM GSTR-7 is desirable as it would
enable the deductees to accept/reject the TDS deducted at invoice level, rather than having to
accept/reject the entire amount passed by a particular deductor. Further, the same would also help the
tax authorities in better reconciliation of FORM GSTR -7 returns of the deductors with FORM GSTR-
1 returns of the deductees.
7. In view of the above, Law committee recommended the following:-
a) sub section 3 of section 39 of CGST Act may be amended as below:
Section 39. Furnishing of returns.-

(3)Every registered person required to deduct tax at source under the provisions of
section 51 shall furnish, for every calendar month, in such form and manner as may
be prescribed, a return, electronically, of the for the month in which such deductions
have been made during the month within ten days after the end of such month., in
such form and manner and within such time, as may be prescribed.

Provided that the said registered person shall furnish a return for every calendar
month whether or not any deductions have been made during the said month.

b) Rule 66(1) of CGST Rules may be amended as below:

Rule 66. Form and manner of submission of return by a person required to deduct
tax at source.-

Every registered person required to deduct tax at source under section 51 (hereafter
in this rule referred to as deductor) shall furnish a return in FORM GSTR-7, on or
before the tenth day of the month succeeding the calendar month, electronically
through the common portal either directly or from a Facilitation Centre notified by
the Commissioner.

c) no late fee should be leviable for delayed filing of a nil return in FORM GSTR-7. The draft
notification, in this regard, as recommended by the Law Committee is enclosed as Annexure
X to this agenda note.
d) for the ease of the registered persons, GSTN may provide a functionality for single click
filing of a nil return in FORM GSTR-7 on the common portal and/ or a mobile application.
e) Table 3 and Table 4 of FORM GSTR-7 may be suitably amended to provide for invoice wise
details, amount of tax involved in the invoice, payment made and amount of tax deducted at
source. The proposed changes in FORM GSTR-7, as recommended by the Law Committee
are enclosed as Annexure Y to this agenda note.
8. Accordingly, the agenda is placed before GST Council for approval.

Agenda for 53rd GSTCM Volume 1
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Annexure X
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs

Notification
No. XX/2024 – Central Tax
New Delhi, dated the XX May, 2024

G.S.R.....(E).— In exercise of the powers conferred by section 128 of the Central Goods and Services
Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Government,
on the recommendations of the Council, hereby makes the following further amendments in the
notification of the Government of India in the Ministry of Finance (Department of Revenue), No.
22/2021– Central Tax, dated the 1st June, 2021, published in the Gazette of India, Extraordinary, Part
II, Section 3, Sub-section (i) vide number G.S.R. 366(E), dated the 1st June, 2021, namely:—

In the said notification, after the first proviso, the following proviso shall be inserted, namely: —
“Provided further that the total amount of late fee payable under section 47 of the said Act by
the registered persons who fail to furnish the return in FORM GSTR-7 for a month by the due date,
shall stand waived, where the total amount of central tax deducted at source in the said month is nil.”

[F. No. CBIC-20001/5/2024]

(Raghavendra Pal Singh)
Director
Note: The principal notification No. 22/2021– Central Tax, dated the 1st June, 2021 was published in
the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 366(E),
dated the 1st June, 2021.








Annexure Y
FORM GSTR-7
Agenda for 53rd GSTCM Volume 1
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[See rule 66 (1)]
Return for Tax Deducted at Source
Year
Month

1. GSTIN
2. (a) Legal name of the Deductor Auto Populated
(b) Trade name, if any Auto Populated

3. Details of the tax deducted at source

(Amount in Rs. for all Tables)
GSTIN
of
deductee
Amount paid to deductee on
which tax is deducted
Amount of tax deducted at source
Integrated
Tax
Central Tax State/UT
Tax
1 2 3 4 5


GSTIN
of
deductee
Invoice/ document
details
Amount
paid to
deductee
liable for
TDS
Amount of tax deducted at
source
No. Date Value Integrated
tax
Central
tax
State/UT
tax
1 2 3 4 5 6 7 8

4. Amendments to details of tax deducted at source in respect of any earlier tax period
Original details Revised details
Month GSTIN of
deductee
Amount paid to
deductee on
which tax is
deducted
GSTIN
of
deductee
Amount paid to
deductee on
which taxis
deducted
Amount of tax deducted at source
Integrated
Tax
Central
Tax
State/UT
Tax
1 2 3 4 5 6 7 8





Agenda for 53rd GSTCM Volume 1
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Original details Revised details
Month GSTIN
of
deductee
Invoice/ document
details
Amount
paid to
deductee
liable
for TDS
GSTIN
of
deductee
Invoice/ document
details
Amount
paid to
deductee
liable
for TDS
Amount of tax deducted at
source
No. Date value No. Date value Integrated
tax
Central
tax
State/
UT
tax
1 2 3 4 5 6 7 8 9 10 11 12 13 14

5. Tax deduction at source and paid

Description Amount of tax deducted Amount paid
1 2 3
(a) Integrated Tax
(b) Central Tax
(c) State/UT Tax
6. Interest, late Fee payable and paid
Description Amount payable Amount paid
1 2 3
(I) Interest on account of TDS in respect of
(a) Integrated tax
(b) Central Tax
(c) State/UT Tax
(II) Late fee
(a) Central tax
(b) State / UT tax
7. Refund claimed from electronic cash ledger
Description Tax Interest Penalty Fee Other Debit Entry
Nos.
1 2 3 4 5 6 7
(a) Integrated tax
(b) Central tax
(c) State/UT tax
Bank Account Details (Drop Down)

Agenda for 53rd GSTCM Volume 1
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8. Debit entries in electronic cash ledger for TDS/interest payment [to be
populated after payment of tax and submissions of return]

Description Tax paid in cash Interest Late fee
1 2 3 4
(a) Integrated tax
(b) Central tax
(c) State/UT tax

9. Verification
I hereby solemnly affirm and declare that the information given herein above is true and
correct to the best of my knowledge and belief and nothing has been concealed therefrom.

Signature of Authorised Signatory
Place: Name of Authorised Signatory
Date: Designation /Status
Instructions –
1. Terms used:
a) GSTIN: Goods and Services Tax Identification Number
b) TDS: Tax Deducted at Source
2. Table 3 to capture invoice/ document wise details of tax deducted.
3. Table 4 will contain amendment of information provided in earlier tax periods.
4. Return cannot be filed without full payment of liability.
5. The amount liable for TDS in column 5 of Table 3 and column 6 and column 11
of Table 4, shall be the amount excluding the Central tax, State tax/ Union
territory tax, Integrated tax and cess, indicated in the invoice.


Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(vi): Relaxation in condition of section 16(4) of the CGST Act with respect to
cases where returns have been filed after revocation for initial years of implementation of
GST.
Several representations have been received from the trade and industry, requesting for
relaxation of the timelines stipulated in section 16(4) of CGST Act, 2017 for availment of input
tax credit in respect of:-
a) initial years of GST and years which were adversely affected by COVID 19 i.e. FY 2017-
18, FY 2018-19, FY 2019-20 and FY 2020-21; and
b) cases where the returns for the period from 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.
2. Section 16(4) of CGST Act provides the time limit within which input tax credit in
respect of any invoice or debit note can be availed. The same is reproduced below:
Section 16. Eligibility and conditions for taking input tax credit.
…
(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or
debit note for supply of goods or services or both after the *[ thirtieth day of November ]
following the end of financial year to which such invoice or debit note pertains or furnishing of
the relevant annual return, whichever is earlier.

Provided that the registered person shall be entitled to take input tax credit after the due date of
furnishing of the return under section 39 for the month of September, 2018 till the due date of
furnishing of the return under the said section for the month of March, 2019 in respect of any
invoice or invoice relating to such debit note for supply of goods or services or both made during
the financial year 2017-18, the details of which have been uploaded by the supplier under sub
section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said
section for the month of March, 2019.
* substituted vide Notification No. 18/2022 – CT dated 28.09.2022 w.e.f. 01.10.2022, Prior to its
substitution, it was read as: ''due date of furnishing of the return under section 39 for the month of
September.

3. Accordingly, as per Section 16(4) of CGST Act, the due date to take input tax credit in
respect of an invoice or debit pertaining to different Financial Years, are as tabled below:
Financial Year
Time limit to take ITC
in terms of Section 16(4)
2017-18 25/10/2018
23/04/2019**
2018-19 20/10/2019
2019-20 (20/22/24)/10/2020
2020-21 (20/22/24)/10/2021
2021-22 30/11/2022
2022-23 30/11/2023

Agenda for 53rd GSTCM Volume 1
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**Conditional extension as per proviso to Section 16(4) of CGST Act inserted vide Order No.
02/2018 -Central Tax dated 31st December 2018
3. From a combined reading of Section 16(1), section 49(2), section 41(1), section 39(1) of
the CGST Act 2017 and Rule 86(1) of the CGST Rules 2017, it emerges that a registered taxpayer
is entitled to take self-assessed, eligible input tax credit through a return to be filed and the same
shall be credited to his electronic credit ledger. Such return in the Act has been prescribed to be
the return which is filed under Section 39 of CGST Act i.e. return to be furnished in FORM
GSTR-3B.
A. Relaxation of the conditions stipulated in section 16(4) of CGST Act in respect of
initial years of GST and years which were adversely affected by COVID 19 i.e. FYs 2017-18,
2018-19, 2019-20 and 2020-21
4. It has been represented that during the initial years of GST, the taxpayers were unaware
that delay in filing of return i.e. FORM GSTR-3B beyond the due date under Section 16(4) could
lead to denial of input tax credit, which had been availed in such delayed filed returns. It has
further been represented that several late fee amnesty schemes were notified regarding FORM
GSTR 3B for the initial years, however, as no parallel relaxation of conditions under section
16(4) of CGST Act were extended in respect of returns which were filed in pursuance of such
schemes, all the input tax credit, which was availed in such delayed filed returns, is being denied
and is being demanded as irregularly availed input tax credit, on the grounds that as such input tax
credit has been taken in the returns which have been filed after the due date to avail input tax
credit in terms of section 16(4) of CGST Act, the said input tax credit is not available as per
conditions of section 16(4) of CGST Act. It has been represented that his is causing huge
difficulty to the taxpayers, particularly the smaller taxpayers.
5. It has also been represented that during Covid-19 period, economic activities and
business at large were adversely impacted and it resulted in delay in filing of returns. It has
further been represented that during initial period of implementation of GST also, returns could
not be filed by the taxpayers in time due to lack of knowledge about need of filing for each tax
period, even in the cases where there was no supply, or where the net cash liability to be paid in a
return was nil. Further, the Government had provided conditional waiver/ relaxation in respect of
late fee for delayed filing of GSTR 3B returns for initial years through various amnesty schemes
by notifications; however, no parallel relief was extended in respect of compliance of section
16(4) of CGST Act. Therefore, it has been represented that some form of relaxation of the
timelines stipulated in section 16(4) of CGST Act may be granted to the taxpayers to regularize
the input tax credit which had been availed in such delayed filed returns for the initial years of
GST i.e. for FY 2017-18, 2018-19, 2019-20 and 2020-21.
6. The details of various amnesty schemes, which were brought out for providing relaxation
in late fee for delayed filing of GSTR 3B returns to clean up pendency in return filing in GST
regime, are as follows:
Amnesty Scheme in GST
S.
No
Perio
d
Notifica
tion
Fillin
g
Perio
d
Conditions
i July
2017
Notificat
ion No.
betwe
en
late fee shall stand waived for the
registered persons who failed to furnish
Agenda for 53rd GSTCM Volume 1
Page 199 of 477
to
Septe
mber
2018
76/2018
–
Central
Tax
dated
31.12.20
18
22.12.
2018
to
31.03.
2019
the return in FORM GSTR-3B for the
months of July 2017 to September 2018
by the due date but furnishes the said
return between the period from
22.12.2018 to 31.03.2019
ii July
2017
to
Janua
ry
2020
Notificat
ion No.
52/2020
–
Central
Tax
dated
24.06.20
20
betwe
en
01.07.
2020
to
30.09.
2020
1. If GSTR-3B returns are furnished
during the period between
01.07.2020 to 30.09.2020
2. Late fee capped to a maximum of `
500/- (`. 250/- each for CGST &
SGST) per return having tax liability
3. No Late fee, if Tax payable is NIL
iii July
2017
to
April
2021
Notificat
ion No.
19/2021
–
Central
Tax
dated
01.06.20
21
betwe
en
01.06.
2021
to
31.08.
2021
(a) If GSTR-3B returns are furnished
during the period between
01.06.2021 to 31.08.2021;
(b) Late fee capped to a maximum of
(i) ` 500/- (` 250/- each for CGST &
SGST) per return if Tax payable
is NIL;
(ii) ` 1000/- (` 500/- each for CGST
& SGST) per return for other
taxpayers (having any Tax
Liability).
Notificat
ion No.
33/2021
–
Central
Tax
dated
31.08.20
21
amended
the
Notificat
ion No.
19/2021
Central
Tax date
01.06.20
21
betwe
en
01/06/
2021
to
30/11/
2021
(a) If GSTR-3B returns are furnished
during the period between
01.06.2021 to 30.11.2021;
(b) Late fee capped to a maximum of
(i) ` 500/- (` 250/- each for CGST &
SGST) per return for NIL tax
liability;
(ii) ̀ 1000/- (` 500/- each for CGST
& SGST) per return for other
taxpayers (having Any Tax
Liability).

7. It is observed that in respect of the schemes mentioned at Sr. No. ii and iii in the table
above, the last date mentioned for availing the benefit of such schemes, for the returns pertaining
to financial year 2017-18 to 2020-21 was beyond the due date under Section 16(4) of CGST Act
Agenda for 53rd GSTCM Volume 1
Page 200 of 477
2017 for some financial years. Although the taxpayers, on availing the benefits of these schemes
were able to file their pending returns with relaxation in late fee, however, due to expiry of due
date under Section 16(4) of CGST Act, they were not eligible to take input tax credit in the
returns filed beyond the due date under Section 16(4) of the CGST Act 2017. Besides, these
amnesty schemes failed to provide any specific relief to the taxpayers regarding waiver/extension
of the time limit under Section 16(4) of CGST Act. Accordingly, the intended relief to the
taxpayers for delayed filing of the said returns does not appear to be made fully available to the
said taxpayers if availment of ITC through the said returns is not allowed to them because of the
conditions of section 16(4) of CGST Act, as no waiver from the conditions of section 16(4) of
CGST Act was provided along with the said amnesty schemes.
8. As per the data made available by GSTN in respect of the input tax credit availed in the
FORM GSTR 3Bs pertaining to the FYs 2017-18 to 2020-21, which had been filed beyond the
due date specified in Section 16(4) of the CGST Act 2017, but where such returns have been filed
upto 30.11.2021 (i.e. the last date for filing return as per the last amnesty scheme for late fee
relaxation for delayed filing of the returns), it is seen that about 5 Lakh GSTINs have filed
FORM GSTR 3B returns for the said financial years, beyond the time limit specified in section
16(4) of CGST Act, and accordingly whole of input tax credit availed in such returns is in
contravention to section 16(4) of CGST Act. It is possible that in large number of such cases,
demand notices would have already been issued or would be issued in future, demanding the
entire input tax credit availed through such returns. The same would not only impose a huge
financial burden on the taxpayers but also lead to higher work load on the tax authorities for
adjudication/ appeal of such cases.
9. Therefore, in order to provide relief to taxpayers and to reduce large scale litigation, the
following options were proposed:
• Option 1: 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, may be deemed to be 30.11.2021.

This can be done by inserting a proviso in section 16(4) of CGST Act retrospectively
with effect from 01.07.2017:
Provided further that in respect of an invoice or debit note for supply of goods or services
or both pertaining to financial year 2017-18,2018-19,2019-20 and 2020-21, the
registered person shall be entitled to take input tax credit, till the thirtieth day of
November, 2021

• Option 2: The time limit to avail input tax credit under Section 16(4) of the CGST Act
for the financial years 2017-18, 2018-19, 2019-20 and 2020-21, in any FORM GSTR
3B return of the month upto september following the financial year to which such
invoice or debit note pertains, which is filed upto 30.11.2021, may be extended upto
30.11.2021.

It is to be mentioned that as per the extant provisions of section 16(4) of CGST Act, input
tax credit in respect of an invoice or debit note pertaining to the said financial years could
be taken upto the due date of filing of return under section 39 of CGST Act for the month
of September following the financial year to which such invoice or debit note pertains.
The same implies that input tax credit in respect of an invoice or debit note pertaining to a
financial year can be taken in any return under section 39 of CGST Act, filed for any tax
period upto the month of September following the financial year to which such invoice or
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debit note pertains and filed upto the due date of filing of return for the month of
September of the following financial year.

Accordingly, this option can be implemented by inserting a proviso in section 16(4) of
CGST Act retrospectively with effect from 01.07.2017:
Provided further that in respect of an invoice or debit note for supply of goods or services or
both pertaining to financial year 2017-18, 2018-19, 2019-20 and 2020-21, the registered
person shall be entitled to take input tax credit, in any return under section 39 for a tax
period upto the month of September following the end of the financial year to which such
invoice or debit note pertains, which is filed upto thirtieth day of November, 2021.
• Option 3: The time limit to avail input tax credit under Section 16(4) of the CGST Act
may be extended to the actual date of filing of FORM GSTR 3B or the date specified in
Section 16(4) of the Act, whichever is later, in respect of returns in FORM GSTR 3B
filed within the time period specified in the Late fee Amnesty schemes, as under:

i.GSTR 3Bs pertaining to July 2017 to January 2020, filed between 01.07.2020 to
30.09.2020, in pursuance to Notification No. 52/2020 – Central Tax dated
24.06.2020.

ii.GSTR 3Bs pertaining to July 2017 to March 2021, filed between 01.06.2021 to
30.11.2021, in pursuance to Notification No. 19/2021 – Central Tax dated
01.06.2021 as amended by Notification No. 33/2021 – Central Tax dated
31.08.2021.

This can be done by inserting a proviso in section 16(4) of CGST Act retrospectively
with effect from 01.07.2017:

Provided further that the registered person shall be entitled to take input tax credit in
respect of an invoice or debit note for supply of goods or services or both pertaining to:

a) the period from July 2017 to January 2020, in any return under section 39 for a tax
period upto the month of September following the end of the financial year to which
such invoice or debit note pertains, which is filed in between first day of July,2020 till
thirtieth day of September, 2020;
b) the period from July 2017 to March 2021, in any return under section 39 for a tax
period upto the month of September following the end of the financial year to which
such invoice or debit note pertains, which is filed in between first day of June,2021
till thirtieth day of November, 2021.

In this option, the extension of time limit under section 16(4) for the said financial years
is being provided only in respect of returns filed under the above two late fee amnesty
schemes.

9.1 It was also proposed that a clause may be inserted in the Finance Act, to the effect
that no refund shall be admissible on account of the said retrospective amendment in cases
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where such amount had already been paid or reversed on account of contravention of
section 16(4) of the Act.
10. The Law committee in its meeting held on 18.03.2024, 25.04.2024, 02.05.2024 and
16.05.2024 deliberated on the matter. However, no consensus could be achieved in the Law
Committee on this matter.
B. Relaxation of the conditions stipulated in section 16(4) of CGST Act in respect of
revocation of cancellation of registration
11. It has been represented that relaxation in respect of availment of input tax credit under
section 16(4) of CGST Act is warranted in cases where the returns for the period from 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, but are filed
beyond the due date to avail input tax credit under section 16(4) of CGST Act.
12. It is mentioned that as per section 29 of CGST Act, proper officer may cancel the
registration of a registered person for various reasons listed therein and as per section 30 of CGST
Act read with rule 23 of CGST Rules, the cancellation of registration may be revoked by the
proper officer, subject to certain conditions which have been prescribed. The relevant provisions
are reproduced below:
Section 29. Cancellation or suspension of registration.-

(1) The proper officer may, either on his own motion or on an application filed by the registered
person or by his legal heirs, in case of death of such person, cancel the registration, in such
manner and within such period as may be prescribed, having regard to the circumstances where,-
(a) the business has been discontinued, transferred fully for any reason including death of the
proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person is no longer liable to be registered under section 22 or section 24 or
intends to opt out of the registration voluntarily made under sub-section (3) of section 25:
Provided that during pendency of the proceedings relating to cancellation of registration filed by
the registered person, the registration may be suspended for such period and in such manner as
may be prescribed.

(2) The proper officer may cancel the registration of a person from such date, including any
retrospective date, as he may deem fit, where,-

(a) a registered person has contravened such provisions of the Act or the rules made thereunder
as may be prescribed; or
(b) a person paying tax under section 10 has not furnished the return for a financial year beyond
three months from the due date of furnishing the said return; or
(c) any registered person, other than a person specified in clause (b), has not furnished returns
for a 16[such continuous tax period as may be prescribed; or
(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not
commenced business within six months from the date of registration; or
(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the person an
opportunity of being heard:
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Provided further that during pendency of the proceedings relating to cancellation of registration,
the proper officer may suspend the registration for such period and in such manner as may be
prescribed.

(3) the cancellation of registration under this section shall not affect the liability of the person to
pay tax and other dues under this Act or to discharge any obligation under this Act or the rules
made thereunder for any period prior to the date of cancellation whether or not such tax and
other dues are determined before or after the date of cancellation.

(4) The cancellation of registration under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of
registration under this Act.

(5) Every registered person whose registration is cancelled shall pay an amount, by way of debit
in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in
respect of inputs held in stock and inputs contained in semi-finished or finished goods held in
stock or capital goods or plant and machinery on the day immediately preceding the date of such
cancellation or the output tax payable on such goods, whichever is higher, calculated in such
manner as may be prescribed:

Provided that in case of capital goods or plant and machinery, the taxable person shall pay an
amount equal to the input tax credit taken on the said capital goods or plant and machinery,
reduced by such percentage points as may be prescribed or the tax on the transaction value of
such capital goods or plant and machinery under section 15, whichever is higher.
(6) The amount payable under sub-section (5) shall be calculated in such manner as may be
prescribed.

Section 30. Revocation of cancellation of registration. –

(1) Subject to such conditions as may be prescribed, any registered person, whose registration is
cancelled by the proper officer on his own motion, may apply to such officer for revocation of
cancellation of the registration in such manner, within such time and subject to such conditions
and restrictions, as may be prescribed

(2) The proper officer may, in such manner and within such period as may be prescribed, by
order, either revoke cancellation of the registration or reject the application:

Provided that the application for revocation of cancellation of registration shall not be rejected
unless the applicant has been given an opportunity of being heard.

(3) The revocation of cancellation of registration under the State Goods and Services Tax Act or
the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a
revocation of cancellation of registration under this Act.

Rule 23. Revocation of cancellation of registration. –

(1) A registered person, whose registration is cancelled by the proper officer on his own
motion, may subject to the provisions of rule 10B submit an application for revocation of
cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of
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ninety days from the date of the service of the order of cancellation of registration] at the
common portal, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that such period may, on sufficient cause being shown, and for reasons to be recorded
in writing, be extended by the Commissioner or an officer authorised by him in this behalf, not
below the rank of Additional Commissioner or Joint Commissioner, as the case may be, for a
further period not exceeding one hundred and eighty days:

Provided further that no application for revocation shall be filed, if the registration has been
cancelled for the failure of the registered person to furnish returns, unless such returns are
furnished and any amount due as tax, in terms of such returns, has been paid along with any
amount payable towards interest, penalty and late fee in respect of the said returns:

Provided also that all returns due for the period from the date of the order of cancellation of
registration till the date of the order of revocation of cancellation of registration shall be
furnished by the said person within a period of thirty days from the date of order of revocation
of cancellation of registration:

Provided also that where the registration has been cancelled with retrospective effect, the
registered person shall furnish all returns relating to period from the effective date of
cancellation of registration till the date of order of revocation of cancellation of registration
within a period of thirty days from the date of order of revocation of cancellation of
registration.

(2) (a) Where the proper officer is satisfied, for reasons to be recorded in writing, that there are
sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation
of registration by an order in FORM GST REG-22 within a period of thirty days from the date of
the receipt of the application and communicate the same to the applicant.

(b) The proper officer may, for reasons to be recorded in writing, under circumstances other than
those specified in clause (a), by an order in FORM GST REG-05, reject the application for
revocation of cancellation of registration and communicate the same to the applicant.

(3) The proper officer shall, before passing the order referred to in clause (b) of sub-rule (2),
issue a notice in FORM GST REG-23 requiring the applicant to show cause as to why the
application submitted for revocation under sub-rule (1) should not be rejected and the applicant
shall furnish the reply within a period of seven working days from the date of the service of the
notice in FORM GST REG-24 .

(4) Upon receipt of the information or clarification in FORM GST REG-24, the proper officer
shall proceed to dispose of the application in the manner specified in sub-rule (2) within a period
of thirty days from the date of the receipt of such information or clarification from the applicant.

13. On a combined reading of section 30 of CGST Act with third and fourth proviso to rule
23(1) of CGST Rules, it can be seen that a taxpayer, whose registration is restored by the proper
officer, can file the returns due for the period from the date of order of cancellation of registration
or effective date of cancellation of registration (in case the registration was cancelled
retrospectively) till the date of order of revocation of cancellation of registration, only after the
application for revocation of cancellation of registration is approved by the tax authorities.
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Further, such returns are required to be filed within thirty days of the date of order of revocation
of cancellation of registration.

14. On juxtaposition of the above-mentioned provisions alongside the provisions of section
16(4) of CGST Act, it is observed that even when the returns due for the period from the date of
order of cancellation of registration or effective date of cancellation of registration (in case the
registration was cancelled retrospectively) till the date of order of revocation of cancellation of
registration are filed within 30 days of date of order of revocation of cancellation of registration,
in case the time period specified in the section 16(4) of the CGST Act has already been over at
the time when the said returns are filed, the input tax credit availed through such returns becomes
ineligible under Section 16(4) of the CGST Act 2017.

15. In light of the above, Law committee felt that there is a need to allow for relaxation of
conditions under Section 16(4) of the Act, in cases where the returns for the period from 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.

16. Further, it was also seen that as per third and fourth proviso to rule 23(1) of the
CGST Rules, returns pertaining to the period from date of cancellation of registration
/effective date of cancellation of registration till the date of revocation of cancellation of
registration are required to be filed within 30 days of revocation. Law committee felt that
there may be a need to provide specific provision in CGST Act to provide for prescribing
conditions and restrictions for revocation of cancellation of registration by inserting a proviso in
section 30(2) of CGST Act.

17. It was also observed that as per clause (a) of section 29(2) of CGST Act, the proper
officer may cancel the registration of a person in cases where he has contravened such provisions
of the Act or the rules made thereunder as may be prescribed. Such provisions of the Act or the
rules, the contravention of which may invoke cancellation of registration under clause (a) of
section 29(2) of CGST Act are prescribed in rule 21 of CGST Rules. Law committee felt that
there may be need to insert a specific clause in rule 21 of CGST Rules in respect of contravention
of provisions of third and fourth proviso to rule 23(1) of CGST Rules i.e. if the taxpayer fails to
file returns pertaining to the period from date of cancellation of registration/ effective date of
cancellation of registration till the date of revocation of cancellation of registration, within 30
days of revocation of cancellation of registration.

18. The Law Committee accordingly in its meeting held on 16.05.2024 recommended that:-
i. following proviso may be inserted in the section 16(4) of CGST Act
retrospectively w.e.f. 1st July 2017:

“Provided further that where any registration is cancelled under section 29 and
subsequently the cancellation of registration is revoked by any order, either
under section 30, or in pursuance to any order made by Appellate Authority or
Appellate Tribunal or court, such registered person shall be entitled to take the
input tax credit in respect of any invoice or debit note for supply of goods or
services or both in a return for the period between the effective date of
cancellation of registration and the date of revocation of cancellation of
registration, filed within thirty days from the revocation of cancellation of
registration, subject to the condition that input tax credit in respect of such
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invoice or debit note was not restricted as per provisions of sub-section (4), or
the first proviso thereof, on the date of order of cancellation of registration.”

ii. a clause may be inserted in the Finance Act, to the effect that no refund shall
be admissible on account of the said retrospective amendment in cases where
such amount had already been paid or reversed on account of contravention
of section 16(4) of the Act.

iii. a second proviso, as below, may be inserted in section 30(2) of the CGST Act, to
provide for enabling clause to prescribe conditions and restrictions for revocation
of cancellation of registration:

“Provided further that such revocation of cancellation of registration shall be
subject to such conditions and restrictions, as may be prescribed.”
iv. a clause may be inserted in Rule 21 as below:

“(ga) violates the provisions of third or fourth proviso to sub-rule (1) of Rule
23.”
19. Accordingly, the agenda is placed before GST Council for deliberation of the proposal in
Para 9 and 9.1 above and approval of the recommendations of the Law Committee detailed in
Para 18 above.

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Agenda Item 3(vii): Insertion of Section 128A in CGST Act, to provide for
conditional waiver of interest or penalty or both relating to demands raised
under Section 73, for FY 2017-18 to FY 2019-20.

1. Background:
1.1 Various representations have been received from trade and industry
requesting to provide relief with respect to the demands raised for tax periods
during the initial years of implementation of GST. It has been represented that
the initial years of implementation were marked by significant changes, frequent
amendments, and evolving compliance mechanisms, and during such initial
period, taxpayers were not adept with the new laws and procedures.
1.2 It has also been represented that during the initial years, audits and
assessments could not be done due to various factors, including the pandemic,
and could be done later on, due to which the demands are getting finalised only
recently. A large number of demand notices and orders have been issued.
Therefore, it has been requested that a relief or waiver of interest and penalty
may be provided, considering the above factors, for the initial years of
implementation of GST.

2. Relevant provisions:
2.1 Section 73 of CGST Act, 2017:
Section 73. Determination of tax not paid or short paid or erroneously refunded
or input tax credit wrongly availed or utilised for any reason other than fraud or
any willful-misstatement or suppression of facts.-
(1) Where it appears to the proper officer that any tax has not been paid or short
paid or erroneously refunded, or where input tax credit has been wrongly availed
or utilised for any reason, other than the reason of fraud or any wilful-
misstatement or suppression of facts to evade tax, he shall serve notice on the
person chargeable with tax which has not been so paid or which has been so
short paid or to whom the refund has erroneously been made, or who has
wrongly availed or utilised input tax credit, requiring him to show cause as to
why he should not pay the amount specified in the notice along with interest
payable thereon under section 50 and a penalty leviable under the provisions of
this Act or the rules made thereunder.
…
(9) The proper officer shall, after considering the representation, if any, made by
person chargeable with tax, determine the amount of tax, interest and a penalty
equivalent to ten per cent. of tax or ten thousand rupees, whichever is higher, due
from such person and issue an order.

2.2 Section 50 of CGST Act, 2017:
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Section 50. Interest on delayed payment of tax.-
(1) Every person who is liable to pay tax in accordance with the provisions of
this Act or the rules made thereunder, but fails to pay the tax or any part thereof
to the Government within the period prescribed, shall for the period for which
the tax or any part thereof remains unpaid, pay, on his own, interest at such rate,
not exceeding eighteen per cent., as may be notified by the Government on the
recommendations of the Council:
….
(2) The interest under sub-section (1) shall be calculated, in such manner as may
be prescribed, from the day succeeding the day on which such tax was due to be
paid.
(3) Where the input tax credit has been wrongly availed and utilised, the
registered person shall pay interest on such input tax credit wrongly availed and
utilised, at such rate not exceeding twenty-four per cent. as may be notified by
the Government, on the recommendations of the Council, and the interest shall
be calculated, in such manner as may be prescribed.

3. Analysis:
3.1 Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to as the ‘CGST Act’), provides for determination of tax not paid or
short paid or erroneously refunded or input tax credit wrongly availed or utilised
for reasons other than fraud or any wilful-misstatement or suppression of facts,
whereas Section 74 provides for determination of tax in cases involving fraud or
any wilful-misstatement or suppression of facts.
3.2 It is to be noted that under Section 73 of the CGST Act, penalty payable is
ten per cent of the tax demanded, and as per Section 50 of the CGST Act, interest
at the rate of eighteen per cent per annum becomes payable from the due date of
payment of said tax demanded. While such interest and penalty serve the purpose
of ensuring tax compliance, their application during the initial implementation
phase has been seen as burdensome, by the taxpayers, especially when the
system was still evolving. Small and medium-sized enterprises (SMEs) have
represented that they made genuine errors during the initial period due to the
complexity of GST and ignorance of law/ procedures.
3.3 The last date for issuing demand notices for the FY 2019-20 under Section
73 of the CGST Act was 31.05.2024. A large number of demand notices and
demand orders pertaining to the FYs 2017-18, 2018-19 and 2019-20 have been
issued/ are in process of being issued. In a large number of such cases, appeals
may be filed, thereby increasing the burden of the appellate authorities. It is
important to note that once GST Appellate Tribunal becomes operational, many
of these appeals will go to the Tribunal as well. Tax officers have also expressed
that the chances of recovery diminish with the passage of time as number of
taxpayers shut down their shops and become untraceable due to various reasons
like change in market behaviour, technological changes, migration and death. In
very likelihood, large number of appeals as envisaged above will take its own
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time to get disposed-of leaving the tax administration with considerable volume
of possible non-recoverable demand.
3.4 The issue was deliberated in detail by the Law Committee in its meetings
dated 09.02.2024 and 02.05.2024. Considering the challenges faced by taxpayers
during the early GST years, relief from interest and penalties is essential to
encourage compliance and support businesses to move forward. Therefore, Law
Committee recommended providing a waiver of interest and penalty to all type of
demand notices issued under Section 73 of the CGST Act, 2017, for FY 2017-18,
FY 2018-19 and FY 2019-20, subject to the condition that the said taxpayer pays
the full amount of tax demanded upto a date as may be notified on the
recommendations of the Council Law Committee felt that such waiver may not
be extended in respect of cases involving charges of fraud or wilful misstatement
or suppression of facts to evade tax, where demand notices have been issued
under section 74 of CGST Act.
3.5 Law Committee also recommended that in cases, where demand notice has
been issued under section 74 of CGST Act, but during the appellate or court
proceedings, it is concluded that charges of fraud or wilful misstatement or
suppression of facts to evade tax are not established against the noticee, and the
tax is required to be determined by proper officer under section 73 of CGST Act
as per section 75(2) of CGST Act, the benefit of such waiver of interest and
penalty may be made available in such cases, as well.
3.6 Further, it was recommended that such waiver may not be extended to cases
involving erroneous refund. Law Committee further recommended that in cases
where interest and penalty have already been paid in respect of any demand/
proceedings for the said financial years, no refund shall be admissible for the
same.
3.7 To implement the said recommendations for waiver of interest and penalty,
the Law Committee in its meeting dated 07.06.2024, recommended the insertion
of a new section, Section 128A in the CGST Act as below:

Section 128A of CGST Act, 2017:
128A. One-time waiver of interest or penalty or both relating to
demands raised under Section 73, for certain tax periods.
(1) Notwithstanding anything to the contrary contained in this Act, where any
amount of tax is payable by a person chargeable with tax as per,
a) a notice issued under sub-section (1) of section 73 or a statement issued under
sub-section (3) of section 73, where no order under sub-section (9) of section 73
has been issued; or
b) an order issued under sub-section (9) of section 73, where no order under sub-
section (11) of section 107 or sub-section (1) of section 108 has been issued; or
c) an order issued under sub-section (11) of section 107 or sub-section (1) of section
108, where no order under sub-section (1) of section 113 has been issued;
pertaining to the period from 1st July, 2017 to 31st March, 2020, or a part thereof,
and the said person pays the full amount of tax payable as per the notice or
statement or the order referred in clause (a), clause (b) or clause (c), as the case
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may be, on or before the date, as may be notified by the Government, on the
recommendations of the Council, no interest under Section 50 and penalty under
this Act, shall be payable and all the proceedings in respect of the said notice or
order or statement, as the case may be, shall be deemed to be concluded, subject
to such conditions as may be prescribed:
Provided that where a notice has been issued under sub-section (1) of section 74,
and an order is issued or required to be issued by the proper officer in pursuance
of the direction of the Appellate Authority or Appellate Tribunal or a court as per
provisions of sub-section (2) of section 75, the said notice or order shall be
considered to be a notice or order, as the case may be, referred to in clause (a) or
clause (b) of this sub-section:
Provided further that the conclusion of the proceedings under this sub-section, in
cases where an application is filed under sub-section (3) of section 107 or under
sub-section (3) of section 112 or an appeal is filed by an officer of central tax
under sub-section (1) of section 117 or under sub-section (1) of section 118 or
where any proceedings are initiated under sub-section (1) of section 108, against
an order referred to in clause (b) or clause (c) or against the directions of the
Appellate Authority or the Appellate Tribunal or the court referred in the first
proviso, shall be subject to the condition that the said person pays the additional
amount of tax payable, if any, as per the order of the Appellate Authority or the
Appellate Tribunal or the court or the Revisional Authority, as the case may be,
within three months from the date of the said order:
Provided also that where such interest and penalty has already been paid, no
refund of the same shall be available.
(2) Nothing contained in sub-section (1) shall be applicable in respect of any
amount payable by the person on account of erroneous refund.
(3) Nothing contained in sub-section (1) shall be applicable in respect of cases
where an appeal or writ petition filed by the said person is pending before
Appellate Authority or Appellate Tribunal or a court, as the case may be, and has
not been withdrawn by the said person on or before the date notified under sub-
section (1) .
(4) Notwithstanding anything contained in this Act, where any amount
specified under sub-section (1) has been paid and the proceedings are deemed to
be concluded under the said sub-section, no appeal under sub-section (1) of
section 107 or sub-section (1) of section 112 shall lie against an order referred in
clause (b) or clause (c) of sub-section (1), as the case may be.

4. Accordingly, the agenda s placed before the GST Council for approval.

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Agenda Item 3(viii) : Reduction of Government Litigation – fixing
monetary limits for filing appeals or applications by the Department
before GSTAT, High Courts and Supreme Court.
Reference is invited to Section 120 of the Central Goods and Services
Tax Act, 2017 (hereinafter referred as “the CGST Act”) which provides for
fixing monetary limit to regulate the filing of appeal by the tax authorities and
is reproduced here under:
120. Appeal not to be filed in certain cases. —
(1) The Board may, on the recommendations of the Council, from time to
time, issue orders or instructions or directions fixing such monetary limits, as
it may deem fit, for the purposes of regulating the filing of appeal or
application by the officer of the central tax under the provisions of this
Chapter.
(2) Where, in pursuance of the orders or instructions or directions issued
under sub-section (1), the officer of the central tax has not filed an appeal or
application against any decision or order passed under the provisions of this
Act, it shall not preclude such officer of the central tax from filing appeal or
application in any other case involving the same or similar issues or
questions of law.
(3) Notwithstanding the fact that no appeal or application has been filed by
the officer of the central tax pursuant to the orders or instructions or
directions issued under sub-section (1), no person, being a party in appeal or
application shall contend that the officer of the central tax has acquiesced in
the decision on the disputed issue by not filing an appeal or application.
(4) The Appellate Tribunal or court hearing such appeal or application shall
have regard to the circumstances under which appeal or application was not
filed by the officer of the central tax in pursuance of the orders or instructions
or directions issued under sub-section (1).
2. Government of India has formulated a National Litigation Policy
with an aim to reduce Government litigation so that the Government ceases to
be a compulsive litigant. The purpose underlying this Policy is to ensure that
valuable time of the Courts is spent in resolving pending cases of significant
nature and in bringing down the average pendency time in the Courts.
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2.1 It is pertinent to mention that in order to reduce Government
litigation, necessary guidelines in the legacy matters relating to Central Excise
and Service Tax had been issued by the Central Board of Indirect Taxes and
Customs (CBIC) for fixing the monetary limits below which appeal shall not
be filed by the Department in the Customs, Excise and Service Tax Appellate
Tribunal (CESTAT), High Court and Supreme Court vide instruction F.No.
390/Misc./163/2010-JC dated 20.10.2010 and these monetary limits were
further raised vide instruction F.No. 390/Misc./163/2010-JC dated
17.08.2011, instruction F. No. 390/Misc./116/2017-JC dated 22.08.2019 and
instruction F. No. 390/Misc./30/2023-JC dated 02.11.2023. Similarly,
instructions in the matters relating to Customs had been issued fixing
monetary limits vide instruction F.No.390/Misc./163/2010-JC dated
17.08.2011 and the same were revised vide instruction
F.No.390/Misc./163/2010-JC dated 17.12.2015 and F. No.
390/Misc./30/2023-JC dated 02.11.2023. The said monetary limits as per the
latest instruction are as follows:
Appellate
Forum
Monetary limit (Tax
Amount involved)
Central
Excise/Service
Tax/Customs
CESTAT Rs. 50 lakhs
High
Court
Rs. 1 Crore
Supreme
Court
Rs. 2 Crore

2.2. Further, CBDT has also prescribed monetary limits for filing
appeals by the Department before Income Tax Appellate Tribunal, High
Court & Supreme Court. The said monetary limits have recently been revised
vide Circular No. 5/2024 dated 15th March 2024, as below:



Agenda for 53rd GSTCM Volume 1
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Appellate
Forum
Monetary
limit
(Tax
effect)
Income Tax
Appellate
Tribunal
Rs. 50
lakhs
High Court Rs.1
Crore
Supreme Court Rs. 2
Crore

3. No such monetary limits for filing appeals by the tax authorities
have yet been specified in GST. As the time limit for issuing orders under
section 73 of CGST Act for financial year 2017-18, 2018-19 & 2019-20 have
recently expired/ going to expire shortly, there may be large number of
adjudication orders against which appeal may be filed before the appellate
authority. Besides, Appellate authorities have already passed orders/ may be
passing orders in future in these cases, out of which department may be
required to file appeal against such appellate orders. In order to ensure that
appeals are filed by the Government in GST Appellate Tribunal (GSTAT),
High Court and Supreme Court only in cases involving significant revenue/
important policy matters, it would be prudent to prescribe monetary limits for
filing appeals by the department in GSTAT, High Court and Supreme Court.
While fixing such monetary limits in GST, it would be desirable to make a
comparison with those set under Central Excise, Service Tax, Customs and
Income Tax Act.
4. Besides, while fixing any threshold monetary limit for filing appeals
in GSTAT, High Court and Supreme Court, it may also be desirable to
specify certain exclusions in respect of which the said monetary limits may
not apply. Such exclusions may be in respect of categories such as, cases
where any provision of Act/ Rules has been set aside/ held to be ultra vires the
Constitution, where any circular/ notification/ order/ instruction issued by the
Government/ Department has been set aside, cases involving classification
and valuation etc.
5. The matter was deliberated by the Law Committee in its meeting
held on 25.04.2024. The Law Committee recommended the following
monetary limits for filing appeal by the Department:
Agenda for 53rd GSTCM Volume 1
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Appellate
Forum
Monetary
Limit (Rs.)
GSTAT 20,00,000/-
High
Court
1,00,00,000/-
Supreme
Court
2,00,00,000/-

5.1 Law Committee also recommended that the following principles may be
considered to determine as to whether a case falls within the above monetary
limits or not:
i. Where the dispute pertains to demand of tax (with or without penalty and/ or
interest), the aggregate of the amount of tax in dispute (including CGST,
SGST/ UTGST, IGST and Compensation Cess) only should be considered
while applying the monetary limit for filing appeal.
ii. Where the dispute pertains to demand of interest only, the amount of interest
should be considered for applying the monetary limit for filing appeal.
iii. Where the dispute pertains to imposition of penalty only, the amount of
penalty should be considered for applying the monetary limit for filing appeal.
iv. Where the dispute pertains to imposition of late fee only, the amount of late
fee should be considered for applying the monetary limit for filing appeal.
v. Where the dispute pertains to demand of interest, penalty and/ or late fee
(without involving any disputed tax amount), the aggregate of amount of
interest, penalty and late fee should be considered for applying the monetary
limit for filing appeal.
vi. Where the dispute pertains to erroneous refund, the amount of refund in
dispute (including CGST, SGST/ UTGST, IGST and Compensation Cess)
should be considered for deciding whether appeal needs to be filed or not.
vii. Monetary limit shall be applied on the disputed amount of tax/ interest/
penalty/ late fee, as the case may be, in respect of which appeal or application
is contemplated to be filed in a case.
viii. In a composite order which disposes more than one appeal/ demand notice,
the monetary limits shall be applicable on the total amount of tax/ interest/
penalty/ late fee, as the case may be, and not on the amount involved in
individual appeal or demand notice.

Agenda for 53rd GSTCM Volume 1
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6. Law Committee further recommended that the monetary limits
mentioned in above para with regard to filing appeals by department before
GSTAT or High Court and for filing Special Leave Petition or appeal before
the Supreme Court should not be applicable in the following circumstances,
and in such cases, the decision to file appeal should be taken on merits
irrespective of the said monetary limits:
i. Where any provision of the CGST Act or SGST/ UTGST Act or IGST Act or
GST (Compensation to States) Act has been held to be ultra vires to the
Constitution of India; or
ii. Where any Rules or regulations made under CGST Act or SGST/ UTGST Act
or IGST Act or GST (Compensation to States) Act have been held to be ultra
vires the parent Act; or
iii. Where any order, notification, instruction, or circular issued by the
Government or the Board has been held to be ultra vires of the CGST Act or
SGST/ UTGST Act or IGST Act or GST (Compensation to States) Act or the
Rules made thereunder; or
iv. Where the matter is related to -
a. Valuation of goods or services; or
b. Classification of goods or services; or
c. Refunds; or
d. Place of supply; or
e. Any other issue,
which is recurring in nature and/ or involves interpretation of the provisions
of the Act / the Rules/ notification/ circular/ order/ instruction etc; or
v. Where strictures/ adverse comments have been passed and/ or cost has been
imposed against the Government/Department or their officers.
vi. Any other case or class of cases, where in the opinion of the Board, it is
necessary to contest in the interest of justice or revenue.
7. Law Committee also observed that sub-sections (2), (3) & (4) of
section 120 of the CGST Act 2017 provide that in cases where it is decided
not to file appeal in pursuance of these instructions, such cases shall not have
any precedent value. Accordingly, law Committee recommended that in such
cases, the Reviewing Authorities should specifically record that “even though
the decision is not acceptable, appeal is not being filed as the amount
involved is less than the monetary limit fixed by the Board.” Also, non-filing
of appeal based on these monetary limits should not preclude the tax officer
from filing appeal or application in any other case involving the same or
Agenda for 53rd GSTCM Volume 1
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similar issues in which the tax in dispute exceeds the monetary limit or case
involving the questions of law.
7.2 Law Committee also observed that in such cases where appeal is
not filed solely on the basis of monetary limits fixed by the Board, there will
be no presumption that the Department has acquiesced in the decision on the
disputed issues in the case of same taxpayers or in case of any other
taxpayers. Accordingly, in case any prior order is being cited or relied upon
by the taxpayer, claiming that the same has been accepted by the Department,
it must be checked as to whether such order was accepted only on account of
the monetary limit before following them in the name of judicial discipline.
Also, in respect of such cases where no appeal is filed based on the monetary
limit, the Departmental representatives/counsels must make every effort to
bring to the notice of the GSTAT or the Court, as the case may be, that the
appeal in such cases was not filed only for the reason of the amount of the tax
in dispute being less than the specified monetary limit and, therefore, no
inference should be drawn that the decisions rendered therein were acceptable
to the Department. Accordingly, they should draw the attention of the GSTAT
or the Court towards the provisions of sub-section (4) of section 120 of the
CGST Act, 2017 which reads as under:
“(4) The Appellate Tribunal or court hearing such appeal or application shall
have regard to the circumstances under which appeal or application was not
filed by the officer of the central tax in pursuance of the orders or instructions
or directions issued under sub-section (1).”
8. Law Committee recommended that a circular may be issued under
the power given by sub-section (1) of section 120 of CGST Act read with
section 168 of the CGST Act to fix the monetary limit for filing appeal or
applications before the GSTAT or High Court or Supreme Court as per
discussions above. Draft Circular as recommended by the Law Committee is
enclosed as Annexure-A.
9. Law Committee also recommended that it will be desirable to keep
a centralised database on the portal regarding all such cases which have been
accepted and no appeal has been filed against them in GSTAT or High Court
or Supreme Court, purely on the basis of monetary limit fixed as per the
recommendations of the Council so that the same is accessible to all
departmental officers and taxpayers to find out that these cases have been
accepted only on monetary ground and shall not have precedence value as per
Agenda for 53rd GSTCM Volume 1
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sub-section (3) & (4) of section 120 of CGST Act, 2017. For this purpose,
GSTN may be requested to develop a functionality on the portal to enable tax
authorities to enter the details of such cases accepted on monetary grounds
and to make available the details of such cases to the departmental officers as
well as taxpayers.
10. Therefore, Agenda along with draft circular is placed before the
GST Council for approval.

Agenda for 53rd GSTCM Volume 1
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Annexure-A
Circular No. xx/2024-GST

F. No. CBIC-200xx/xx/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, dated the xxst March 2024
To,
All the Principal Chief Commissioners / Chief Commissioners /
Principal Commissioners /Commissioners of Central Tax
All the Principal Directors General/ Directors General of Central Tax

Madam/Sir,
Subject: Reduction of Government Litigation – fixing monetary limits for
filing appeals or applications by the Department before GSTAT, High
Courts and Supreme Court -reg.
Reference is invited to the National Litigation Policy which was
conceived with the aim of optimizing the utilization of judicial resources and
expediting the resolution of pending cases. It underscores the importance of
prudent litigation practices by establishing thresholds for filing appeals in
Revenue matters. Specifically, the Policy mandates that appeals should not be
pursued when the amount involved is below a specified monetary limit set by
Revenue authorities. Furthermore, it discourages filing appeals in cases where
established precedents from Tribunals and High Courts have settled the matter
and have not been contested in the Supreme Court.
1.1 Section 120 of the Central Goods and Services Tax Act, 2017
(hereinafter referred as “the CGST Act”) provides for power to the the Central
Board of Indirect Taxes & Customs (hereinafter referred to as “the Board”)
for fixing the monetary limits for filing of appeal or application by the tax
authorities as below:
“120. Appeal not to be filed in certain cases. —
(1) The Board may, on the recommendations of the Council, from time to
time, issue orders or instructions or directions fixing such monetary limits, as
Agenda for 53rd GSTCM Volume 1
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it may deem fit, for the purposes of regulating the filing of appeal or
application by the officer of the central tax under the provisions of this
Chapter.
(2) Where, in pursuance of the orders or instructions or directions issued
under sub-section (1), the officer of the central tax has not filed an appeal or
application against any decision or order passed under the provisions of this
Act, it shall not preclude such officer of the central tax from filing appeal or
application in any other case involving the same or similar issues or
questions of law.
(3) Notwithstanding the fact that no appeal or application has been filed by
the officer of the central tax pursuant to the orders or instructions or
directions issued under sub-section (1), no person, being a party in appeal or
application shall contend that the officer of the central tax has acquiesced in
the decision on the disputed issue by not filing an appeal or application.
(4) The Appellate Tribunal or court hearing such appeal or application shall
have regard to the circumstances under which appeal or application was not
filed by the officer of the central tax in pursuance of the orders or instructions
or directions issued under sub-section (1).”
2. Accordingly, in exercise of the powers conferred by Section 120 of
the CGST Act read with section 168 of the CGST Act, the Board, on the
recommendations of the GST Council, fixes the following monetary limits
below which appeal or application or Special Leave Petition, as the case may
be, shall not be filed by the Central Tax officers before Goods and Service
Tax Appellate Tribunal (GSTAT), High Court and Supreme Court under the
provisions of CGST Act, subject to the exclusions mentioned in para 4 below:
Appellate
Forum
Monetary
Limit
(amount
involved in
Rs.)
GSTAT 20,00,000/-
High
Court
1,00,00,000/-
Supreme
Court
2,00,00,000/-

Agenda for 53rd GSTCM Volume 1
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3. While determining whether a case falls within the above monetary limits or
not, the following principles are to be considered:
i. Where the dispute pertains to demand of tax (with or without penalty and
interest), the aggregate of the amount of tax in dispute (including CGST,
SGST/UTGST, IGST and Compensation Cess) only shall be considered while
applying the monetary limit for filing appeal.
ii. Where the dispute pertains to demand of interest only, the amount of interest
shall be considered for applying the monetary limit for filing appeal.
iii. Where the dispute pertains to imposition of penalty only, the amount of
penalty shall be considered for applying the monetary limit for filing appeal.
iv. Where the dispute pertains to imposition of late fee only, the amount of late
fee shall be considered for applying the monetary limit for filing appeal.
v. Where the dispute pertains to demand of interest, penalty and/ or late fee
(without involving any disputed tax amount), the aggregate of amount of
interest, penalty and late fee shall be considered for applying the monetary
limit for filing appeal.
vi. Where the dispute pertains to erroneous refund, the amount of refund in
dispute (including CGST, SGST/UTGST, IGST and Compensation Cess)
shall be considered for deciding whether appeal needs to be filed or not.
vii. Monetary limit shall be applied on the disputed amount of tax/ interest/
penalty/ late fee, as the case may be, in respect of which appeal or application
is contemplated to be filed in a case.
viii. In a composite order which disposes more than one appeal/ demand notice,
the monetary limits shall be applicable on the total amount of tax/ interest/
penalty/ late fee, as the case may be, and not on the amount involved in
individual appeal or demand notice.

4. EXCLUSIONS
Monetary limits specified above for filing appeal or application by the
department before GSTAT or High Court and for filing Special Leave
Petition or appeal before the Supreme Court shall be applicable in all cases,
except in the following circumstances where the decision to file appeal shall
be taken on merits irrespective of the said monetary limits:
i. Where any provision of the CGST Act or SGST/UTGST Act or IGST Act or
GST (Compensation to States) Act has been held to be ultra vires to the
Constitution of India; or
Agenda for 53rd GSTCM Volume 1
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ii. Where any Rules or regulations made under CGST Act or SGST/UTGST Act
or IGST Act or GST (Compensation to States) Act have been held to be ultra
vires the parent Act; or
iii. Where any order, notification, instruction, or circular issued by the
Government or the Board has been held to be ultra vires of the CGST Act or
SGST/UTGST Act or IGST Act or GST (Compensation to States) Act or the
Rules made thereunder; or
iv. Where the matter is related to -
a. Valuation of goods or services; or
b. Classification of goods or services; or
c. Refunds; or
d. Place of Supply; or
e. Any other issue,
which is recurring in nature and/ or involves interpretation of the provisions
of the Act / the Rules/ notification/ circular/ order/ instruction etc; or
v. Where strictures/ adverse comments have been passed and/ or cost has been
imposed against the Government/Department or their officers; or
vi. Any other case or class of cases, where in the opinion of the Board, it is
necessary to contest in the interest of justice or revenue.
5. It is pertinent to mention that an appeal should not be filed merely because
the disputed tax amount involved in a case exceeds the monetary limits fixed
above. Filing of appeal in such cases is to be decided on merits of the case. The
officers concerned shall keep in mind the overall objective of reducing
unnecessary litigation and providing certainty to taxpayers on their tax
assessment while taking a decision regarding filing an appeal.
6. Attention is drawn to sub-sections (2), (3) & (4) of section 120 of the
CGST Act, which provide that in cases where it is decided not to file appeal in
pursuance of these instructions, such cases shall not have any precedent value. In
such cases, the Reviewing Authorities shall specifically record that “even though
the decision is not acceptable, appeal is not being filed as the amount involved is
less than the monetary limit fixed by the Board.”
6.1 Non-filing of appeal based on the above monetary limits, shall not
preclude the tax officer from filing appeal or application in any other case
involving the same or similar issues in which the tax in dispute exceeds the
monetary limit or case involving the questions of law.
Agenda for 53rd GSTCM Volume 1
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6.2 Further, it is re-iterated that in such cases where appeal is not filed solely
on the basis of the above monetary limits, there will be no presumption that the
Department has acquiesced in the decision on the disputed issues in the case of
same taxpayers or in case of any other taxpayers. Accordingly, in case any prior
order is being cited or relied upon by the taxpayer, claiming that the same has
been accepted by the Department, it must be checked as to whether such order
was accepted only on account of the monetary limit before following them in the
name of judicial discipline.
6.3 Also, in respect of such cases where no appeal is filed based on the
monetary limit, the Departmental representatives/counsels must make every
effort to bring to the notice of the GSTAT or the Court, as the case may be, that
the appeal in such cases was not filed only for the reason of the amount of the tax
in dispute being less than the specified monetary limit and, therefore, no
inference shall be drawn that the decisions rendered therein were acceptable to
the Department. Accordingly, they should draw the attention of the GSTAT or
the Court towards the provisions of sub-section (4) of section 120 of the CGST
Act, 2017 as reproduced in para 1.1 above.
7. The above may be brought to the notice of all concerned.
8. Difficulties, if any, in implementation of this circular may be informed to the
Board (gst-cbec@gov.in).
9. Hindi version will follow.
Principal Commissioner (GST)


Agenda for 53rd GSTCM Volume 1
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Agenda Item 3 (ix): Insertion of new forms FORM GSTR-1A for the
amendment and declaring additional details to FORM GSTR-01, for enabling
locking of FORM GSTR-3B based on FORM GSTR-01.

A proposal has been received from GSTN for the introduction of a new
FORM GSTR-1A, which would allow a taxpayer to add any particulars of current
tax period missed out in reporting in FORM GSTR-1 of current tax period or amend
any particulars already declared in FORM GSTR-1 of current tax period.

Backdrop for the introduction of the proposed FORM GSTR-1A

2. Various efforts are underway to streamline the returns being filed by the
taxpayers vis –a vis FORM GSTR 3B. Currently, tax liability in FORM GSTR 3B is
being auto populated from FORM GSTR 1, however, the auto populated figures can
be edited by the taxpayer. It results in allowing a taxpayer to file his FORM GSTR-
3B with tax liability which is different from that which has been declared in his
corresponding FORM GSTR-1, triggering issuance of Form DRC-01B under Rule
88C of CGST Rules 2017, if such a difference exceeds the specified amount and
specified percentage as may be recommended by the GST Council.

3. In order to minimize manual interference in filing of FORM GSTR 3B,
which results in unintended errors, it has been envisaged that in the future, the tax
liabilities in FORM GSTR-3B would be auto populated from that declared in FORM
GSTR-1 and the same would not be editable i.e. tax liability in FORM GSTR-3B
shall be locked on the basis of the tax liability which has been declared by the
taxpayer in his FORM GSTR-1. However, in such a scenario, there may be cases
where a taxpayer, after having filed FORM GSTR-1, realizes that some amendment
(downward or upward) is required to be made in his tax liability in FORM GSTR-1,
failing which he would have no option but to a pay tax liability in corresponding
FORM GSTR-3B which is either more or less than his actual tax liability. To
address the same, an optional FORM GSTR-1A has been proposed, for either
amending the details declared in FORM GSTR-1 for the said tax period, or to
declare new details.



Agenda for 53rd GSTCM Volume 1
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Key features of the proposed FORM GSTR-1A

4. FORM GSTR-1A is an optional facility provided to add any particulars of
supply of the current tax period missed out in reporting in FORM GSTR-1 of the
said tax period or to amend any particulars already declared in FORM GSTR-1 of
the current tax period (including those declared in IFF, for the first and second
months of a quarter, if any, for quarterly taxpayers). Its key features are as follows:

● FORM GSTR-1A shall be an optional facility without levy of late fees. This can be
filed only once for a return period.

● FORM GSTR 1A will be available on the portal after the due date of filing of
FORM GSTR -1 or the actual date of filing of FORM GSTR -1, whichever is later,
till filing of corresponding FORM GSTR-3B of the same tax period.
● Similarly, for quarterly taxpayers, the FORM GSTR-1A shall be available quarterly
after filing of FORM GSTR-1 (Quarterly) or the due date of filing of FORM GSTR
-1 (Quarterly), whichever is later, till filing of FORM GSTR-3B of the same tax
period.
● The tax liabilities in respect of supplies declared in FORM GSTR-1A and GSTR-1
for a tax period shall be auto-populated in FORM GSTR-3B for that tax period.

● In the case of taxpayers who have opted for QRMP scheme, the tax liability is
respect of supplies declared in FORM GSTR-1A, along with the details furnished in
FORM GSTR-1 and IFF of Month M1 and M2 (if filed), shall be made available in
FORM GSTR-3B (Quarterly). However, there will be no facility of FORM IFFA or
IFF-1A.
● Amendment of a document which is related to change of Recipient’s GSTIN shall
not be allowed in FORM GSTR-1A.
● Supplies declared or amended in FORM GSTR-1A shall be made available to the
recipient in the next open FORM GSTR-2B. For example,
i. a supplier issues two invoices INV1 and INV2 in the month of January 2023. Then,
he furnished the details of the invoice INV1 on 8th Feb 2023 in FORM GSTR-1.
However, he misses one invoice INV2 and furnishes the details of the same in
FORM GSTR-1A on 15th Feb 2023. In this case, INV1 will go to the FORM
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GSTR-2B of the recipient for the month of January made available on 14th Feb
2023. Further, INV2 will be made available in FORM GSTR-2B of the recipient for
the month of February made available on 14th March 2023.

ii. a supplier issues two invoices INV3 and INV4 in the month of January 2023. Then
he furnished the details of the invoice INV3 on 15th Feb 2023 in FORM GSTR-1.
However, he declared INV 4 in FORM GSTR-1A on 16th Feb 2023. In this case,
both INV3 and INV4 will be made available in FORM GSTR-2B of the recipient
for the month of February made available on 14th March 2023.

5. Law Committee, in its meeting held on 24.01.2024, 31.01.2024 and
09.02.2024 and 18.03.2024 deliberated on the matter and recommended
introduction of proposed FORM GSTR-1A to facilitate the taxpayers to correct
errors which have been made in the FORM GSTR-1, before having to pay incorrect
liability in auto-populated FORM GSTR 3B. Law committee also recommended
consequential amendments in FORM DRC-01B, FORM RFD-01, FORM GSTR-
2A, FORM GSTR-2B, FORM GSTR-4A, FORM GSTR-6A, FORM GSTR-8,
FORM GSTR-9. Apart from consequential changes due to the proposed FORM
GSTR-1A, Law committee also recommended changes in FORM GSTR-2B on
account of:
a. introduction of a table to provide details (on annual basis) of invoice or debit note
against which ITC is required to be reversed in terms of Rule 37A of CGST Rules;
b. Furnishing the details of section 9(5) supplies in FORM GSTR-1 by E-commerce
operators; and
c. amendment in advisory/instructions in the FORM GSTR-2B to the effect that
negative credit (on account of invoice or debit note amendment or due to a credit
note) is to be netted off in respective rows in Table 4(A) of FORM GSTR-3B
instead of Table 4(B)(2) of the same.

Draft of FORM GSTR-1A, along with amendments in other FORMS, as approved
by Law committee are enclosed as Annexure B to this agenda.

6. Law committee also recommended that rule 59, 60 and 88C of CGST Rules
2017 need to be amended accordingly. Besides, consequential amendment will also
be required in rules 21, 21A, 36, 37A, 40, 48, 78, 96, 96A and 163 of the CGST
Rules 2017. Amendments in CGST Rules, as recommended by Law committee, are
enclosed as Annexure A to this agenda.

7. Accordingly, the agenda is placed before the Council for approval.
Agenda for 53rd GSTCM Volume 1
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Annexure A


Rule 21.Registration to be cancelled in certain cases.-The registration granted to a
person is liable to be cancelled, if the said person,-
....
(f) furnishes the details of outward supplies in FORM GSTR-1 as amended in
FORM GSTR-1A, if any, under section 37 for one or more tax periods which is in
excess of the outward supplies declared by him in his valid return under section 39
for the said tax periods; or
....
Rule 21A Suspension of registration.-
....
(2A) Where, a comparison of the returns furnished by a registered person under
section 39 with
the details of outward supplies furnished in FORM GSTR-1 as amended in FORM
GSTR-1A, if any; or
the details of inward supplies derived based on the details of outward supplies
furnished by his suppliers in their FORM GSTR-1 or in FORM GSTR-1A of the
previous tax period, if any,
or such other analysis, as may be carried out on the recommendations of the
Council, show that there are significant differences or anomalies indicating
contravention of the provisions of the Act or the rules made thereunder, leading to
cancellation of registration of the said person, his registration shall be suspended
and the said person shall be intimated in FORM GST REG-31, electronically, on
the common portal, or by sending a communication to his e-mail address provided
at the time of registration or as amended from time to time, highlighting the said
differences and anomalies and asking him to explain, within a period of thirty days,
as to why his registration shall not be cancelled.
...
Rule 36. Documentary requirements and conditions for claiming input tax credit.-
Agenda for 53rd GSTCM Volume 1
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....
(4) No input tax credit shall be availed by a registered person in respect of
invoices or debit notes the details of which are required to be furnished under
subsection (1) of section 37 unless,-

(a) the details of such invoices or debit notes have been furnished by the supplier in
the statement of outward supplies in FORM GSTR-1 as amended in FORM GSTR-
1A, if any, or using the invoice furnishing facility; and (b) the details of input tax
credit in respect of such invoices or debit notes have been communicated to the
registered person in FORM GSTR-2B under sub-rule (7) of rule 60.

Provided that the said condition shall apply cumulatively for the period
February, March, April, May, June, July and August, 2020 and the return in FORM
GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative
adjustment of input tax credit for the said months in accordance with the condition
above.
Provided further that such condition shall apply cumulatively for the period
April, May and June, 2021 and the return in FORM GSTR-3B for the tax period
June, 2021 or quarter ending June, 2021, as the case may be, shall be furnished
with the cumulative adjustment of input tax credit for the said months in accordance
with the condition above.
....

Rule 37A. Reversal of input tax credit in the case of non-payment of tax by the
supplier and re-availment thereof.- Where input tax credit has been availed by a
registered person in the return in FORM GSTR-3B for a tax period in respect of
such invoice or debit note, the details of which have been furnished by the supplier
in the statement of outward supplies in FORM GSTR-1 as amended in FORM
GSTR-1A, if any, or using the invoice furnishing facility, but the return in FORM
GSTR-3B for the tax period corresponding to the said statement of outward
supplies has not been furnished by such supplier till the 30th day of September
following the end of financial year in which the input tax credit in respect of such
invoice or debit note has been availed, the said amount of input tax credit shall be
reversed by the said registered person, while furnishing a return in FORM GSTR-
3B on or before the 30th day of November following the end of such financial year:
Provided that where the said amount of input tax credit is not reversed by the
registered person in a return in FORM GSTR-3B on or before the 30th day of
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November following the end of such financial year during which such input tax
credit has been availed, such amount shall be payable by the said person along with
interest thereon under section 50.
Provided further that where the said supplier subsequently furnishes the return in
FORM GSTR-3B for the said tax period, the said registered person may re-avail
the amount of such credit in the return in FORM GSTR-3B for a tax period
thereafter.

Rule 40. Manner of claiming credit in special circumstances.-(1) The input tax
credit claimed in accordance with the provisions of sub-section (1) of section 18 on
the inputs held in stock or inputs contained in semi-finished or finished goods held
in stock, or the credit claimed on capital goods in accordance with the provisions of
clauses (c) and (d) of the said sub-section, shall be subject to the following
conditions, namely,-
...
(e) the input tax credit claimed in accordance with the provisions of clauses (c) and
(d) of sub-section (1) of section 18 shall be verified with the corresponding details
furnished by the corresponding supplier in FORM GSTR-1 and in FORM GSTR-
1A, if any, or as the case may be, in FORM GSTR- 4, on the common portal.
...

Rule 48. Manner of issuing invoice.-
...
(3) The serial number of invoices issued during a tax period shall be furnished
electronically through the common portal in FORM GSTR-1 or FORM GSTR-1A, if
any.
...
Rule 59. Form and manner of furnishing details of outward supplies. -
(1) Every registered person, other than a person referred to in section 14 of the
Integrated Goods and Services Tax Act, 2017 (13 of 2017), required to furnish the
details of outward supplies of goods or services or both under section 37, shall
furnish such details in FORM GSTR-1 for the month or the quarter, as the case
may be, electronically through the common portal, either directly or through a
Facilitation Centre as may be notified by the Commissioner.
Agenda for 53rd GSTCM Volume 1
Page 229 of 477
Provided that the said person may, after furnishing the details of outward supplies
of goods or service or both in FORM GSTR-1 for a tax period but before filing of
return in FORM GSTR-3B for the said tax period, at his own option, amend or
furnish additional details of outward supplies of goods or services or both in FORM
GSTR-1A for the said tax period electronically through the common portal, either
directly or through a Facilitation Centre as may be notified by the Commissioner.
(2) The registered persons required to furnish return for every quarter under
proviso to subsection (1) of section 39 may furnish the details of such outward
supplies of goods or services or both to a registered person, as he may consider
necessary, for the first and second months of a quarter, up to a cumulative value of
fifty lakh rupees in each of the months,- using invoice furnishing facility (hereafter
in this notification referred to as the "IFF") electronically on the common portal,
duly authenticated in the manner prescribed under rule 26, from the 1st day of the
month succeeding such month till the 13th day of the said month.
Provided that a registered person may furnish such details, for the month of April,
2021, using IFF from the 1st day of May, 2021 till the 28th day of May, 2021.
Provided further that a registered person may furnish such details, for the month of
May, 2021, using IFF from the 1st day of June, 2021 till the 28th day of June, 2021.
(3) The details of outward supplies furnished using the IFF, for the first and second
months of a quarter, shall not be furnished in FORM GSTR-1 or FORM GSTR-1A
for the said quarter.
(4) The details of outward supplies of goods or services or both furnished in FORM
GSTR-1 shall include the-
(a) invoice wise details of all -
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than one* lakh rupees made to the
unregistered persons;
(b) consolidated details of all -
(i) intra-State supplies made to unregistered persons for each rate of tax; and
Agenda for 53rd GSTCM Volume 1
Page 230 of 477
(ii) State wise inter-State supplies with invoice value upto one* lakh rupees made to
unregistered persons for each rate of tax;
(c) debit and credit notes, if any, issued during the month for invoices issued
previously.
(4A) The additional details or the amendments of the details of outward supplies of
goods or services or both furnished in FORM GSTR-1A may, as per the
requirement of the registered person, include the-
(a) invoice wise details of -
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than one* lakh rupees made to the
unregistered persons;
(b) consolidated details of -
(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto one* lakh rupees made to
unregistered persons for each rate of tax;
(c) debit and credit notes, if any, issued during the month for invoices issued
previously.
(5) The details of outward supplies of goods or services or both furnished using the
IFF shall include the -
(a) invoice wise details of inter-State and intra-State supplies made to the registered
persons;
(b) debit and credit notes, if any, issued during the month for such invoices issued
previously.]
(6) Notwithstanding anything contained in this rule, -
(a) a registered person shall not be allowed to furnish the details of outward
supplies of goods or services or both under section 37 in FORM GSTR-1, if he has
not furnished the return in FORM GSTR-3B for the preceding month
Agenda for 53rd GSTCM Volume 1
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(b) a registered person, required to furnish return for every quarter under the
proviso to subsection (1) of section 39, shall not be allowed to furnish the details of
outward supplies of goods or services or both under section 37 in FORM GSTR-
1 or using the invoice furnishing facility, if he has not furnished the return in FORM
GSTR-3B for preceding tax period;
(c) ****.
(d) a registered person, to whom an intimation has been issued on the common
portal under the provisions of sub-rule (1) of rule 88C in respect of a tax period,
shall not be allowed to furnish the details of outward supplies of goods or services
or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility
for a subsequent tax period, unless he has either deposited the amount specified in
the said intimation or has furnished a reply explaining the reasons for any amount
remaining unpaid, as required under the provisions of sub-rule (2) of rule 88C.
………
(Note: * The said amendments are is in line with the proposal in another agenda note
to reduce the threshold from the present Rs 2.5 Lakh to Rs 1 Lakh for invoice-wise
reporting of B2C inter-State supplies in FORM GSTR-1.)
Rule 60. Form and manner of ascertaining details of inward supplies.-
(1) The details of outward supplies furnished by the supplier in FORM GSTR-1 or
FORM GSTR-1A or using the IFF shall be made available electronically to the
concerned registered persons (recipients) in Part A of FORM GSTR-2A, in FORM
GSTR-4A and in FORM GSTR-6A through the common portal, as the case may
be .
(2) The details of invoices furnished by an non-resident taxable person in his return
in FORM GSTR-5 under rule 63 shall be made available to the recipient of credit
in Part A of FORM GSTR 2A electronically through the common portal.
(3) The details of invoices furnished by an Input Service Distributor in his return
in FORM GSTR-6 under rule 65 shall be made available to the recipient of credit
in Part B of FORM GSTR 2A electronically through the common portal.
(4) The details of tax deducted at source furnished by the deductor under sub-
section (3) of section 39 in FORM GSTR-7 shall be made available to
Agenda for 53rd GSTCM Volume 1
Page 232 of 477
the deductee in Part C of FORM GSTR-2A electronically through the common
portal
(5) The details of tax collected at source furnished by an e-commerce operator
under section 52 in FORM GSTR-8 shall be made available to the concerned
person in Part C of FORM GSTR 2A electronically through the common portal.
(6) The details of the integrated tax paid on the import of goods or goods brought in
domestic Tariff Area from Special Economic Zone unit or a Special Economic Zone
developer on a bill of entry shall be made available in Part D of FORM GSTR-
2A electronically through the common portal.
(7) An auto-generated statement containing the details of input tax credit shall be
made available to the registered person in FORM GSTR-2B, for every month,
electronically through the common portal, and shall consist of -
(i) the details of outward supplies furnished by his supplier, other than a supplier
required to furnish return for every quarter under proviso to sub-section
(1)of section 39, in FORM GSTR-1, between the day immediately after the due date
of furnishing of FORM GSTR-1 for the previous month to the due date of furnishing
of FORM GSTR-1 for the month;
(ii) the details of invoices furnished by a non-resident taxable person in FORM
GSTR-5 and details of invoices furnished by an Input Service Distributor in his
return in FORM GSTR-6 and details of outward supplies furnished by his supplier,
required to furnish return for every quarter under proviso to sub-section (1)
of section 39, in FORM GSTR-1 or using the IFF, as the case may be, -
(a) for the first month of the quarter, between the day immediately after the due
date of furnishing of FORM GSTR-1 for the preceding quarter to the due date of
furnishing details using the IFF for the first month of the quarter ;
(b) for the second month of the quarter, between the day immediately after the due
date of furnishing details using the IFF for the first month of the quarter to the due
date of furnishing details using the IFF for the second month of the quarter;
(c) for the third month of the quarter, between the day immediately after the due
date of furnishing of details using the IFF for the second month of the quarter to the
due date of furnishing of FORM GSTR-1 for the quarter;
Agenda for 53rd GSTCM Volume 1
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(iia) the additional details or amendments in details of outward supplies furnished
by his supplier in FORM GSTR-1A filed between the day immediately after the due
date of furnishing of FORM GSTR-1 for the previous tax period to the due date of
furnishing of FORM GSTR-1 for the current tax period.
(iii) the details of the integrated tax paid on the import of goods or goods brought
in the domestic Tariff Area from Special Economic Zone unit or a Special Economic
Zone developer on a bill of entry in the month.
(8) The Statement in FORM GSTR-2B for every month shall be made available to
the registered person,-
(i) for the first and second month of a quarter, a day after the due date of furnishing
of details of outward supplies for the said month, in the IFF by a registered person
required to furnish return for every quarter under proviso to sub-section (1)
of section 39, or in FORM GSTR-1 by a registered person, other than those
required to furnish return for every quarter under proviso to sub-section (1)
of section 39, whichever is later;
(ii) in the third month of the quarter, a day after the due date of furnishing of details
of outward supplies for the said month, in FORM GSTR-1 by a registered person
required to furnish return for every quarter under proviso to sub-section (1)
of section 39.

Rule 78. Matching of details furnished by the e-Commerce operator with
the details furnished by the supplier.-The following details relating to the supplies
made through an e-Commerce operator, as declared in FORM GSTR-8, shall be
matched with the corresponding details declared by the supplier in FORM GSTR-1
as amended in FORM GSTR-1A, if any,
(a) State of place of supply; and
(b) net taxable value:

Provided that where the time limit for furnishing FORM GSTR-1 under
section 37 has been extended, the date of matching of the above mentioned details
shall be extended accordingly.
Provided further that the Commissioner may, on the recommendations of the
Council, by order, extend the date of matching to such date as may be specified
therein.
Agenda for 53rd GSTCM Volume 1
Page 234 of 477
Rule 88 C. Manner of dealing with difference in liability reported in statement of
outward supplies and that reported in return.-
(1) Where the tax payable by a registered person, in accordance with the statement
of outward supplies furnished by him in FORM GSTR-1 as amended in FORM
GSTR-1A, if any, or using the Invoice Furnishing Facility in respect of a tax period,
exceeds the amount of tax payable by such person in accordance with the return for
that period furnished by him in FORM GSTR-3B, by such amount and such
percentage, as may be recommended by the Council, the said registered person
shall be intimated of such difference in Part A of FORM GST DRC-01B,
electronically on the common portal, and a copy of such intimation shall also be
sent to his e-mail address provided at the time of registration or as amended from
time to time, highlighting the said difference and directing him to—
(a) pay the differential tax liability, along with interest under section 50,
through FORM GST DRC-03; or
(b) explain the aforesaid difference in tax payable on the common portal,
within a period of seven days.
(2) The registered person referred to sub-rule (1) shall, upon receipt of the
intimation referred to in that sub-rule, either,-
(a) pay the amount of the differential tax liability, as specified in Part A of FORM
GST DRC-01B, fully or partially, along with interest under section 50,
through FORM GST DRC-03 and furnish the details thereof in Part B of FORM
GST DRC-01B electronically on the common portal; or
(b) furnish a reply electronically on the common portal, incorporating reasons in
respect of that part of the differential tax liability that has remained unpaid, if any,
in Part B of FORM GST DRC-01B,
within the period specified in the said sub-rule.
(3) Where any amount specified in the intimation referred to in sub-rule (1) remains
unpaid within the period specified in that sub-rule and where no explanation or
reason is furnished by the registered person in default or where the explanation or
reason furnished by such person is not found to be acceptable by the proper officer,
the said amount shall be recoverable in accordance with the provisions of section
79.
Agenda for 53rd GSTCM Volume 1
Page 235 of 477
Rule 96. Refund of integrated tax paid on goods or services exported out of
India.-(1) The shipping bill filed by an exporter of goods shall be deemed to be an
application for refund of integrated tax paid on the goods exported out of India and
such application shall be deemed to have been filed only when:-
(a) the person in charge of the conveyance carrying the export goods duly files a
departure manifest or an export manifest or an export report covering the number
and the date of shipping bills or bills of export; and
(b) the applicant has furnished a valid return in FORM GSTR-3B:
Provided that if there is any mismatch between the data furnished by the exporter of
goods in Shipping Bill and those furnished in statement of outward supplies in
FORM GSTR-1 as amended in FORM GSTR-1A, if any, such application for
refund of integrated tax paid on the goods exported out of India shall be deemed to
have been filed on such date when such mismatch in respect of the said shipping bill
is rectified by the exporter;
(c) the applicant has undergone Aadhaar authentication in the manner provided in
rule 10B;
(2) The details of the relevant export invoices in respect of export of goods
contained in FORM GSTR-1 as amended in FORM GSTR-1A, if any, shall be
transmitted electronically by the common portal to the system designated by the
Customs and the said system shall electronically transmit to the common portal, a
confirmation that the goods covered by the said invoices have been exported out of
India.
Provided that where the date for furnishing the details of outward supplies
in FORM GSTR-1 for a tax period has been extended in exercise of the powers
conferred under section 37 of the Act, the supplier shall furnish the information
relating to exports as specified in Table 6A of FORM GSTR-1 after the return in
FORM GSTR-3B has been furnished and the same shall be transmitted
electronically by the common portal to the system designated by the Customs:
Provided further that the information in Table 6A furnished under the first
proviso shall be auto-drafted in FORM GSTR-1 for the said tax period.
....
Rule 96A. Export of goods or services under bond or Letter of Undertaking.-
...
Agenda for 53rd GSTCM Volume 1
Page 236 of 477
(2) The details of the export invoices contained in FORM GSTR-1 as amended
in FORM GSTR-1A, if any, furnished on the common portal shall be electronically
transmitted to the system designated by Customs and a confirmation that the goods
covered by the said invoices have been exported out of India shall be electronically
transmitted to the common portal from the said system.
Provided that where the date for furnishing the details of outward supplies
in FORM GSTR-1 for a tax period has been extended in exercise of the powers
conferred under section 37 of the Act, the supplier shall furnish the information
relating to exports as specified in Table 6A of FORM GSTR-1 after the return in
FORM GSTR-3B has been furnished and the same shall be transmitted
electronically by the common portal to the system designated by the Customs:
Provided further that the information in Table 6A furnished under the first
proviso shall be auto-drafted in FORM GSTR-1 for the said tax period.
...
Rule 163. Consent based sharing of information.-
...
(1) Where a registered person opts to share the information furnished in—
(a) FORM GST REG-01 as amended from time to time;
(b) return in FORM GSTR-3B for certain tax periods;
(c) FORM GSTR-1 as amended in FORM GSTR-1A, if any, for certain tax periods,
pertaining to invoices, debit notes and credit notes issued by him, as amended from
time to time,
with a system referred to in sub-section (1) of section 158A (hereinafter referred to
as “requesting system”), the requesting system shall obtain the consent of the said
registered person for sharing of such information and shall communicate the
consent along with the details of the tax periods, where applicable, to the common
portal.
...







Agenda for 53rd GSTCM Volume 1
Page 237 of 477
Annexure B
FORM GSTR-1A
Amendment of outward supplies of goods or services for current tax period
[Financial
Year]

[Tax Period]

1. GSTIN
2.
(a)
Legal name of the registered
person

(b) Trade name, if any
3. (a) ARN <Auto>
(b) Date of ARN <Auto>

4. Taxable outward supplies made to registered persons (including UIN-holders)
other than supplies covered by Table 6
(Amount in Rs. for all Tables)
GSTIN
/ UIN

Invoice details Rate Taxable
value
Amount Place of
Supply
(Name of
State/UT)
No. Date Valu
e
Integra
ted
Tax
Centra
l Tax
State /
UT
Tax
Cess
1 2 3 4 5 6 7 8 9 10 11
4A. Supplies other than those [attracting reverse charge (including supplies made through e-
commerce operator attracting TCS)]


4B. Supplies attracting tax on reverse charge basis



5. Taxable outward inter-State supplies to un-registered persons where the invoice
value is more than Rs 1 lakh*
Place of
Supply
(State/UT)
Invoice details Rate Taxable
Value
Amount
No. Date Valu
e
Integr
ated
Tax
Cess
1 2 3 4 5 6 7 8
5. Outward supplies (including supplies made through e-commerce operator, rate wise)

Agenda for 53rd GSTCM Volume 1
Page 238 of 477
(Note: * This is in line with the proposal in another agenda note to reduce the threshold from the
present Rs 2.5 Lakh to Rs 1 Lakh for invoice-wise reporting of B2C inter-State supplies in FORM
GSTR-1.)

6. Zero rated supplies and Deemed Exports

GST
IN
of
reci
pien
t
Invoice details Shippin
g bill/
Bill of
export
Integrated Tax Central Tax State / UT Tax Cess
N
o.
D
at
e
V
al
u
e
N
o
.
D
at
e
R
at
e
T
ax
ab
le
va
lu
e
A
mt
R
at
e
T
ax
ab
le
va
lu
e
A
m
t
R
at
e
T
ax
ab
le
va
lu
e
A
m
t

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
6A. Exports

6B. Supplies made to SEZ unit or SEZ Developer

6C. Deemed exports

7. Taxable supplies (Net of debit notes and credit notes) to unregistered persons other
than the supplies covered in Table 5
Rate of
tax
Total Taxable value Amount
Integrated Central State Tax/UT Tax Cess
1 2 3 4 5 6
7A. Intra-State supplies
Consolidated rate wise outward supplies [including supplies made through e-commerce operator
attracting TCS]

7B. Inter-State Supplies where invoice value is upto Rs 1 Lakh* [Rate wise]–Consolidated rate wise
outward supplies [including supplies made through e-commerce operator attracting TCS]
Place of Supply (Name of State)



Agenda for 53rd GSTCM Volume 1
Page 239 of 477
8. Nil rated, exempted and non-GST outward supplies
Description Nil Rated
Supplies
Exempted
(Other than Nil
rated/non-GST supply)
Non-GST
supplies
1 2 3 4
8A. Inter-State supplies to registered
persons

8B. Intra- State supplies to registered
persons

8C. Inter-State supplies to unregistered
persons

8D. Intra-State supplies to unregistered
persons


9. Amendments to taxable outward supply details furnished FORM- GSTR-1 for the
current tax periods in Table 4, 5 and 6 [including debit and credit notes issued during
current period and amendments thereof]

Details of
original
document
Revised details of document
or details of original Debit or
Credit Notes
R
at
e
Taxa
ble
Valu
e
Amount Plac
e of
sup
ply G
S
TI
N
D
oc
.
N
o.
D
oc
.
D
at
e

G
ST
IN
Docum
ent
Shippin
g bill
Va
lu
e
Inte
grat
ed
Tax
Cen
tral
Tax
Stat
e /
UT
Tax
Cess
N
o
Da
te
N
o.
Da
te
1 2 3 4 5 6 7 8 9 1
0
11 12 13 14 15 16
9A. Amendment of invoice/Shipping bill details furnished
9B. Debit Notes/Credit Notes [original]

9C. Debit Notes/Credit Notes [Amended]

10. Amendments to taxable outward supplies to unregistered persons furnished in FORM
GSTR-1 for current tax periods in Table 7
Rate of tax Total
Taxable
value
Amount
Integrated
Tax
Central
Tax
State/UT
Tax
UT Tax
Cess
1 2 3 4 5 6
Agenda for 53rd GSTCM Volume 1
Page 240 of 477
Tax period for which the details are
being revised
(current tax period should be auto populated here)
10A. Intra-State Supplies[including supplies made through e-commerce operator attracting TCS]
[Rate wise]

10B. Inter-State Supplies[including supplies made through e-commerce operator attracting TCS]
[Rate wise]
Place of Supply (Name of State)

11. Consolidated Statement of Advances Received/Advance adjusted in the current tax
period/ Amendments of information furnished in current tax period [(Net of refund
vouchers, if any)]

Rate Gross Advance
Received/adjusted
Place
of
supply
(Name
of
State
/UT)
Amount
Integ
rated
Tax
Cent
ral
Tax
State/
UT
Tax
UT
Tax
Cess
1 2 3 4 5 6 7
I Information for the current tax period
11A. Advance amount received in the tax period for which invoice has not been issued (tax amount
to be added to output tax liability)
11A (1). Intra-State supplies(Rate Wise)

11A (2). Inter-State Supplies(Rate Wise)

11B. Advance amount received in earlier tax period and adjusted against the supplies being shown in
this tax period in Table Nos. 4, 5, 6 and 7
11B (1). Intra-State Supplies (Rate Wise)

11B (2). Inter-State Supplies(Rate Wise)
II Amendment of information furnished in Table No. 11[1] in GSTR-1 statement for current tax
period [Furnish revised information]
Mon
th
Amendment relating to
information furnished in S.
No.(select)
11A(
1)
11A(
2)
11B(
1)
11B(
2)




Agenda for 53rd GSTCM Volume 1
Page 241 of 477


12. HSN-wise summary of outward supplies
Sr.
No.
H
S
N
Descripti
on
U
Q
C
Total
Quanti
ty
Rat
e of
Tax
Total
Taxa
ble
Valu
e
Amount
Integr
ated
Tax

Centr
al Tax
State/
UT
Tax
Cess
1 2 3 4 5 6 7

8 9 10 11



13. Documents issued during the tax period
Sr.
No.
Nature of document Sr. No. Total
number
Cancelled Net issued
From To
1 2 3 4 5 6 7
1 Invoices for outward supply
2
Invoices for inward supply from
unregistered person

3 Revised Invoice
4 Debit Note
5 Credit Note
6 Receipt voucher
7 Payment Voucher
8 Refund voucher
9 Delivery Challan for job work
10
Delivery Challan for supply on
approval

11 Delivery Challan in case of
liquid gas

12 Delivery Challan in cases other
than by way of supply
(excluding at S no. 9 to 11)


Agenda for 53rd GSTCM Volume 1
Page 242 of 477
14. Details of the supplies made through e-commerce operators on which e-commerce
operators are liable to collect tax under section 52 of the Act or liable to pay tax u/s 9(5)
[Supplier to report]

Nature of supply GSTIN of
e-commerce
operator
Net
value of
supplies
Tax amount
Integrated
tax
Central
tax
State /
UT tax
Cess
1 2 3 4 5 6 7
(a) Supplies on which
e-commerce operator
is liable to collect tax
u/s 52

(b) Supplies on which
e-commerce operator
is liable to pay tax u/s
9(5)


14A. Amendment to details of the supplies made through e-commerce operators on
which e-commerce operators are liable to collect tax under section 52 of the Act or
liable to pay tax u/s 9(5) [Supplier to report]
Nature of supply Original details Revised
details
Net
value
of
supplie
s
Tax amount
Month /
Quarter
GSTIN
of
e-
commer
ce
operator
GSTIN of
e-
commerce
operator
Integr
ated
tax
Centra
l tax
State
/
UT
tax
Cess
1 2 3 4 5 6 7 8 9
(a) Supplies on
which e-commerce
operator is liable to
collect tax u/s 52

(b) Supplies on
which e-commerce
operator is liable to
pay tax u/s 9(5)

Agenda for 53rd GSTCM Volume 1
Page 243 of 477


15. Details of the supplies made through e-commerce operators on which e-
commerce operator is liable to pay tax u/s 9(5) [e-commerce operator to report]
Type of
suppl
ier
Type of
recipien
t
GST
IN
of
supp
lier
GSTI
N of
recip
ient
Docu
ment
no.
Docu
ment
date
R
at
e
Val
ue
of
sup
plie
s
mad
e

Tax
amount
Place of
supply
Integr
ated
tax
Ce
ntr
al
tax
Stat
e /
UT
tax
Cess
1 2 3 4 5 6 7 8 9 1
0
11 12 13
Register
ed
Register
ed

Unregis
tered

Unregis
tered
Register
ed

Unregis
tered











Agenda for 53rd GSTCM Volume 1
Page 244 of 477

15A (I). Amendment to details of the supplies made through e-commerce operators on
which e-commerce operator is liable to pay tax u/s 9(5) [e-commerce operator to report,
for registered recipients]
Type of
supplier
Original details Revised details Value of
supplies
made
Tax
amoun
t
Place
of
supply
GS
TI
N
of
sup
pli
er
GS
TI
N
of
re
ci
pi
en
t
D
oc
.
no
.
D
oc
.
Da
te
GS
TI
N
of
su
pp
lie
r
GS
TI
N
of
re
ci
pi
en
t
D
oc
.
no
.
D
oc
.
Da
te
R
a
t
e
Integ
rated
tax
Ce
ntr
al
ta
x
S
ta
te
/
U
T
ta
x
C
e
s
s
1 2 3 4 5 6 7 8 9 1
0

11 12 1
3
1
4
1
5
16
Register
ed

Unregist
ered






Agenda for 53rd GSTCM Volume 1
Page 245 of 477
15A (II). Amendment to details of the supplies madethrough e-commerce operators
on which e-commerce operator is liable to pay tax u/s 9(5) [e-commerce operator to
report, for unregistered recipients]
Type of
supplier
Original
details
Revis
ed
details
Ra
te
Value
of
suppli
es
made
Tax
amount
Plac
e of
supp
ly GSTI
N of
suppli
er
Tax
perio
d
GSTIN
of
suppli
er

Integrate
d tax
Cent
ral
tax
Stat
e /
UT
tax
Ce
ss
1 2 3 4 5 6 7 8 9 10 11
Registered
Unregistered ”;

Instructions for filing of GSTR-1A:
1. It is an additional facility provided to add any particulars of current tax period
missed out in reporting in FORM GSTR-1 of current tax period or amend any
particulars already declared FORM GSTR-1 of current tax period (including
those declared in IFF, for the first and second months of a quarter, if any, for
quarterly taxpayers) The form is an optional form without levy of late fees.
2. The FORM will be available on the portal after due date of filing of FORM
GSTR -1 or the actual date of filing of FORM GSTR -1, whichever is later, till
filing of corresponding FORM GSTR-3B of the same tax period. Similarly, for
quarterly taxpayers, the FORM GSTR-1A shall be opened quarterly after filing
of the FORM GSTR-1 (Quarterly) or the due date of filing of FORM GSTR -1
(Quarterly), whichever is later, till filing of FORM GSTR-3B of the same tax
period.
3. The particulars declared in FORM GSTR-1A along with particulars declared in
FORM GSTR-1 shall be made available in FORM GSTR-3B. In case of
taxpayers opting for filing of quarterly returns the same shall be made available
in FORM GSTR-3B (Quarterly) along with particulars furnished in FORM
GSTR-1 and IFF of Month M1 and M2 (if filed).
4. Amendment of a document which is related to change of Recipient’s GSTIN
shall not be allowed in GSTR-1A.
5. In addition to the GSTR-2B already generated, GSTR-2B shall also consist of all
the supplies declared by the respective suppliers in GSTR-1A. However,
supplies declared or amended in FORM GSTR-1A shall be made available in the
next open FORM GSTR-2B . For example,
(i) a supplier issues two invoices INV1 and INV2 in the month of January 2023.
Then he furnished the details of the invoice INV1 on 8th Feb 2023 in FORM
GSTR-1. However, he misses one invoice INV2 and furnishes the details of the
same in FORM GSTR-1A on 15th Feb 2023. In this case, INV1 will go to the
FORM GSTR-2B of the recipient for the month of January made available on
Agenda for 53rd GSTCM Volume 1
Page 246 of 477
14th Feb 2023. Further, INV2 will be made available in FORM GSTR-2B of the
recipient for the month of February made available on 14th March 2023.
(ii) a supplier issues two invoices INV3 and INV4 in the month of January 2023.
Then he furnished the details of the invoice INV3 on 15th Feb 2023 in FORM
GSTR-1. However, he declared INV 4 in FORM GSTR-1A on 16th Feb 2023. In
this case, both INV3 and INV4 will be made available in FORM GSTR-2B of
the recipient for the month of February made available on 14th March 2023.


6. Instructions for specific tables:-
Table No. Instructions
4A, 4B, 5, 6, 9B (for
registered recipients)
● Taxpayers may declare additional details of invoices /
documents for the current tax period other than those
already declared in FORM GSTR-1.
7 ● Taxpayers may declare additional details of invoices/
documents for the current tax period other than those
already declared in FORM GSTR-1.
● In case a POS with any combination of rate has already
been declared in FORM GSTR-1, then a new rate cannot
be added through Table 7 and the taxpayer will have to use
amendment facility in Table 10 for the same.
8, ● Taxpayers may declare additional details of Nil rated,
Exempted and Non-GST supplies for the current tax
period other than those already declared in FORM GSTR-
1.
9A and 9C ● Amendment of values reported in table 4A, 4B, 5,
6A, 6B 6C and 9B in IFF, for the first and second
months of a quarter, if any, and FORM GSTR-1 of
the current tax period .
12 ● HSN details as per additional/amendments details
reported in FORM GSTR 1A shall be declared here.
In case of any downward amendment, entry can be
made with the minus sign for the differential part.
11A(1) & 11A(2), 11B(1) &
11B(2)
● Taxpayers may declare details of advances received or
adjusted for the current tax period other than those already
declared in FORM GSTR-1.
● In case a POS with any combination of rate has already
been declared in FORM GSTR-1, then a new rate cannot
be added through these tables and the taxpayer will have
to use amendment Table 11(II)as the case may be.
14 ● Taxpayers may declare additional details of supplies made
Agenda for 53rd GSTCM Volume 1
Page 247 of 477
through e-commerce operator for the current tax period
15 ● ECO Taxpayers may declare additional details of supplies
for unregistered recipients (rate wise) for the current tax
period other than those already declared in FORM GSTR-
1.
10, 11(II), 14A, 15A(I),
15A(II)
● Taxpayers may amend details already declared in FORM
GSTR-1 of the current period.



FORM DRC-01B

a) In Part A, Sr. No. 1, following amendment would be required:-
It is noticed that the Tax payable by you, in accordance with the statement outward
supplies furnished by you in FORM GSTR-1 as amended in FORM GSTR-1A, if any or
using the invoice furnishing facility, exceeds the amount of tax paid by you in
accordance with the return furnished in FORM GSTR-3B for the period <from>< to > by
an amount of Rs. ……………………….The details thereof are as follows:
From Type Liability declared/paid (in Rs.)
IGST CGST SGST/UT
GST
Cess Total
FORM GSTR-
1/GSTR-1A/IFF

FORM GSTR-3B
Difference in
liability


B) In the Table in Sr. No .B of Part B, following amendment would be required:-
B. The reasons in respect of that part of the different tax liability that has remained unpaid,
are as under:
S.N
O.
Brief Reasons for Difference Details
(Mandatory)
1. Excess Liability paid in earlier tax periods in FORM
GSTR-3B

2. Some transactions of earlier tax period which could not
be declared in the FORM GSTR-1/GSTR-1A/IFF of the
said tax period but in respect of which tax has already

Agenda for 53rd GSTCM Volume 1
Page 248 of 477
been paid in FORM GSTR-3B of the said tax period
and which have now been declared in FORM GSTR-
1/GSTR-1A/IFF of the tax period under consideration

3. FORM GSTR-1/GSTR-1A/IFF filed with incorrect
details and will be amended in next tax period
(including typographical errors, wrong tax rates, etc.)

4. Mistake in reporting of advances received and adjusted
against invoices

5. Any other reasons

FORM RFD-01
In the Instructions in Sr. No. 10, ‘For the purpose of Statement-1, refund claim will be
based on supplies reported in GSTR-1 as amended by GSTR-1A, if any.’ requires to be
substituted in place of ‘For the purpose of Statement-1, refund claim will be based on
supplies reported in GSTR-1 and GSTR-2.’
Form GSTR-2Aproposed to be amended as highlighted below:-




























Agenda for 53rd GSTCM Volume 1
Page 249 of 477
FORM GSTR-2A

[See rule 60(1)]

Details of auto drafted supplies

(From GSTR 1, 1A, GSTR 5, GSTR-6, GSTR-7, GSTR-8, import of goods and inward supplies of
goods received from SEZ units / developers)


Year


Month


1
.

GSTIN


2
.

(a)

Legal name of the registered person


(b)

Trade name, if any


PART A

(Amount in Rs. all Tables)

Agenda for 53rd GSTCM Volume 1
Page 250 of 477


3. Inward supplies received from a registered person including supplies attracting reverse
charge



G
S
T
I
N
o
f
s
u
p
p
-
-
li
e
r


T
r
a
d
e
/
L
e
g
a
l
n
a
m
e

Invoice
details


R
a
t
e

(
%
)


T
a
x
-

a
b
l
e

v
a
l
u
e

Amount of
tax

Pl
ace
of
sup
ply
(N
am
e of
Sta
te/
UT
)

Sup
ply
attr
acti
ng
rev
ers
e
cha
rge
(Y/
N)


G
S
T
R
-
1
/
1
A
/
5

p
e
r
i
o
d


G
S
T
R
-
1
/
1
A

/
5

f
i
l
i
n
g

d
a
t
e


G
ST
R-
3B
fili
ng
st
at
us
(Y
es
/
N
o)


Amen
dment
made,
if any
(GSTI
N,
Other
s)


T
a
x

p
e
r
i
o
d

i
n

w
h
i
c
h

a
m
e
n
d
e
d


E
ff
ec
ti
v
e
d
at
e
of
c
a
n
ce
la
ti
o
n,
if
a
n
y


N
o
.


T
y
p
e


D
a
t
e


V
a
l
u
e


Int
e
g
r
a
t
e
d

t
a
x


C
e
n
t
r
a
l

t
a
x


S
t
a
t
e
/

U
T
t
a
x


C
e
s
s


1


2


3


4


5


6


7


8

9

1
0

1
1


1
2

1
3

14

1
5

1
6


17

18

1
9

2
0












Agenda for 53rd GSTCM Volume 1
Page 251 of 477
4. Amendment to Inward supplies received from a registered person including supplies attracting
reverse charge (Amendment to 3)



De
tai
ls
of
ori
gi
na
l
Do
cu
me
nt

Revised
details


R
a
t
e

(
%
)


T
a
x
a
b
l
e

v
a
l
u
e

Amount
of tax


Pl
ac
e
of
su
p
pl
y
(
N
a
m
e
of
St
at
e/
U
T
)


S
u
p
p
l
y
a
tt
r
a
-
c
ti
n
g
r
e
v
e
r
s
e
c
h
a
r
g
e
(
Y
/
N
)


G
S
T
R
-


1
/
1
A

/
5

p
e
r
i
o
d


G
S
T
R
-
1
/
1
A

/
5

f
i
l
i
n
g

d
a
t
e


G
S
T
R
-
3
B
fi
li
n
g
st
at
u
s
(
Y
es
/
N
o)

A
me
nd-
me
nt
ma
de
(G
ST
IN,
Ot
he
rs
)


T
a
x
p
er
io
d
of
or
ig
in
al
re
co
r
d

Eff
ect
ive
dat
e
of
ca
nc-
ell
ati
on
if
an
y,


N
o
.


D
a
t
e


G
S
T
I
N


T
r
a
d
e
/
L
e
g
a
l
n
a
m
e


N
o
.


T
y
p
e


D
a
t
e


V
a
l
u
e


I
n
t
e
g
r
a
t
e
d

t
a
x


C
e
n
t
r
a
l
t
a
x


S
t
a
t
e
/
U
T

t
a
x
/


C
e
s
s


1


2


3

4


5


6


7


8


9

1
0


1
1


1
2


1
3


1
4

15

16


1
7

1
8

19

20

21

22

Agenda for 53rd GSTCM Volume 1
Page 252 of 477

5. Debit / Credit notes received during current tax period



GS
TI
N
of
sup
plie
r


Tr
a
de
/
L
eg
al
n
a
m
e

Credit /
Debit
Note
Details


R
a
t
e
(
%
)


Ta
xa
bl
e
va
lu
e

Amount of
tax


Plac
e of
supp
ly
(Na
me
of
Stat
e/UT
)


Sup
ply
attra
cting
reve
rse
char
ge
(Y/N
)


G
ST
R-
1/
1
A
/5
pe
ri
od


G
S
T
R
-
1/
1
A
/5
-
fi
li
n
g
d
a
t
e


G
S
T
R
-
3
B
fi
li
n
g
st
at
u
s
(
Y
es
/
N
o)


Amen
dment
made,
if any
(GSTI
N,
Oth
ers)


Tax
peri
od
in
whi
ch
ame
nde
d


Effecti
ve
date of
cancell
ation,
if any


N
o
.


N
o
t
e
t
y
p
e


N
ot
e
su
pp
ly
ty
pe


D
a
t
e


V
al
u
e


Integ
ra
te
d
ta
x


Ce
n
tr
al
t
a
x


St
a
t
e
/
U
T
t
a
x


C
e
s
s

1


2


3

4


5


6


7

8

9

1
0

1
1

1
2


1
3

1
4

1
5

1
6

1
7

1
8

19

2
0

2
1






















Agenda for 53rd GSTCM Volume 1
Page 253 of 477
6. Amendment to Debit / Credit notes (Amendment to 5)


Deta
ils of
origi
nal
docu
men
t

Revised
details


R
a
t
e


(
%
)


Ta
xa
bl
e
va
lu
e

Amount of
tax


Pl
ac
e
of
su
pp
ly
(N
a
m
e
of
St
at
e/
U
T)


Supply
attract
ing
revers
e
charge
(Y/N)


G
ST
R-
1/
1
A/
5
pe
ri
od


G
ST
R-
1
/
1
A
/
5
fi
li
n
g
d
a
t
e


GS
T
R
-
3
B
fi
li
n
g
st
at
u
s
(
Y
es
/
N
o)


Am
en-
dm
ent
ma
de
(GS
TI
N,
Ot
her
s)


Ta
x
per
iod
of
ori
gin
al
rec
ord


Effe
ctiv
e
date
of
can
c-
ellat
ion
if
any


T
y
p
e


N
o
.


D
a
t
e


GS
TI
N
of
Sup
plie
r


T
ra
d
e
/
L
e
g
al
n
a
m
e


N
o
.


N
o
t
e
t
y
p
e


N
ot
e
su
pp
ly
ty
pe


D
a
t
e


V
al
u
e


In
te-
gr
at
ed
ta
x


Ce
n
tr
al
t
a
x


St
a
t
e
/
U
T
t
a
x


C
e
s
s


1


2


3

4


5


6


7


8


9


1
0


1
1

1
2

1
3

1
4

1
5


1
6

1
7

1
8

1
9

2
0

2
1


22

2
3

2
4




















Agenda for 53rd GSTCM Volume 1
Page 254 of 477
PART B

7. ISD credit received



GS
TI
N
of
IS
D

Tra
de/
Legal
name

ISD
docu
men
t
detai
ls


ISD invoice
details (for
ISD credit
note only)

ITC amount
involved


GS
TR-
6
Per
iod

GST
R-6
filing
date


Amen-
dment
made,
if any

Tax
Period
in which
amended

I
T
C
Eligi
bilit
y


T
y
pe


N
o
.

Da
te

N
o.

Da
te


Integ
ra
te
d
ta
x


Ce
n
tr
al
t
a
x


St
ate
/
U
T
ta
x


C
e
s
s


1

2

3

4


5


6


7


8

9

10

1
1

12

13

14

15

16








Agenda for 53rd GSTCM Volume 1
Page 255 of 477

8. Amendments to ISD credit details


Origin
al ISD
Docum
ent
Details

Revised details

Original ISD
invoice details
(for ISD credit
note only)

ITC amount
involved

IS
D
GS
TR
-6
Per
iod


ISD
GS
TR
-6
filing
date


Amen
dme
nt
ma
de

Tax
perio
d of
origi
nal
recor
d

I
T
C
Eligi
bilit
y


T
y
p
e


N
o
.


D
a
te


GS
TI
N
of
IS
D

Trade/
Legal
name


T
y
p
e


N
o
.


D
a
t
e

N
o
.

D
a
t
e


Integ
rat
ed
Ta
x


Ce
n
tr
al
T
a
x


St
a
t
e
/
U
T
T
a
x


C
e
s
s


1


2


3

4

5


6


7


8

9

1
0

1
1

1
2

1
3


1
4

1
5

1
6

1
7

1
8

1
9


PART- C

9. TDS and TCS Credit (including amendments thereof) received



GSTIN of
Deductor /
GSTIN of E-
Commerce
Operator

Deducto
r Name /
Ecomme
rce
Operato
r Name

Tax
perio
d of
GST
R-7 /
GST
R-8
(Orig
inal /
Ame
nded)


Amount
received / Gross
value (Original
/ Revised)

Val
ue
of
sup
plie
s
retu
rne
d

Net
amou
nt
liable
for
TCS

Amount (Original /
Revised)


Integ
rat
ed
tax


Centr
al
tax


State
/UT
tax

1

2

3

4

5

6

7

8

9
Agenda for 53rd GSTCM Volume 1
Page 256 of 477

9A. TDS




9B. TCS



Agenda for 53rd GSTCM Volume 1
Page 257 of 477

PART- D

10. Import of goods from overseas on bill of entry (including amendments thereof)

ICEGATE Reference
date
Bill of entry details Amount of tax A
m
e
n
d
e
d

(
Y
e
s
/

N
o
)

Port code

No
.

Date

Value Integrated
tax
Ce
ss
1 2 3 4 5 6 7 8


11. Inward supplies of goods received from SEZ units / developers on bill of entry (including
amendments thereof)


GSTIN of the
Supplier
(SEZ)

Trade /
Legal name

ICEGATE
Reference date
Bill of Entry
details
Amount of
tax
Amen
ded
(Yes/
No)

Port
code
N
o
.
D
at
e
V
a
l
u
e

Integrate
d tax
C
e
ss
1 2 3 4 6

7 8

9

1
0



Agenda for 53rd GSTCM Volume 1
Page 258 of 477
Instructions:

1. Terms Used :-

a. ITC – Input tax credit

b. ISD – Input Service Distributor

2. Important Advisory: FORM GSTR-2A is statement which has been generated on the basis of
the information furnished by your suppliers in their respective FORMS GSTR-1, 1A, 5, 6, 7 and, 8.
It is a dynamic statement and is updated on new addition/amendment made by your supplier in near
real time. The details added by supplier would reflect in corresponding FORM GSTR-2A of the
recipient irrespective of supplier’s date of filing.

3. There may be scenarios where a percentage of the applicable rate of tax rate may be notified by
the Government. A separate column will be provided for invoices / documents where such rate is
applicable.

4. Table wise instructions:


Table No.
and
Heading
Instructions
3 i. The table consists of all the invoices (including invoices
on which reverse charge is applicable) which have been
saved / filed by your suppliers in their FORM GSTR-1,
1A and 5.
ii.Invoice type :
a. R- Regular (Other than SEZ supplies and Deemed
exports)
b. SEZWP- SEZ supplies with payment of tax
c. SEZWOP- SEZ supplies without payment of tax
d. DE- Deemed exports
e. CBW - Intra-State supplies attracting IGST
iii. For every invoice, the period and date of FORM GSTR-
1/1A/5 in which such invoice has been declared and filed
is being provided. It may be noted that the details added
by supplier would reflect in corresponding FORM GSTR-
2A of the recipient irrespective of supplier’s date of
filing. For example, if a supplier files his invoice INV-1
Agenda for 53rd GSTCM Volume 1
Page 259 of 477
dated 10th November 2019 in his FORM GSTR-1 of
March 2020, the invoice will be reflected in FORM
GSTR-2A of March, 2020 only. Similarly, if the supplier
files his FORM GSTR-1 for the month of November on
5th March 2020, the invoice will be reflected in FORM
GSTR-2A of November 2019 for the recipient.
iv. The status of filing of corresponding FORM GSTR-3B
for FORM GSTR-1/1A will also be provided.
v.The table also shows if the invoice or debit note was
amended by the supplier and if yes, then the tax period in
which such invoice was amended, declared and filed. For
example, if a supplier has filed his invoice INV-1 dated
10th November 2019 in his FORM GSTR-1 of November
2019, the invoice will be reflected in FORM GSTR-2A of
November, 2019. If the supplier amends this invoice in
FORM GSTR-1 of December 2019, the amended invoice
will be made available in Table 4 of FORM GSTR-2A of
December 2019. The original record present in Table 3 of
FORM GSTR-2A of November 2019 for the recipient
will now have updated columns of amendment made
(GSTIN, others) and tax period of amendment as
December 2019.
vi. In case, the supplier has cancelled his registration, the
effective date of cancellation will be provided.

4
Amendment
to Inward
supplies
received
from a
registered
person
including
supplies
attracting
reverse
charge
(Amendment
to table 3)
i. The table consists of amendment to invoices
(including invoice on which reverse charge is applicable)
which have been saved/filed by your suppliers in their
FORM GSTR-1, 1A and 5
ii. Tax period in which the invoice was reported
originally and type of amendment will also be provided. For
example, if a supplier has filed his invoice INV-1 dated 10th
November 2019 in his FORM GSTR-1 of November 2019,
the invoice will be reflected in FORM GSTR-2A of
November, 2019. If the supplier amends this invoice in
FORM GSTR-1 of December 2019, the amended invoice
will be made available in Table 4 of FORM GSTR-2A of
December 2019. The original record present in Table 3 of
FORM GSTR-2A of November 2019 for the recipient will
now have updated columns of amendment made (GSTIN,
others) and tax period of amendment as December 2019.

5
Debit / Credit
notes
received
during
current tax
period
i. The table consists of the credit and debit notes (including
credit/debit notes relating to transactions on which reverse
charge is applicable) which have been saved/filed by your
suppliers in their FORM GSTR-1,1A and 5.

ii. If the credit/debit note has been amended subsequently, tax
period in which the note has been amended will also be
Agenda for 53rd GSTCM Volume 1
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provided.

iii. Note Type:
Credit Note Debit Note

iv. Note supply type:
R- Regular (Other than SEZ supplies and Deemed
exports) SEZWP- SEZ supplies with payment of tax
SEZWOP- SEZ supplies without payment of tax DE-
Deemed exports
CBW - Intra-State supplies attracting IGST

v. For every credit or debit note, the period and date of
FORM GSTR-1/1A /5 in which such credit or debit note has
been declared and filed is being provided. It may be noted
that the details added by supplier would reflect in
corresponding FORM GSTR-2A of the recipient irrespective
of supplier’s filing of FORM GSTR-1/1A. For example, if a
supplier files his credit note CN-1 dated 10th November 2019
in his FORM GSTR-1 of March 2020, the credit note will be
reflected in FORM GSTR-2A of March, 2020 only.
Similarly, if the supplier files his FORM GSTR-1 for the
month of November on 5th March 2020, the credit note will
be reflected in FORM GSTR-2A of November 2019 for the
recipient.
vi. The status of filing of corresponding FORM GSTR-3B of
suppliers will also be provided.
vii. The table also shows if the credit note or debit note has
been amended subsequently and if yes, then the tax period
in which such credit note or debit note was amended,
declared and filed.
viii. In case, the supplier has cancelled his registration, the
effective date of cancellation will be displayed.
6

Amendment to
Debit/Credit
notes(Amendm
ent to 5)

i. The table consists of the amendments to credit and debit notes (including
credit/debit notes
on which reverse charge is applicable) which have been saved/filed by
your suppliers in their
FORM GSTR-1/1A and 5.
Agenda for 53rd GSTCM Volume 1
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ii. Tax period in which the note was reported originally will also be
provided.

7

ISD credit
received

i. The table consists of the details of the ISD invoices and ISD credit notes
which have been saved/filed by an input service distributor in their FORM
GSTR-6.

ii. Document Type :
• ISD Invoice
• ISD Credit Note

iii. If ISD credit note is issued subsequent to issue of ISD invoice, original
invoice number and date will also be shown against such credit note. In
case document type is ISD Invoice these columns would be blank

iv. For every ISD invoice or ISD credit note, the period and date of FORM
GSTR-6 in which such respective invoice or credit note has been declared
and filed is being provided.

v. The status of eligibility of ITC on ISD invoices as declared in FORM
GSTR-6 will be provided.

vi.The status of eligibility of ITC on ISD credit notes will be provided.
8
Amendment to
ISD credit
received

i. The table consists of the details of the amendments to details of the ISD
invoices and ISD credit notes which have been saved/filed by an input
service distributor in their FORM GSTR-6.
9
TDS / TCS
credit Received

i. The table consists of the details of TDS and TCS credit from FORM
GSTR-7 and FORM GSTR-8 and its amendments in a tax period..

ii.A separate facility will be provided on the common portal to accept/
reject TDS and TCS credit.
10 & 11
Details of
Import of
goods from
overseas on
bill of entry
and from SEZ
units and
developers and

i. The table consists of details of IGST paid on imports of goods from
overseas and SEZ units / developers on bill of entry and amendment
thereof.

ii. The ICEGATE reference date is the date from which the recipient is
eligible to take input tax credit.

iii. The table also provides if the Bill of entry was amended.
Agenda for 53rd GSTCM Volume 1
Page 262 of 477
their respective
amendments

iv.Information is provided in the tables based on data received from
ICEGATE. Information on certain imports such as courier imports may not
be available.".

Form GSTR-2B:- Proposed to be amended as highlighted below: -
FORM GSTR-2B
Auto-drafted ITC Statement
(From FORM GSTR-1/IFF including E-Commerce supplies, GSTR-1A, GSTR-5, GSTR-6 and Import
data received from ICEGATE)
Financial Year 2023-24
Month September

1. GSTIN
2(a). Legal name of the registered
person

2(b). Trade name, if any GSTN
2(c). Date of generation 14/10/2024

3. ITC Available Summary
(Amount in ₹ for all tables)
S.no. Heading
GSTR-
3B table
Integrated
Tax (₹)
Central
Tax (₹)
State/
UT
tax (₹)
Cess
(₹) Advisory
Credit which may be availed under FORM GSTR-
3B

Part
A
ITC Available - Credit may be claimed in relevant
headings in GSTR-3B

I
All other ITC -
Supplies from
registered persons
other than reverse
charge
4(A)(5) 312.00
7.50
7.50

262.00
Net input
tax credit
may be
availed
under
Table
4(A)(5)
of FORM
GSTR-
3B.


Agenda for 53rd GSTCM Volume 1
Page 263 of 477
S.no. Heading
GSTR-
3B table
Integrated
Tax (₹)
Central
Tax (₹)
State/
UT
tax (₹)
Cess
(₹) Advisory
Deta
ils
B2B - Invoices

540.00 37.50 37.50 62.00

B2B - Debit notes 300.00 0.00 0.00 200.00
ECO - Documents 300.00 0.00 0.00 200.00
B2B - Invoices
(Amendment) -528.00 -30.00 -30.00 0.00
B2B - Debit notes
(Amendment) 0.00 0.00 0.00 0.00

ECO - Documents
(Amendment) 0.00 0.00 0.00 0.00
II
Inward Supplies from
ISD
4(A)(4) 24.00 0.00 0.00 24.00
Net input
tax credit
may be
availed
under
Table
4(A)(4)
of FORM
GSTR-
3B.

Deta
ils
ISD – Invoices
24.00 0.00 0.00 24.00
ISD - Invoices
(Amendment) 0.00 0.00 0.00 0.00
III
Inward Supplies liable
for reverse charge
3.1(d)
4(A)(3)
354.00 0.00 0.00 110.00
These
supplies
shall be
declared
in Table
3.1(d) of
FORM
GSTR-
3B for
payment
of tax.
Net input
tax credit
may be
availed
under
Table
4A(3) of
FORM
GSTR-
3B on
payment
of tax.
Deta
ils
B2B – Invoices

90.00 0.00 0.00 10.00
B2B - Debit notes
300.00 0.00 0.00
100.0
0
B2B - Invoices -36.00 0.00 0.00 0.00
Agenda for 53rd GSTCM Volume 1
Page 264 of 477
S.no. Heading
GSTR-
3B table
Integrated
Tax (₹)
Central
Tax (₹)
State/
UT
tax (₹)
Cess
(₹) Advisory
(Amendment)
B2B - Debit notes
(Amendment) 0.00 0.00 0.00 0.00
IV Import of Goods 4(A)(1) 0.00 0.00 0.00 0.00
Net input
tax credit
may be
availed
under
Table
4(A)(1)
of FORM
GSTR-
3B.

Deta
ils
IMPG - Import of goods
from overseas

0.00 0.00 0.00 0.00

IMPG (Amendment) 0.00 0.00 0.00 0.00
IMGSEZ - Import of
goods from SEZ 0.00 0.00 0.00 0.00
IMGSEZ (Amendment) 0.00 0.00 0.00 0.00
Part
B
ITC Available – Credit Notes should be net-off against relevant available
headings in GSTR-3B

I Others 4(A) 86.00 0.00 0.00 15.00
Credit
Notes
shall be
net-off
against
relevant
ITC
available
tables
[Table
4A(3,4,5)
].
Liability
against
Credit
Notes
(Reverse
Charge)
shall be
net-off in
Table
3.1(d).
Deta
ils
B2B - Credit notes 4(A)(5) 56.00 0.00 0.00 10.00

B2B - Credit notes
(Amendment)
4(A)(5)
0.00 0.00 0.00 0.00
B2B - Credit notes
(Reverse charge)
3.1(d)
4(A)(3) 60.00 0.00 0.00 5.00
Agenda for 53rd GSTCM Volume 1
Page 265 of 477
S.no. Heading
GSTR-
3B table
Integrated
Tax (₹)
Central
Tax (₹)
State/
UT
tax (₹)
Cess
(₹) Advisory
B2B - Credit notes
(Reverse charge)
(Amendment)
3.1(d)
4(A)(3)
-30.00 0.00 0.00 0.00
ISD - Credit notes 4(A)(4) 0.00 0.00 0.00 0.00
ISD - Credit notes
(Amendment)
4(A)(4)
0.00 0.00 0.00 0.00

4. ITC Not Available Summary
(Amount in ₹ in all sections)

S.n
o.
Heading
GST
R-3B
Tabl
e
Integ
rated
Tax
(₹)
Centr
al Tax
(₹)
State
/UT
tax
(₹)
Cess
(₹) Advisory
Credit which may not be availed under FORM GSTR-3B
Par
t A
ITC Not Available
I
All other ITC -
Supplies from
registered persons
other than reverse
charge
4(D)(
2)
0.00 12.00
12.0
0
24.00

Such credit shall not be
taken and has to be
reported in table 4(D)(2)
of FORM GSTR-3B.
Det
ails
B2B – Invoices



0.00 12.00
12.0
0
24.0
0

B2B - Debit notes 0.00 0.00 0.00 0.00
ECO – Documents 0.00 0.00 0.00 0.00
B2B - Invoices
(Amendment) 0.00 0.00 0.00 0.00
B2B - Debit notes
(Amendment) 0.00 0.00 0.00 0.00

ECO - Documents
(Amendment) 0.00 0.00 0.00 0.00
II
Inward Supplies from
ISD
4(D)(
2)
0.00 0.00 0.00 0.00
Such credit shall not be
taken and has to be
reported in table 4(D)(2)
of FORM GSTR-3B
Det
ails
ISD – Invoices

0.00 0.00 0.00 0.00
ISD - Invoices
(Amendment) 0.00 0.00 0.00 0.00
III
Inward Supplies liable
for reverse charge
3.1(d
)
4(D)(
2)
0.00 12.00
12.0
0
12.0
0
These supplies shall be
declared in Table 3.1(d)
of FORM GSTR-3B for
payment of tax.
Det B2B – Invoices 0.00 12.00 12.0 12.0
Agenda for 53rd GSTCM Volume 1
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S.n
o.
Heading
GST
R-3B
Tabl
e
Integ
rated
Tax
(₹)
Centr
al Tax
(₹)
State
/UT
tax
(₹)
Cess
(₹) Advisory
ails

0 0
B2B - Debit notes 0.00 0.00 0.00 0.00
B2B - Invoices
(Amendment) 0.00 0.00 0.00 0.00
B2B - Debit notes
(Amendment) 0.00 0.00 0.00 0.00
Par
t B
ITC Not Available – Credit notes should be net-off against relevant ITC
available headings in GSTR-3B

I Others 4(A) 0.00 24.00
24.0
0
24.0
0
Credit Notes should be
net-off against relevant
ITC available tables
[Table 4A(3,4,5)].

Det
ails
B2B - Credit notes
4(A)(
5) 0.00 0.00 0.00 0.00

B2B - Credit notes
(Amendment)
4(A)(
5) 0.00 0.00 0.00 0.00
B2B - Credit notes
(Reverse charge)
4(A)(
3) 0.00 0.00 0.00 0.00
B2B - Credit notes
(Reverse charge)
(Amendment)
4(A)(
3)
0.00 0.00 0.00 0.00
ISD - Credit notes
4(A)(
4) 0.00 0.00 0.00 0.00
ISD - Credit notes
(Amendment)
4(A)(
4) 0.00 0.00 0.00 0.00

5. ITC Reversal Summary (Rule 37A)
(Amount in ₹ in all sections)

S.n
o.
Heading
GST
R-3B
Tabl
e
Integ
rated
Tax
(₹)
Centr
al Tax
(₹)
State
/UT
tax
(₹)
Cess
(₹) Advisory
Credit which may be reversed under FORM GSTR-3B
Par
t A
ITC Reversed -
Others

I
ITC Reversal on
account of Rule 37A
4(B)(
2)
0.00 0.00 0.00 0.00
Such credit shall be
reversed and has to be
reported in table 4(B)(2)
of FORM GSTR-3B.
Det
ails
B2B – Invoices

0.00 12.00
12.0
0
24.0
0

Agenda for 53rd GSTCM Volume 1
Page 267 of 477
S.n
o.
Heading
GST
R-3B
Tabl
e
Integ
rated
Tax
(₹)
Centr
al Tax
(₹)
State
/UT
tax
(₹)
Cess
(₹) Advisory
B2B - Debit notes 0.00 0.00 0.00 0.00

B2B - Invoices
(Amendment)
0.00 0.00 0.00 0.00

B2B - Debit notes
(Amendment)
0.00 0.00 0.00 0.00

Instructions:
1. Terms Used :-
a. ITC – Input tax credit
b. B2B – Business to Business
c. ISD – Input service distributor
d. IMPG – Import of goods
e. IMPGSEZ – Import of goods from SEZ
f. ECO – E-Commerce Operator

2. Important Advisory:
a) FORM GSTR-2B is a statement which has been generated on the basis of the information
furnished by your suppliers or by ECOs in their respective FORMS GSTR-1/IFF, 1A, 5
and 6. It is a static statement and will be made available once a month. The documents
filed by the Supplier in any FORMS GSTR-1/IFF, 5 and 6 would reflect in the next open
FORM GSTR-2B of the recipient irrespective of supplier’s date of filing. Taxpayers are
advised to refer FORM GSTR-2B for availing credit in FORM GSTR-3B. However, in
case of additional details, they may refer to their respective FORM GSTR-2A (which is
updated on near real time basis) for more details.
b) In addition, the supplies declared or amended in FORM GSTR-1A shall be made
available in the next open FORM GSTR-2B.
c) Input tax credit shall be indicated to be non-available in the following scenarios: -
i. Invoice or debit note for supply of goods or services or both where the
recipient is not entitled to input tax credit as per the provisions of sub-section
(4) of Section 16 of CGST Act, 2017.
ii. Invoice or debit note where the Supplier (GSTIN) and place of supply are in
the same State while recipient is in another State.
However, there may be other scenarios for which input tax credit may not be available to the
taxpayers and the same has not been generated by the system. Taxpayers should self-assess
and reverse such credit in their FORM GSTR-3B.
3. It may be noted that FORM GSTR-2B will consist of all the GSTR-1/IFFs, 5s and 6s being
filed by your respective supplier or by ECOs. Generally, this date will be between filing date
of GSTR-1(Monthly/Quarterly)/IFF for previous month (M-1) to filing date of GSTR-
1(Monthly/Quarterly)/IFF for the current month (M). For example, GSTR-2B for the month
of February will consist of all the documents filed by suppliers in their GSTR-1/IFF, 5 and 6
from 00:00 hours on 12th February to 23:59 hours on 11th March. It may be noted that for

Agenda for 53rd GSTCM Volume 1
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import of goods, the data is being updated on real time basis, therefore, imports made in the
month (month for which GSTR-2B is being generated for) shall be made available. The dates
for which the relevant data has been extracted is available under the “View Advisory” tab on
the online portal.
4. It also contains information on imports of goods from the ICEGATE system including data on
imports from Special Economic Zones Units / Developers.
5. It may be noted that reverse charge credit on import of services is not part of this statement
and will be continued to be entered by taxpayers in Table 4(A)(2) of FORM GSTR-3B.
6. Table 3 captures the summary of ITC available as on the date of generation of GSTR-2B. It is
divided into following two parts:
A. Part A captures the summary of credit that may be availed in relevant tables of FORM
GSTR-3B.
B. Part B captures the summary of credit that shall be net-off from relevant table of FORM
GSTR-3B.
7. Table 4 captures the summary of ITC not available as on the date of generation of GSTR-2B.
Credit available in this table shall not be availed as credit in FORM GSTR-3B but to be
reported as ineligible ITC in Table 4(D)(2) of FORM GSTR-3B. However, the liability to pay
tax on reverse charge basis and the liability to net-off credit on receipt of credit notes
continues for such supplies.
7A.Table 5 captures the summary of ITC to be reversed under Rule 37A on or before 30th
November following the end of financial year in which the ITC in respect of such invoice or
debit note has been availed and corresponding FORM GSTR-3B has not been furnished by
the supplier. Credit auto populated in this table shall be reversed in FORM GSTR-3B but
should be reported as ITC reversed in Table 4(B)(2) of FORM GSTR-3B. Table 5 shall be
made available only in FORM GSTR 2B of the September of the next financial year (made
available in October).
8. Taxpayers are advised to ensure that the data generated in FORM GSTR-2B is reconciled
with their own records and books of accounts. Taxpayers shall ensure that
a. No credit shall be taken twice for any document under any circumstances.
b. Credit shall be reversed wherever necessary.
c. Tax on reverse charge basis shall be paid in cash.
9. Details of invoices, credit notes, debit notes, ISD invoices, ISD credit and debit notes, bill of
entries etc. will also be made available online and through download facility.
10. There may be scenarios where a percentage of the applicable rate of tax rate may be notified
by the Government. A separate column will be provided for invoices / documents where such
rate is applicable.
11. Table wise instructions:
Table No. and
Heading
Instructions
ITC Available Summary
Table 3 Part A Section I
All other ITC -
Supplies from
registered persons other
than reverse charge
i. This section consists of the details of supplies (other
than those on which tax is to be paid on reverse charge
basis), which have been declared and filed by your
suppliers or by ECOs in their FORM GSTR-1/IFF,
GSTR-1A and GSTR- 5.
ii. This table displays only the supplies on which input tax
credit is available.
Agenda for 53rd GSTCM Volume 1
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iii. Negative credit, if any may arise due to amendment in
B2B - Invoices and B2B - Debit notes. Such credit shall
be net-off in Table 4A(5) of FORM GSTR-3B.
Table 3 Part A Section
II
Inward Supplies from
ISD
i. This section consists of the details of supplies, which
have been declared and filed by an input service
distributor in their FORM GSTR-6.
ii. This table displays only the supplies on which ITC is
available.
iii. Negative credit, if any, may arise due to amendment in
ISD Amendments – Invoices. Such credit shall be net-
off in table 4A(4) of FORM GSTR-3B.
Table 3 Part A Section
III
Inward Supplies liable
for reverse charge
i. This section consists of the details of supplies on which
tax is to be paid on reverse charge basis, which have
been declared and filed by your suppliers in their FORM
GSTR-1/IFF and GSTR-1A.
ii. This table provides only the supplies on which ITC is
available.
iii. These supplies shall be declared in Table 3.1(d) of
FORM GSTR-3B for payment of tax. Credit may be
availed under Table 4(A)(3) of FORM GSTR-3B on
payment of tax.
iv. Negative credit, if any, may arise due to amendment in
B2B - Invoices (Reverse Charge) and B2B - Debit notes
(Reverse Charge). Such credit shall be net-off in Table
4(A)(3) of FORM GSTR-3B.
Table 3 Part A Section
IV
Import of Goods
i. This section provides the details of IGST paid by you on
import of goods from overseas and SEZ units /
developers on bill of entry and amendment thereof.
These details are updated on near real time basis from
the ICEGATE system.
ii. This table shall consist of data on the imports made by
you (GSTIN) in the month for which GSTR-2B is being
generated for.
iii. The ICEGATE reference date is the date from which the
recipient is eligible to take input tax credit.
iv. The table also provides if the Bill of entry was amended.
v. Information is provided in the tables based on data
received from ICEGATE. Information on certain
imports such as courier imports may not be available.
Table 3 Part B Section I
Others
i. This section consists of the details of credit notes
received and amendment thereof which have been
declared and filed by your suppliers in their FORM
GSTR-1/IFF, GSTR-1A and GSTR-5.
ii. These credit notes shall be net-off from relevant ITC
available Tables [Table 4A(3,4,5)] of FORM GSTR-3B.
Liability against Credit Notes (Reverse Charge) shall be
net-off in Table 3.1(d) of FORM GSTR-3B.
ITC Not Available Summary
Agenda for 53rd GSTCM Volume 1
Page 270 of 477

Table 4 Part A Section I
All other ITC -
Supplies from
registered persons other
than reverse charge
i. This section consists of the details of supplies (other
than those on which tax is to be paid on reverse charge
basis), which have been declared and filed by your
suppliers or by ECOs in their FORM GSTR-1/IFF,
GSTR-1A and GSTR-5.
ii. This table provides only the supplies on which ITC is
not available.
iii. Such credit shall not be taken in FORM GSTR-3B.
However, such credit shall be reported as ineligible ITC
in Table 4D(2) of FORM GSTR-3B.
Table 4 Part A Section
II
Inward Supplies from
ISD
i. This section consists of details of the supplies, which
have been declared and filed by an input service
distributor in their FORM GSTR-6.
ii. This table provides only the supplies on which ITC is
not available.
iii. Such credit shall not be taken in FORM GSTR-3B.
However, such credit shall be reported as ineligible ITC
in Table 4D(2) of FORM GSTR-3B.
Table 4 Part A Section
III
Inward Supplies liable
for reverse charge
i. This section consists of the details of supplies liable for
reverse charge, which have been declared and filed by
your suppliers in their FORM GSTR-1/IFF and GSTR-
1A.
ii. This table provides only the supplies on which ITC is
not available.
iii. These supplies shall be declared in Table 3.1(d) of
FORM GSTR-3B for payment of tax. However, credit
will not be available on such supplies.
iv. Such credit shall be reported as ineligible ITC in Table
4D(2) of FORM GSTR-3B.
Table 4 Part B Section I
Others
i. This section consists details of the credit notes received
and amendment thereof which have been declared and
filed by your suppliers in their FORM GSTR-1/IFF,
GSTR-1A and GSTR-5.
ii. This table provides only the credit notes on which ITC is
not available.
iii. Such credit notes shall be net-off from relevant ITC
available tables [Table 4A(3,4,5)] of FORM GSTR-3B.
Table 5 Part A Section I
ITC Reversal on
account of Rule 37A
i. This table shall be made available only in FORM GSTR
2B of the September (made available in October).
ii. The table shall contain details of Input Tax Credit
required to be reversed in respect of invoices or debit
notes of previous financial year as per Rule 37A.
iii. Credit auto populated in this table shall be reversed in
FORM GSTR-3B and is to be reported in Table 4(B)(2)
of FORM GSTR-3B.

1. Form GSTR 4A:-In the description of the form, following amendment is required: -
Agenda for 53rd GSTCM Volume 1
Page 271 of 477
‘Auto-drafted details for registered person opting for composition levy
(Auto-drafted from GSTR-1, GSTR-1A, GSTR-5 and GSTR-7)’
2. Form GSTR 6A:-In the description of the form, following amendment is required: -
‘Auto-drafted details for registered person opting for composition levy
(Auto-drafted from GSTR-1, GSTR-1A, GSTR-5 and GSTR-7)’
3. FORM GSTR –8:-In Instructions, at Sr. No 7,column 2, following amendment is required:-
‘Matching of Details with supplier’s GSTR-1 or GSTR-1A will be at the level of GSTIN of supplier.’
4. FORM GSTR –9
In Instructions , following amendments are required to be made:-

Table
No.
Instructions
4A Aggregate value of supplies made to consumers and unregistered persons on which tax
has been paid shall be declared here. These will include details of supplies made through
E-Commerce operators and are to be declared as net of credit notes or debit notes issued
in this regard. Table 5, Table 7 along with respective amendments in Table 9 and Table
10 of FORM GSTR-1 as amended by FORM GSTR-1A, if any may be used for
filling up these details.
4B Aggregate value of supplies made to registered persons (including supplies made to
UINs) on which tax has been paid shall be declared here. These will include supplies
made through E- Commerce operators but shall not include supplies on which tax is to
be paid by the recipient on reverse charge basis. Details of debit and credit notes are to
be mentioned separately. Table 4A and Table 4C of FORM GSTR-1 as amended by
FORM GSTR-1A, if any may be used for filling up these details.
4C Aggregate value of exports (except supplies to SEZs) on which tax has been paid shall
be declared here. Table 6A of FORM GSTR-1 as amended by FORM GSTR-1A, if
any may be used for filling up these details.
4D Aggregate value of supplies to SEZs on which tax has been paid shall be declared here.
Table 6B of GSTR-1 as amended by FORM GSTR-1A, if any may be used for filling
up these details.
4E Aggregate value of supplies in the nature of deemed exports on which tax has been paid
shall be declared here. Table 6C of FORM GSTR-1 as amended by FORM GSTR-
1A, if any may be used for filling up these details.
4F Details of all unadjusted advances i.e. advance has been received and tax has been paid
but invoice has not been issued in the current year shall be declared here. Table 11A of
FORM GSTR-1 as amended by FORM GSTR-1A, if any may be used for filling up
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these details.
4G Aggregate value of all inward supplies (including advances and net of credit and debit
notes) on which tax is to be paid by the recipient (i.e.by the person filing the annual
return) on reverse charge basis. This shall include supplies received from registered
persons, unregistered persons on which tax is levied on reverse charge basis. This shall
also include aggregate value of all import of services. Table 3.1(d) of FORM GSTR-3B
may be used for filling up these details.
4I Aggregate value of credit notes issued in respect of B to B supplies (4B), exports (4C),
supplies to SEZs (4D) and deemed exports (4E) shall be declared here. Table 9B of
FORM GSTR-1 as amended by FORM GSTR-1A, if any may be used for filling up
these details. For FY 2017-18, 2018-19 , 2019-20 and 2020- 21, the registered person
shall have an option to fill Table 4B to Table 4E net of credit notes in case there is any
difficulty in reporting such details separately in this table.
4J Aggregate value of debit notes issued in respect of B to B supplies (4B), exports (4C),
supplies to SEZs (4D) and deemed exports (4E) shall be declared here. Table 9B of
FORM GSTR-1 as amended by FORM GSTR-1A, if any may be used for filling up
these details. For FY 2017-18, 2018-19 , 2019-20 and 2020- 21, the registered person
shall have an option to fill Table 4B to Table 4E net of debit notes in case there is any
difficulty in reporting such details separately in this Table.
4K &
4L
Details of amendments made to B to B supplies (4B), exports (4C), supplies to SEZs
(4D) and deemed exports (4E), credit notes (4I), debit notes (4J) and refund vouchers
shall be declared here. Table 9A and Table 9C of FORM GSTR-1 as amended by
FORM GSTR-1A, if any may be used for filling up these details. For FY 2017-18,
2018-19 , 2019-20 and 2020-21, the registered person shall have an option to fill Table
4B to Table 4E net of amendments in case there is any difficulty in reporting such
details separately in this table.
5A Aggregate value of exports (except supplies to SEZs) on which tax has not been paid
shall be declared here. Table 6A of FORM GSTR-1 as amended by FORM GSTR-1A,
if any may be used for filling up these details.
5B Aggregate value of supplies to SEZs on which tax has not been paid shall be declared
here. Table 6B of GSTR-1 as amended by FORM GSTR-1A, if any may be used for
filling up these details.
5C Aggregate value of supplies made to registered persons on which tax is payable by the
recipient on reverse charge basis. Details of debit and credit notes are to be mentioned
separately. Table 4B of FORM GSTR-1 as amended by FORM GSTR-1A, if any may
be used for filling up these details.
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5D, 5E
and
5F
Aggregate value of exempted, Nil Rated and Non-GST supplies shall be declared here.
Table 8 of FORM GSTR-1 as amended by FORM GSTR-1A, if any may be used for
filling up these details. The value of “no supply” shall be declared under Non-GST
supply (5F). For FY 2017-18, 2018-19 , 2019-20 and 2020- 21]], the registered person
shall have an option to either separately report his supplies as exempted, nil rated and
Non-GST supply or report consolidated information for all these three heads in the
“exempted” row only.] For FY 2021-22, the registered person shall report Non- GST
supply (5F) separately and shall have an option to either separately report his supplies as
exempted and nil rated supply or report consolidated information for these two heads in
the “exempted” row only.

For FY 2022-23, the registered person shall report Non-GST supply (5F) separately and
shall have an option to either separately report his supplies as exempted and nil rated
supply or report consolidated information for these two heads in the “exempted” row
only.]
5H Aggregate value of credit notes issued in respect of supplies declared in 5A, 5B, 5C, 5D,
5E and 5F shall be declared here. Table 9B of FORM GSTR-1 as amended by FORM
GSTR-1A, if any may be used for filling up these details. For FY 2017-18, 2018-
19,2019-20, 2020-21, 2021-22 and 2022-23, the registered
person shall have an option to fill Table 5A to Table 5F net of credit notes in case there
is any difficulty in reporting such details separately in this Table.
5I Aggregate value of debit notes issued in respect of supplies declared in 5A, 5B, 5C, 5D,
5E and 5F shall be declared here. Table 9B of FORM GSTR-1 as amended by FORM
GSTR-1A, if any may be used for filling up these details. For FY 2017-18, 2018-19
2019-20, 2020-21, 2021-22 and 2022-23, the registered
person shall have an option to fill Table 5A to Table 5F net of debit notes in case there
is any difficulty in reporting such details separately in this Table.
5J &
5K
Details of amendments made to exports (except supplies to SEZs) and supplies to SEZs
on which tax has not been paid shall be declared here. Table 9A and Table 9C of FORM
GSTR-1 as amended by FORM GSTR-1A, if any may be used for filling up these
details. For FY 2017-18, 2018-19 2019-20, 2020-21, 2021-22 and 2022-23, the
registered person shall have an option to fill Table 5A to Table 5F net of amendments in
case there is any difficulty in reporting such details separately in this Table.
.......

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17 &
18
Summary of supplies effected and received against a particular HSN code to be reported
only in this table. It will be optional for taxpayers having annual turnover upto Rs.1.50
Cr. It will be mandatory to report HSN code at two digits level for taxpayers having
annual turnover in the preceding year above Rs.1.50 Cr but upto Rs.5.00 Cr and at four
digits ‘level for taxpayers having annual turnover above Rs.5.00 Cr. From FY 2021-22
onwards, it shall be mandatory to report HSN code at six digits level for taxpayers
having annual turnover in the preceding year above Rs. 5.00 Cr and at four digits level
for all B2B supplies for taxpayers having annual turnover in the preceding year upto Rs.
5.00 Cr.] UQC details to be furnished only for supply of goods. Quantity is to be
reported net of returns. Table 12 of FORM GSTR-1 as amended by FORM GSTR-
1A, if any may be used for filling up details in Table 17. It may be noted that this
summary details are required to be declared only for those inward supplies which in
value independently account for 10 % or more of the total value of inward supplies. For
FY 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall have an option
to not fill this table.For FY 2021-22 and 2022- 23, the registered person shall have an
option to not fill Table 18.


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Agenda Item 3(x): Issue of liability of payment of interest under Section 50 of CGST Act in case
of delayed payment of tax, even though the credit is available in Electronic Cash Ledger (ECL).
References have been received regarding liability to pay interest under section 50 of CGST
Act, 2017 in cases wherein though balance is available in the Electronic Cash Ledger of the taxpayer
but return in FORM GSTR 3B could not be filed by the taxpayer by the due date of filing the return
due to various reasons. In such cases, the taxpayers’ liability to pay interest under section 50 of the
CGST Act 2017 arises on delayed filing of such return in FORM GSTR-3B as the tax is considered to
be paid only on filing such returns and debit of tax due from the Electronic Cash Ledger/Electronic
Credit Ledger.
2. Statutory Provisions
2.1 Section 39 of CGST Act, 2017 provides for the furnishing of returns.-
“39. Furnishing of returns.
(1) …
(2) ….
(7) Every registered person who is required to furnish a return under sub-section (1), other
than the person referred to in the proviso thereto, or sub-section (3) or sub-section (5),
shall pay to the Government the tax due as per such return not later than the last date on
which he is required to furnish such return:
Provided that every registered person furnishing return under the proviso to sub-section
(1) shall pay to the Government, in such form and manner, and within such time, as may
be prescribed,––
……….
…………
Provided that the Government may, on the recommendations of the Council, by
notification, subject to such conditions and restrictions as may be specified therein, allow
a registered person or a class of registered persons to furnish the return for a tax period,
even after the expiry of the said period of three years from the due date of furnishing the
said return.”
2.2 Section 49 of the CGST Act provides for payment of tax, interest, penalty, etc., which reads
as under:
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“49. Payment of tax, interest, penalty and other amounts.-
(1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by
internet banking or by using credit or debit cards or National Electronic Fund Transfer or
Real Time Gross Settlement or by such other mode and subject to such conditions and
restrictions as may be prescribed, shall be credited to the electronic cash ledger of such
person to be maintained in such manner as may be prescribed.
(2) The input tax credit as self-assessed in the return of a registered person shall be credited
to his electronic credit ledger, in accordance with section 41, to be maintained in such
manner as may be prescribed.
(3) The amount available in the electronic cash ledger may be used for making any payment
towards tax, interest, penalty, fees or any other amount payable under the provisions of this
Act or the rules made thereunder in such manner and subject to such conditions and within
such time as may be prescribed.
..
(11) Where any amount has been transferred to the electronic cash ledger under this Act, the
same shall be deemed to be deposited in the said ledger as provided in subsection (1)
2.3 Section 50 of the CGST Act, 2017 provides for the payment of Interest on delayed payment
of tax
50. Interest on delayed payment of tax.
(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the
rules made thereunder, but fails to pay the tax or any part thereof to the Government within
the period prescribed, shall for the period for which the tax or any part thereof remains
unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be
notified by the Government on the recommendations of the Council:
Provided that the interest on tax payable in respect of supplies made during a tax period and
declared in the return for the said period furnished after the due date in accordance with the
provisions of Section 39, except where such return is furnished after commencement of any
proceedings under Section 73 or Section 74 in respect of the said period, shall be levied on
that portion of the tax that is paid by debiting the electronic cash ledger.
(2) The interest under sub-section (1) shall be calculated, in such manner as may be
prescribed, from the day succeeding the day on which such tax was due to be paid.
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………
………
2.4 Rule 61 Form and Manner of furnishing return
(2) Every registered person required to furnish return, under sub-rule (1) shall, subject to the
provisions of section 49, discharge his liability towards tax, interest, penalty, fees or any other
amount payable under the Act or the provisions of this Chapter by debiting the electronic cash ledger
or electronic credit ledger and include the details in the return in FORM GSTR-3B.
2.5 Rule 88B of the CGST Rules, 2017 provides for the
Manner of calculating interest on delayed payment of tax
“88B. Manner of calculating interest on delayed payment of tax.
(1) In case, where the supplies made during a tax period are declared by the registered
person in the return for the said period and the said return is furnished after the due date in
accordance with the provisions of the Section 39,
except where such return is furnished after commencement of any proceedings under section
73 or section 74 in respect of the said period, the interest on tax payable in respect of such
supplies shall be calculated on the portion of tax which
is paid by debiting the electronic cash ledger, for the period of delay in filing the said
return beyond the due date, at such rate as may be notified under sub-section (1) of section
50.
(2)In all other cases, where interest is payable in accordance with sub section (1) of section
50, the interest shall be calculated on the amount of tax which remains unpaid, for the period
starting from the date on which such tax was due to be paid till the date such tax is paid, at
such rate as may be notified under sub-section (1) of section 50.
…….. ..
………”
3. Analysis
3.1 The issue has been examined and it has been observed that there may be instances in which a
taxpayer has deposited the amount in Electronic Cash Ledger by due date of filing return but is unable
to file FORM GSTR 3B return by due date due to various reasons.
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3.2 In this regard, section 50(1) of CGST Act provides that when a person, liable to pay tax under
the Act fails to pay the said tax to the Government within the prescribed period, then he shall be liable
to pay interest on such amount for the period of delay of payment of tax. Further, proviso to section
50 provides that when a return for a tax period is filed after the due date in accordance with provisions
of section 39 of the CGST Act, then interest shall be payable on the portion on tax which is paid in the
return by debiting the Electronic Cash Ledger.
3.3 As per section 49(3) of the CGST Act, the amount available in Electronic Cash Ledger can be
used for making any payment towards tax, interest, penalty, fee, or any other amount payable under
the provisions of the CGST Act and the rules made there under. Further, as per section 49(11) of the
CGST Act, any amount transferred to Electronic Cash Ledger under CGST Act shall be deemed to be
deposited in the said ledger.
3.4 As per rule 61 (2) of the CGST Rules, a registered person, required to furnish return under
section 39 of the CGST Act, is required to discharge his liability towards tax, interest, penalty, fee, or
any other amount payable under CGST Act/ CGST Rules by debiting the Electronic Cash Ledger or
Electronic Credit Ledger and the details of such payment are required to be mentioned in GSTR 3B
return.
3.5 Therefore, it is clear from above that as per the existing provisions of the CGST Act and
CGST Rules, where any return is filed beyond the due date and the tax payable through such return is
debited from Electronic Cash Ledger/ Electronic Credit Ledger and mentioned in the said return,
liability to pay interest under section 50 of CGST Act arises on such amount debited through
Electronic Cash Ledger for the period of delay in filing of GSTR-3B return. Any deposit in the
Electronic Cash Ledger prior to the due date of filing of GSTR 3B return does not amount to
discharge of tax liability on the part of the registered person and therefore, the same is not deducted
from the amount debited from Electronic Cash Ledger for the purpose of calculating interest under
section 50 of CGST Act on such delayed filing of the return.
3.6 It is mentioned that Rule 87 of the CGST Rules mandates that any amount towards tax,
interest, penalty, fee, or any other amount payable under the provisions of the CGST Act can be
deposited by the taxpayer through a challan in FORM GST PMT-06 and such deposits can be made
through any of the modes provided in Rule 87 of the CGST Rules. Upon successful credit of the
amount to the concerned Government account in the authorized bank, a Challan Identification
Number (CIN) is generated by the collecting bank and the same is indicated in the challan. On receipt
of the Challan Identification Number from the collecting bank, the said amount is credited to the
Electronic Cash Ledger of the taxpayer. Besides as per Rule 87(9) of CGST Rules, any amount
deducted under section 51of CGST Act or collected under section 52 of CGST Act and claimed by the
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said taxpayer from whom the said amount has been deducted or the case may be collected, shall be
credited to his Electronic Cash Ledger.
3.7 It is crucial to note that the CIN is generated by authorized banks only upon actual receipt of
payment and credit of the same to the concerned Government account maintained in the said
authorized bank. This payment is then recorded as a credit balance in the taxpayer's electronic cash
ledger. Similarly, the amount deducted under section 51 or collected under section 52 of the CGST
Act is also credited in the Electronic Cash Ledger of the taxpayer from whom the said amount has
been deducted or collected, only after the concerned return in FORM GSTR 7 or FORM GSTR 8, as
the case may be, has been filed by the concerned deductor or the electronic commerce operator and
the said amount has been paid to the Government. In both the situations, the amount which is credited
in Electronic Cash Ledger of a taxpayer, has already come into the Government account irrespective
of whether the same has been debited through the said ledger or not.
3.8 Since the amount deposited in the electronic cash ledger of a taxpayer has already come into
account of the Government, demanding interest on such amount in respect of delayed filing of returns,
on the grounds that the said amount has been debited along with return only, does not appear to be fair
and amounts to levying interest from the taxpayer on an amount which is already credited with the
Government account. Therefore, it is proposed that for the purpose of levying interest under section
50 of the CGST Act, 2017 in respect of delayed filing of return, we may not include any amount
which is already credited in the Electronic Cash Ledger on the due date of filing of the said return and
which is subsequently debited from the said ledger along with the return while calculating such
interest under section 50 of the CGST Act.
4. Therefore, it is proposed that rule 88B of CGST Rules, 2017 which provides for the manner
for calculation of interest on delayed payment of tax, may be amended by inserting a proviso to the
sub-rule (1) of rule 88B of CGST Rules, 2017 as below:
“Provided that where any amount has been credited in the Electronic Cash Ledger as per
provisions of sub-section (1) of section 49 on or before the due date of filing the said return, but is
debited from the said ledger for payment of tax while filing the said return after the due date, the said
amount shall not be taken into consideration while calculating such interest if the said amount is lying
in the said ledger from the due date till the date of its debit at the time of filing return.”
5. Accordingly, the agenda is placed before the GST Council for approval.



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Agenda Item 3(xi) : Reduction in rate of TCS to be collected by the ECOs for supplies being
made through them.
The Electronic Commerce Operator (ECO), who is required to collect tax at source (TCS) as
per section 52 (1) of CGST Act read with Notification No. 52/2018-Central Tax dated 20.09.2018 and
Notification No. 02/2018-Integrated Tax dated 20.09.2024, collects the TCS amount calculated at a
rate of 1% (0.5 % for CGST + 0.5% for SGST/ UTGST, or 1% of IGST) of the net value of
taxable supplies made through it by other suppliers, where the consideration with respect to such
supplies is to be collected by the ECO.
2. The TCS amount, so collected by ECO from the supplier, and paid to the Government through
FORM GSTR-8 return, gets reflected in Electronic Cash Ledger of the said supplier. The said
amount can then be used by such supplier for making payment of taxes, penalty, interest etc. The said
supplier can also claim refund under section 54(1) of CGST Act, 2017 of any amounts lying
unutilized in Electronic Cash Ledger, after paying his due tax liability.
3. Representations have been received stating that in a large number of cases, the said suppliers
are not able to utilize the TCS amount credited in their Electronic Cash Ledger for the purpose of
payment of due tax liability and have to claim refund of such unutilized cash from the tax authorities.
It has been mentioned that a lot of difficulty is being faced in getting refunds of such unutilized cash
on account of delay in processing of such refunds as well as multiple queries being raised and notices
being issued for denial of such refunds on various grounds, such as tax liability being paid mostly
through ITC, not having traditional set up for PPoB, PPoB not being commensurate to size of the
business, etc. Denial and/ or delay of refunds causes huge working capital constrains to such
suppliers.

3.1 Accordingly, request has been made to reduce TCS rate to be deducted by the ECO from
existing 1% to 0.1% for mitigating the difficulties so that requirement of refund, if any, by the
suppliers get reduced as far as possible, besides reducing financial constraints on them due to working
capital blockage, while keeping tracking mechanism intact.


4. Relevant Legal provisions:
Section 52 of CGST Act reads as under:
(1) Notwithstanding anything to the contrary contained in this Act, every electronic
commerce operator (hereafter in this section referred to as the "operator"), not being
an agent, shall collect an amount calculated at such rate not exceeding one per cent.,
as may be notified by the Government on the recommendations of the Council, of the
net value of taxable supplies made through it by other suppliers where the
consideration with respect to such supplies is to be collected by the operator.
Explanation .-For the purposes of this sub-section, the expression "net value of
taxable supplies" shall mean the aggregate value of taxable supplies of goods or
services or both, other than services notified under sub-section (5) of section 9, made
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during any month by all registered persons through the operator reduced by the
aggregate value of taxable supplies returned to the suppliers during the said month.
(2) …...
(3) …..
(4) …..

5. In this regard, data in respect of TCS collected and paid to the Government by ECOs under
section 52 of CGST Act and the refunds of the excess balance of cash in Electronic Cash Ledger
sought by the suppliers of ECOs for the financial year 2023-24 has been obtained from GSTN which
is as follows:
Data on ECOs regarding TCS for Financial Year 2023-24
Number of e-
Commerce
operators who
pay TCS to
Government

Amount of
TCS paid
to
Governmen
t by (i)
(Rs. Cr.)

Number of
taxpayers who
make supplies
through ECOs
(who are liable
for TCS u/s 52)

Out of
(iii),number of
taxpayers who
applied for refund
of excess balance
in cash ledger
Amount of
refund
sanctioned in
respect of (iv)
(Rs. Cr.)
Percentage of
refund
sanctioned in
(v) vis- à-vis
TCS paid in
(ii)
(i) (ii) (iii) (iv) (v) (vi)
6281 3,970.58 7,19,294 25,769 1,983.06 49.94%
i. From the above, it is observed that tax collected at source by ECOs from approximately 7.19
lakhs taxpayers, who make supplies through ECOs, was Rs. 3970.58 Crore during FY 2023-24,
out of which 25,769 taxpayers applied for refund of excess balance in cash ledger during the
said period and the refund amount sanctioned is Rs. 1,983.06 Crore, which is around 50% of
the tax collected in the said period.
ii. Accordingly, as per the present rate of TCS, about 50% of the amount of TCS collected and paid
to the Government by ECOs, is being refunded to the suppliers of ECOs as excess balance in
Electronic Cash Ledger, due to inability of the said suppliers to utilize such cash credited in their
Electronic Cash Ledger.
iii. The requirement of refund of excess balance of cash in Electronic Cash Ledger on account of
TCS by the said suppliers is not only causing working capital constraints to the said suppliers,
but is also resulting in the increased workload of tax officers in processing the refund
applications being filed by sch suppliers.
5.1 The original legislative intent behind the provisions governing TCS under CGST Act, was
primarily to ensure tracking and adherence to transactional obligations facilitated by ECOs for large
number of smaller suppliers making supplies through ECOs (which are much smaller in number) and
to check whether such suppliers are paying their due tax liability or not. It was not intended to
withhold a significant portion of their working capital, which could hinder their operational
capabilities.
5.2 Therefore, considering this as a revenue neutral measure which is mainly used for keeping a
track of the transactions through ECOs who are registered under GST, and considering that as per the
present rate of TCS, about 50% of the TCS collected is required to be refunded to the suppliers, it may
be desirable to have a relook at the rate of TCS to be collected under section 52 of CGST Act, so as to
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promote the ease of doing business, to reduce compliance burden of the such taxpayers and also to
reduce the workload of the tax authorities in the field, while at the same time keeping the tracking and
monitoring mechanism intact. It is mentioned that any reduction in rate of TCS will have no impact
on the tax liability of the taxpayers who are making supply through ECOs and from whom such tax is
to be collected by ECOs under section 52 of CGST Act and thus, the revenue of the Government will
not be affected in any manner.
6. The Law Committee deliberated on the matter in its meeting held on 30.05.2024 and
recommended to reduce the TCS rate from present 1% (0.5% CGST + 0.5% SGST/ UTGST and 1%
IGST) to 0.5 % (0.25% CGST + 0.25% SGST/UTGST and 0.5% IGST) by issuing a notification for
amending notification No. 52/2018-Central tax dated 20.09.2018, Notification No. 02/2018-Integrated
Tax dated 20.09.2024, Notification No. 12/2018-Union Territory tax dated 28.09.2018 as below:

Notification No. 52/2018-Central tax dated 20.09.2018
“G.S.R. .....(E).—In exercise of the powers conferred by sub-section (1) of section 52 of the
Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the
recommendations of the Council, hereby notifies that every electronic commerce operator, not
being an agent, shall collect an amount calculated at a rate of half 0.25 per cent of the net
value of intra-State taxable supplies made through it by other suppliers where the consideration
with respect to such supplies is to be collected by the said operator.”

Notification No. 02/2018-Integrated Tax dated 20.09.2024
G.S.R. …..(E).— In exercise of the powers conferred by the second proviso to section 20 of the
Integrated Goods and Services Tax Act, 2017 (13 of 2017), read with sub-section (1) of section 52 of
the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the
recommendations of the Council, hereby notifies that every electronic commerce operator, not being
an agent, shall collect an amount calculated at a rate of one 0.5 per cent. of the net value of inter-
State taxable supplies made through it by other suppliers where consideration with respect to such
supplies is to be collected by the said operator.

Notification No. 12/2018-Union Territory Tax/GSR 940(E), DATED 28-9-2018

-“G.S.R. .....(E).—In exercise of the powers conferred by sub-section (1) of Section 22 read with
Section 21 of Union Territory Goods and Services Tax Act, 2017 (14 of 2017) and sub-section (1) of
Section 52 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on
the recommendations of the Council, hereby notifies that every electronic commerce operator, not
being an agent, shall collect an amount calculated at a rate of half 0.25 per cent. of the net value of
intra-Union Territory (without legislature) taxable supplies made through it by other suppliers where
the consideration with respect to such supplies is to be collected by the said operator.

7. Accordingly, the agenda on above lines is placed before GST Council for deliberation and
approval of the proposal.
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Agenda Item 3(xii): Clarifications on various issues pertaining to special procedure for the
manufacturers of the specified commodities, like pan masala, tobacco etc.
Based on the recommendation of the GST Council in its 50th meeting, Central Government
notified the special procedure vide Notification No. 30/2023-Central Tax dated 31.07.2023 to be
followed by the manufacturers of the goods mentioned in the Schedule to the said notification,
including pan masala, chewing tobacco, gutkha, etc. The said special procedure envisages the
monthly statement (SRM- IV) and various other details to be submitted by the concerned registered
taxpayer through online mode, for which various FORMs such as SRM –I, SRM-IA, SRM-II A,
SRM-IIB, SRM-III, etc need to be made available on the common portal.
2. Representations were received from various trade associations and industry representatives
requesting for postponement/ extension of time limit for implementation of said special procedure
notified vide Notification No 30/2023 Central Tax dated 31.07.2023, due to numerous difficulties
faced by the industry in implementation of the special procedure and also need for clarification about
various issues pertaining to the said special procedure.
3. The above mentioned difficulties and issues were deliberated by the GST Council in its 52nd
meeting. The Council recommended that the implementation of the said scheme may be deferred till
1st January 2024, since no functionality had been made available on the portal for the said special
procedure. Accordingly, as per recommendations of the Council, Notification No. 47/2023-CT dated
25.09.2023 was issued vide which the implementation of the said special procedure was deferred till
1st January, 2024.
4. Law Committee further deliberated on the various issues raised in the representations. The
Law Committee recommended in its meeting held on 08.11.2023 that to simplify the special
procedure, instead of asking the taxpayer to file information through a number of forms (such as
FORM SRM-I, SRM-IA, SRM-II, SRM-IIA, SRM-IIB, SRM-IIIA & SRM-IV in Notification No.
30/2023-CT dated 31st July, 2023), only two FORMs may be enough viz. one for registration and
disposal of the machines i.e. FORM SRM-I and the second for filing monthly details of inputs and
outputs i.e. FORM SRM-II. Besides, format for Chartered Engineer Certificate was also suggested as
per FORM SRM-III. The format of the said forms was also finalized by the Law Committee. The Law
Committee recommended that Notification No 30/2023 Central Tax dated 31.07.2023 may be
rescinded and a new notification may be issued for notifying the special procedure to be followed by
the manufacturers of the goods mentioned in the Schedule to the said notification, including pan
masala, chewing tobacco, gutkha, etc., to be implemented from a date, based on the readiness of the
portal.
5. The recommendations of the Law Committee were placed before the GST Implementation
Committee (GIC). GIC recommended for rescinding Notification No. 30/2023- Central Tax dated
31.07.2023 and for issuance of a new notification for notifying the special procedure to be followed
by the manufacturers of the goods mentioned in the Schedule to the said notification, including pan
masala, chewing tobacco, gutkha, etc., to be implemented from 01.04.2024. Accordingly, Notification
No. 03/2024-Central Tax dated 05.01.2024 was issued for rescinding Notification No. 30/2023-
Central Tax dated 31.07.2023. Also, Notification No. 04/2024-CT dated 05.01.2024 was issued for
notifying the special procedure to be followed by the manufacturers of the goods mentioned in the
Schedule to the said notification, including pan masala, chewing tobacco, gutkha, etc., to be
implemented from 01.04.2024. Further, GSTN informed that the functionality to implement the
various forms envisaged in Notification No. 04/2024-CT dated 05.01.2024 is still not ready and hence
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on the recommendation of GIC, the implementation of the said notification was deferred till
15.05.2024 by issuing Notification No. 08/2024-CT dated 10.04.2024.
6. The Law Committee in its meeting held on 08.11.2023 also felt that certain issues raised by
industry in representations need to be clarified through a Circular. The Law Committee recommended
issuance of a Circular for clarifying these issues. The draft Circular recommended by the Law
Committee is enclosed with this agenda note as Annexure A.
7. Accordingly, the proposal is placed before the GST Council for deliberation and approval.
****
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ANNEXURE-A
Circular No.-XXXXX
F. No. CBIC-20001/7/2023-GST-CBEC
Government of India
Ministry of Finance
Department of Revenue
*****
North Block, New Delhi
Dated the -- January, 2024
To,
All the Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioner of Central Tax
All the Principal Director Generals/ Director Generals

Madam/Sir,

Subject: Clarifications on various issues pertaining to special procedure for the manufacturers
of the specified commodities as per Notification No. 04/2024 - Central Tax dated 05.01.2024–
reg.
Based on the recommendation of 50th GST Council meeting, a special procedure was notified
vide Notification No. 30/2023-Central Tax dated 31.07.2023 to be followed by the registered persons
engaged in manufacturing of goods mentioned in the schedule to the said notification. The said
notification has been rescinded vide Notification No. 03/2024-Central Tax dated 05.01.2024 and a
revised special procedure has been notified vide Notification No. 04/2024- Central Tax dated
05.01.2024.

2. Representations have been received from various trade associations seeking clarity on some
issues pertaining to the said special procedure. To ensure uniformity in the implementation of the
provisions of law across the field formations, the Board, in exercise of its powers conferred by section
168 (1) of the Central Goods & Services Tax Act, 2017 (herein after referred to as the ‘CGST Act”),
hereby clarifies various issues as under:

S.No. Issued Raised by Trade Clarification on the issue
1. Non availability of make, model number and
machine number -
The trade bodies have raised the issue that
some of the manufacturers of the said goods
are using very old packing machines since
decades including second hand machines.
Therefore, the details of make, model
number and machine number of these
It is clarified that in Table 6 of FORM GST
SRM-I as notified vide Notification No.
04/2024-CT dated 05.01.2024, make and
model number are optional. However, where
make of the machine is not available, the
year of purchase of the machine may be
declared as the make number. It is also
clarified that the machine number is a
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machines are not readily available. mandatory field in Table 6 of FORM GST
SRM-I to be filled up by the manufacturer.
If the machine number is not available either
on the machine or as per the available
documents/ records, then the manufacturer
may assign any numeric number to the said
machine and provide the details of the same
in Table 6 of FORM GST SRM-I.
2. In cases where the electricity consumption
rating of the packing machine is not
available in the specifications of the said
machine or in the documents/record of the
same, then how to declare the electricity
consumption rating of the said machine in
Table 6 of FORM GST SRM-I?
It is clarified that electricity consumption
rating of the packing machine is to be
declared in Table 6 of FORM GST SRM-I
on the basis of details of the same as
available either on the machine or in the
documents/record of the said machine.
However, if the same is not available either
on the machine or in the documents/records,
then the manufacturer may get such
electricity consumption per hour of the said
machine calculated through a Chartered
Engineer and get the same certified by the
said Chartered Engineer in the format
prescribed in FORM GST SRM-III, as
notified vide Notification No. 04/2024-CT
dated 05.01.2024. The said electricity
consumption rating can be declared in Table
6 of FORM GST SRM-I accordingly. The
copy of such certificate of the Chartered
Engineer needs to be uploaded along with
FORM GST SRM-I. The details of the
documents so uploaded needs to be provided
in Table 10 of the said form. It is also
clarified that in cases where there are
certificates of Chartered Engineer for more
than one machine, then all such certificates
may be uploaded in a single PDF file.
3. Which value has to be reported in Column 8
of Table 9 of FORM GST SRM-II in case
of goods having no MRP, for example,
goods manufactured for export market?
In cases where there is no MRP of the
package, then the sale price of the goods so
manufactured shall be entered in Column 8
of Table 9 of FORM GST SRM-II as
notified vide Notification No. 04/2024-CT
dated 05.01.2024.
4. What should be the qualification and
eligibility of the Chartered Engineer for
providing Chartered Engineer certificate
under the special procedure notified vide
It is clarified that a Practicing Chartered
Engineer having a certificate of practice
from the Institute of Engineers India (IEI) is
qualified to provide Chartered Engineer
Agenda for 53rd GSTCM Volume 1
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Notification No. 04/2024-CT dated
05.01.2024?
certificate under the special procedure
notified vide Notification No. 04/2024-CT
dated 05.01.2024.
5. Whether the special procedure notified vide
Notification No. 04/2024-CT dated
05.01.2024 is applicable to the
manufacturing units located in Special
Economic Zone (SEZ)?
It is clarified that the special procedure as
notified vide Notification No. 04/2024-CT
dated 05.01.2024 is not applicable to the
manufacturing units located in Special
Economic Zone.
6. Whether the special procedure notified vide
Notification No. 04/2024-CT dated
05.01.2024 is applicable to the manual
processes using electric operated heat sealer
and seamer?
It is clarified that the said special procedure
notified vide Notification No. 04/2024-CT
dated 05.01.2024 is not applicable in respect
of manual seamer/ sealer being used for
packing operations. Further, it is also
clarified that the said special procedure is not
applicable in respect of manual packing
operations such as those in cases of post
harvest packing of tobacco leaves.

7. In cases where multiple machines are
required for filling, capping and packing of
containers, the serial number of which
machine is required to be declared in Table 6
of FORM GST SRM-I?
It is clarified that in a manufacturing process
there may be different machines being used
such as one for filling of packages, another
for putting seal on the packages and another
for final packing. The detail of that machine
is required to be reported in Table 6 of
FORM GST SRM-I which is being used for
final packing of the packages of the specified
goods.

8. In case of job work or contract
manufacturing, which person shall be
required to comply with the special
procedure as notified vide Notification No.
04/2024-CT dated 05.01.2024?
It is clarified that the special procedure
notified vide Notification No. 04/2024-CT
dated 05.01.2024 shall be applicable to all
persons involved in manufacturing process
including a job worker / contract
manufacturer. However, if the job worker/
contract manufacturer is unregistered, then
the liability to comply with the said special
procedure will be of the concerned principal
manufacturer.


3. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the
Board.
Sanjay Mangal
Pr. Commissioner (GST)
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Agenda Item 3(xiii): Clarification on the provisions of clause (ca) of Section 10(1) of the
Integrated Goods and Service Tax Act, 2017 relating to place of supply of goods to
unregistered persons.

Reference has been received from trade and industry seeking clarification regarding the place
of supply in terms of newly added clause (ca) of section 10(1) of the IGST Act, in case of supply of
goods made to an unregistered person where the billing address is different from the address of
delivery of goods, especially in the context of supply being made through e-commerce platforms.
2. Background:
Vide Notification 02/2023-Integrated Tax, dated September 29, 2023, the provisions of the
Integrated Goods and Services Tax (Amendment) Act, 2023 (31 of 2023) had come into force with
effect from 01.10.2023. Clause (ca) has been inserted in Section 10(1) of the Integrated Goods and
Services Tax Act, 2017 (hereinafter referred to as the “IGST Act”) with effect from 01.10.2023
It has been represented that in case of supply of goods made to an unregistered person where
the billing address is different from the address of delivery of goods, especially in the context of
supply being made through e-commerce platforms, applying the place of supply provisions of section
10(1)(a) of IGST Act, the place of supply of goods will be the State where movement of goods
terminates for delivery.
However, as the newly inserted clause (ca) of section 10(1) of IGST Act contains a non-
obstante clause overriding the provisions of clause (a) and clause (c) of section 10(1) of IGST Act,
doubts have been raised regarding the place of supply in such scenario by applying the newly inserted
provision of section 10(1)(ca) of IGST Act.
3. Relevant Legal Provisions:
Section 10 of the IGST Act, 2017 specifies the Place of supply of goods other than supply of
goods imported into, or exported from India.
10(1) The place of supply of goods, other than supply of goods imported into, or exported
from India, shall be as under,-
10(1)(a) where the supply involves movement of goods, whether by the supplier or the
recipient or by any other person, the place of supply of such goods shall be the location of the goods
at the time at which the movement of goods terminates for delivery to the recipient
………
………,
10(1)(c) where the supply does not involve movement of goods, whether by the supplier or the
recipient, the place of supply shall be the location of such goods at the time of the delivery to the
recipient
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10(1)(ca) where the supply of goods is made to a person other than a registered person, the
place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the
location as per the address of the said person recorded in the invoice issued in respect of the said
supply and the location of the supplier where the address of the said person is not recorded in the
invoice.
Explanation.—For the purposes of this clause, recording of the name of the State of the said
person in the invoice shall be deemed to be the recording of the address of the said person;"
4. Analysis:
4.1. The clause (ca) under Section10(1) has been inserted as a non-obstante provision overriding
the provisions under Section 10(1)(a) or 10(1)(c) of IGST Act. The clause (ca) provides that where the
supply of goods is made to an unregistered person, the place of supply would be the location as per
the address of the said person recorded in the invoice and the location of the supplier where the
address of the said person is not recorded in the invoice. An explanation has also been added to the
said clause to clarify that recording the name of the State of the said person shall be deemed to be the
recording of the address of the said person.
4.2. It is mentioned that GST is a destination-based consumption tax and accordingly, in general,
the place of supply has been considered on the basis of place of consumption of the said supply. In
case of supply of goods to unregistered persons, especially in cases of supplies of goods through e-
commerce platforms, where the billing address of the unregistered persons is different from the
available delivery address, as the goods are to be consumed in the State where the delivery address is
located, place of supply as per destination- based consumption principle should be the State where
delivery address is located.
4.3. Thus, in cases involving supply of goods to unregistered person, where the address of delivery
of goods recorded on the invoice is different from the billing address of the said unregistered person
on the invoice, the place of supply of goods in accordance with the provisions of clause (ca) of sub-
section (1) of section 10 of IGST Act, shall be the address of delivery of goods recorded on the
invoice. Besides, where the billing address and delivery address are different in cases of supply of
goods to an unregistered person, the supplier may record the delivery address as the address of the
recipient on the invoice for the purpose of determination of place of supply of the said supply of
goods.
5. Law Committee in its meeting held on 24.01.2024 deliberated on the same, and recommended
issue of a circular on the above lines. The draft circular as recommended by the Law Committee is
placed at Annexure-A
6. Accordingly, the agenda is placed before the GST Council for approval.
**********
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Annexure-A
Circular No. …../…/2024-GST
F.No. CBIC-XX/XX/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****

New Delhi, Dated the XX, 2024
To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners
of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods
and Service Tax Act, 2017 relating to place of supply– Reg.

Vide Notification 02/2023-Integrated Tax, dated September 29, 2023, the provisions of the
Integrated Goods and Services Tax (Amendment) Act, 2023 (31 of 2023) had come into force with
effect from 01.10.2023.
2. Clause (ca) has been inserted in Section 10(1) of the Integrated Goods and Services Tax Act,
2017 (hereinafter referred to as the “IGST Act”) with effect from 01.10.2023. The same is reproduced
as under:
"(ca) where the supply of goods is made to a person other than a registered person, the place
of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be
the location as per the address of the said person recorded in the invoice issued in respect of
the said supply and the location of the supplier where the address of the said person is not
recorded in the invoice.
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Explanation.—For the purposes of this clause, recording of the name of the State of the said
person in the invoice shall be deemed to be the recording of the address of the said person;"
2.1 The said provision has been inserted as a non-obstante provision overriding the provisions
under Section 10(1)(a) or 10(1)(c) of IGST Act. The clause (ca) provides that where the supply of
goods is made to an unregistered person, the place of supply would be the location as per the address
of the said person recorded in the invoice and the location of the supplier where the address of the said
person is not recorded in the invoice. An explanation has also been added to the said clause to clarify
that recording the name of the State of the said person shall be deemed to be the recording of the
address of the said person.
3. Reference has been received from trade and industry seeking clarification regarding the place
of supply in terms of newly added clause (ca) of section 10(1) of the IGST Act, in case of supply of
goods made to an unregistered person where billing address is different from the address of delivery
of goods, especially in the context of supply being made through e-commerce platforms.
4. In order to clarify the issue and to ensure uniformity in the implementation of the provisions
of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of
the Central Goods and Services Tax Act, 2017 hereby clarifies the issues as under:
S.No. Issue Clarification
Place of supply of goods (particularly being supplied through e-commerce platform) to
unregistered persons where billing address is different from the address of delivery of goods.
1. Mr. A (unregistered person) located in
X State places an order on an e-
commerce platform for supply of a
mobile phone, which is to be delivered
at an address located in Y State. Mr.
A, while placing the order on the e-
commerce platform, provides the
billing address located in X state. In
such a scenario, what would be the
place of supply of the said supply of
mobile phone, whether the State
pertaining to the billing address i.e.
State X or the State pertaining to the
delivery address i.e. State Y?
As per the provisions of clause (ca) of sub-
section (1) of section 10 of IGST Act, where the
supply of goods is made to an unregistered
person, the place of supply would be the
location as per the address of the said person
recorded in the invoice and the location of the
supplier where the address of the said person is
not recorded in the invoice. Further, as per
Explanation to the said clause, recording the
name of the State of the said unregistered person
on the invoice shall be deemed to be the
recording of the address of the said person.

Accordingly, it is clarified that in such cases
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involving supply of goods to an unregistered
person, where the address of delivery of goods
recorded on the invoice is different from the
billing address of the said unregistered person
on the invoice, the place of supply of goods in
accordance with the provisions of clause (ca) of
sub-section (1) of section 10 of IGST Act, shall
be the address of delivery of goods recorded on
the invoice i.e. State Y in the present case where
the delivery address is located.

Also, in such cases involving supply of goods to
an unregistered person, where the billing
address and delivery address are different, the
supplier may record the delivery address as the
address of the recipient on the invoice for the
purpose of determination of place of supply of
the said supply of goods.

5. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular. Difficulty, if any, in the implementation of the above instructions may please be brought to
the notice of the Board. Hindi version would follow.
Sanjay Mangal
Principal Commissioner (GST)

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Agenda Item 3(xiv): Providing a mechanism for adjustment of payments made through FORM
DRC-03, in respect of a demand against pre-deposit as well as for adjustment of liability in
Electronic Liability Register (Amendment in Rule 142 of CGST Rules, 2017 along with
clarification circular).
1. Background:
1.1 It is to be noted that as per Rule 142 of the Central Goods and Services Tax Rules, 2017,
(hereinafter referred to as the ‘CGST Rules’), FORM GST DRC-03 is required to be filed for
voluntary tax payments by a taxpayer, vide which he can pay the tax, interest and penalty in respect of
any liability voluntarily as a result of self-assessed discrepancy or as a response to a demand raised by
the tax authorities. It is also used for making payments for discrepancies noticed during audit, during
investigation, for making payments related to Annual Returns, Reconciliation Statement etc.
1.2 After the filing of FORM GST DRC-03 by the taxpayer, in cases where the payment is made
before the issuance of a show-cause notice, the proper officer shall issue an acknowledgement,
accepting the payment made by the said person in FORM GST DRC-04. At the same time, in cases
where the full payment is made through FORM GST DRC-03 after the issuance of the show-cause
notice, but within 30 days from the issuance of the show-cause notice, the proper officer shall issue an
intimation in FORM GST DRC-05 concluding the proceedings in respect of the said Notice.
1.3 It is also to be noted that the proper officer, before service of a demand notice to the person
chargeable with tax, interest and penalty, may communicate such details as ascertained by him in
FORM GST DRC-01A. This will provide an opportunity to the taxpayer to pay such tax before the
issuance of the notice and conclude the proceedings.
1.4 With respect to the said forms, the following issues have been brought to notice, by the trade
and industry, as well as by the tax officers:
a) Providing a mechanism for auto-acknowledgement of FORM GST DRC-03s
filed by the taxpayers.
b) Requirement for a mechanism for closure of proceedings initiated vide
FORM GST DRC-01A.
c) Providing a mechanism for adjustment of payments made through FORM
DRC-03, in respect of a demand against pre-deposit as well as for adjustment
of liability in Electronic Liability Register.
The above issues are discussed below.
1.5 Issue: Providing for a mechanism for processing auto-acknowledgement of FORM GST
DRC-03s filed by the taxpayers.
1.5.1 FORM GST DRC-03s which are filed by the taxable persons where
the taxpayers give reference to the system generated number/ reference numbers of the show
cause notice/ intimation are assigned to the concerned proper officers who have issued the said
show cause notice/ intimation. However, in cases where the payments are made by the taxable
persons in FORM GST DRC-03 without giving reference to the system generated number/
reference number of the show cause notice /intimation, the said FORM GST DRC-03s are
being distributed in the back office amongst the range officer or audit officer or enforcement
officer in the GST back office. In some tax administrations, all the FORM GST DRC-03s are
being assigned to the range officer, who is further given the option to distribute it to other
officers like audit officer, enforcement officer based on the nature of the payment etc.
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1.5.2 In many cases, especially where the taxpayer does not give reference to the system
generated number/ reference number of the show cause notice/ intimation in the FORM GST
DRC-03, the officer assigned with the said form does not have the information to process the
payment, as the same might have been paid by the taxpayer in response to an audit query or an
enforcement action, or even self-assessed discrepancy in returns. As a result, the FORM GST
DRC-03 filed by the taxpayer remains unattended for a long time.
1.5.3 Therefore, a mechanism is required to process such FORM GST DRC-03s in the
backend.

1.6 Issue: Mechanism for closure of proceedings initiated vide FORM GST DRC-01A:
1.6.1 The proceedings initiated vide FORM GST DRC-01A (i.e., Intimation of tax
ascertained as being payable under section 73(5)/74(5) of the CGST Act under Rule 142(1A)
of the CGST Rules, 2017) remains open in the Back Office (BO) even after sufficient
compliance being made by the taxpayer. In this regard, it is to be noted that the compliance by
taxpayer is sufficient in cases where,
i) The amount intimated in Part-A of FORM GST DRC-01A is paid through
FORM GST DRC-03.
ii) Taxpayer files (uploads) reply in Part-B of FORM GST DRC-01A with
partial payment and/or submission, which is acceptable to the proper officer.
iii) Taxpayer files (uploads) reply in Part-B of FORM GST DRC-01A without
any payment and the proper officer finds the explanation satisfactory.
1.6.2 Therefore, a mechanism as well as amendment in rules and the relevant forms
may be required to close the proceedings initiated vide FORM GST DRC-01A where the
taxpayer has made the sufficient compliance.

1.7 Issue: Providing a mechanism for adjustment of payments made through FORM
DRC-03, in respect of a demand against pre-deposit as well as for adjustment of liability in
Electronic Liability Register:

1.7.1 Section 112(8) of the CGST Act, 2017 provides that no appeal shall be filed unless
the appellant has paid 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 a sum equal to twenty per cent. of
the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of
the section 107, arising from the said order, in relation to which the appeal has been filed.
1.7.2 It is also mentioned that as per Section 112(9) of the CGST Act, 2017, where the
appellant has paid the amount as per sub-section (8), the recovery proceedings for the balance
amount shall be deemed to be stayed till the disposal of the appeal.
1.7.3 It is worth noting that there is a big volume of cases awaiting the formation of
GSTAT in those where the first appellate authority has dismissed the appeals. In this regard,
representations were received from the trade and industry, to clarify as to how to deposit the
pre-deposit required for filing of appeals before the Appellate Tribunal, so that recovery
proceedings are stayed as per Section 112(9) of the CGST Act.

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2. Relevant provisions:
2.1 Rule 142 of CGST Rules, 2017:
Rule 142. Notice and order for demand of amounts payable under the Act. -
(1) The proper officer shall serve, along with the
(a) Notice issued under section 52 or section 73 or section 74 or section 76 or section
122 or section 123 or section 124 or section 125 or section 127 or section 129 or
section 130, a summary thereof electronically in FORM GST DRC-01 ,
(b) statement under sub-section (3) of section 73 or sub-section (3) of section 74, a
summary thereof electronically in FORM GST DRC-02, specifying therein the
details of the amount payable.
(1A) The proper officer may, before service of Notice to the person chargeable with tax,
interest and penalty, under sub-section (1) of Section 73 or sub-section (1) of Section 74, as
the case may be, communicate the details of any tax, interest and penalty as ascertained by
the said officer, in Part A of FORM GST DRC-01A.
(2) Where, before the service of Notice or statement, the person chargeable with tax
makes payment of the tax and interest in accordance with the provisions of sub-section (5) of
section 73 or, as the case may be, tax, interest and penalty in accordance with the provisions
of subsection (5) of section 74, or where any person makes payment of tax, interest, penalty or
any other amount due in accordance with the provisions of the Act whether on his own
ascertainment or, as communicated by the proper officer under sub-rule (1A), he shall inform
the proper officer of such payment in FORM GST DRC-03 and the proper officer shall issue
an acknowledgement, accepting the payment made by the said person in FORM GST DRC-
04.
(2A) Where the person referred to in sub-rule (1A) has made partial payment of the amount
communicated to him or desires to file any submissions against the proposed liability, he may
make such submission in Part B of FORM GST DRC-01A.
(3) Where the person chargeable with tax makes payment of tax and interest under sub-
section (8) of section 73 or, as the case may be, tax, interest and penalty under sub-section (8)
of section 74 within thirty days of the service of a Notice under sub-rule (1), or where the
person concerned makes payment of the amount referred to in sub-section (1) of section 129
within seven days of the notice issued under sub-section (3) of Section 129 but before the
issuance of order under the said sub-section (3), he shall intimate the proper officer of such
payment in FORM GST DRC-03 and the proper officer shall issue an order in FORM GST
DRC-05 concluding the proceedings in respect of the said Notice.
(4) The representation referred to in sub-section (9) of section 73 or sub-section (9) of section
74 or sub-section (3) of section 76 or the reply to any Notice issued under any section whose
summary has been uploaded electronically in FORM GST DRC-01 under sub-rule (1) shall
be furnished in FORM GST DRC-06 .
(5) A summary of the order issued under section 52 or section 62 or section 63 or section 64
or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or
section 124 or section 125 or section 127 or section 129 or section 130 shall be uploaded
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electronically in FORM GST DRC-07, specifying therein the amount of tax, interest and
penalty, as the case may be, payable by the person concerned.
(6) The order referred to in sub-rule (5) shall be treated as the Notice for recovery.
(7) Where a rectification of the order has been passed in accordance with the provisions of
section 161 or where an order uploaded on the system has been withdrawn, a summary of the
rectification order or of the withdrawal order shall be uploaded electronically by the proper
officer in FORM GST DRC-08.
3. Analysis:
3.1 Issue: Mechanism for automatic acknowledgment of FORM GST DRC-03:
3.1.1 Punjab and Haryana High Court in the case of M/s. Samyak Metals Pvt. Ltd. v. Union
of India and Others [CWP No.26529 of 2022 dated May 24, 2023] and “Diwakar Enterprises Pvt Ltd
v. Commissioner of CGST and another” [WP-23788-2021-14.03.2023] has inter-alia observed that as
per Rule 142 (2) of the CGST Rules, when a payment is made in FORM GST DRC-03, the Proper
Officer has to issue acknowledgment, accepting the payment made by the said person in FORM GST
DRC-04. In both the cases, Hon’ble High Court directed the Revenue Department to refund the
amount paid by the assessee along with interest during the search proceeding where neither DRC-04
nor notice under Section 74(1) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”)
was issued.
3.1.2 Law Committee deliberated on this issue in its meeting held on 08.11.2023 and
observed that FORM DRC-04 is only an acknowledgement of the payment made in FORM DRC-03.
Law Committee accordingly recommended for auto-generation of acknowledgement in FORM
GST DRC-04 after filing of FORM GST DRC-03. In order to achieve the auto-generation of the
FORM GST DRC-03, the Law Committee also recommended that amendments may be made in sub-
rule (2) of rule 142 of CGST Rules, 2017 (as detailed in Annexure A) and in FORM GST DRC-04
(as detailed in Annexure E). The Law Committee also recommended that the details of such system-
issued FORM GST DRC-04 shall be made available to the officers on dashboard as well as through
MIS.
3.2 Issue: Mechanism for closure of proceedings initiated vide FORM GST DRC-01A:
3.2.1 It was felt that in cases where the taxpayer has made the necessary compliance by
either paying the tax amount along with requisite interest, or has made satisfactory submissions or
both, there needs to be a logical conclusion to the proceedings initiated by issuance of FORM GST
DRC-01A.
3.2.2 Therefore, the Law Committee in its meetings held on 16.03.2022, 07.05.2022,
08.11.2023, and 16.05.2024 recommended that Part-C may be added to FORM GST DRC-01A, to
enable the tax officer to conclude the proceedings, if the reply or the payment or both submitted by
the taxpayer in the Part-B of the said form, is satisfactory. The amendments as recommended by the
Law Committee are detailed in Annexure-B.
3.2.3 In order to enable the said form, and draw the procedure of issuance of Part-C of the
said form, Law Committee also recommended amendments to sub-rule (2A) of Rule 142 of CGST
Rules, 2017, as detailed in Annexure-A.

Agenda for 53rd GSTCM Volume 1
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3.3 Issue: Providing a mechanism for adjustment of payments made through FORM DRC-
03, in respect of a demand against pre-deposit as well as for adjustment of liability in Electronic
Liability Register.
3.3.1 In this regard, it is to mention that the current mechanism/ process flow is as
below:
(i) When an adjudication order or an appeal order is issued and a summary is
uploaded in the system vide FORM GST DRC-07 or FORM GST APL-04, as the case may
be, demand is created and a debit entry is posted in the Electronic Liability Ledger Part II
(ELL-II) of the taxpayer.
(ii) When the taxpayer navigates to ‘payment towards demand’ in his dashboard,
he will be shown the demand so created, against which he can very well make payment even
now, which will be made as a credit entry against the said demand in the ELL-II.
(iii) Payments made in the said manner (and not vide FORM GST DRC -03) will
get adjusted automatically against pre-deposit that is required to be paid by the taxpayer, if
and when he decides to file an appeal before the appellate authority. Similar will be the
procedure, if and when the taxpayer decides to file an appeal before the appellate tribunal
(when the Tribunal comes into operation).
3.3.2 Issue arises when an amount intended to be made as a ‘payment towards demand’ has
been paid vide FORM GST DRC-03, either voluntarily or on persuasion of the tax authorities. For
processing such cases, where the payment to be made in respect of a demand has been paid through
FORM GST DRC-03, Law Committee recommended to introduce a new form, FORM GST DRC-
03A, which will enable the taxpayers to adjust the amounts paid through FORM GST DRC-03,
towards the amounts to be paid towards a demand. FORM GST DRC-03A, as recommended by the
Law Committee, is detailed in Annexure-D. Law Committee also recommended some amendments
in FORM GST DRC-03, as detailed in Annexure-C, to facilitate the same. Law Committee felt that
such a measure will be extremely useful in regularizing the payments made in FORM DRC-03 (where
they were intended to be made against certain demands), as well as to clean the Electronic Liability
Ledger of the taxpayers.

3.3.4 To achieve the above, Law Committee recommended suitable amendments in Rule
142 of the CGST Rules by insertion of sub-rule (2B) in the said rule, as detailed in Annexure-A.

3.3.5 Law Committee also observed that in respect of cases where payment of pre-deposit is to be
made for filing of appeal in GST Appellate Tribunal under section 112 of CGST Act, so that recovery
proceedings are stayed as per Section 112(9) of the CGST Act, there is a need to provide clarity
through a circular. Besides, clarification is also required in respect of adjustment of payments made
through DRC-03 against demands created in Electronic Liability Register of a registered person as a
result of a demand order or appeal order. Law Committee recommended that these issues may be
clarified through a circular. The draft circular recommended by the Law Committee is enclosed as
Annexure-F.

4. The agenda note is placed before the Council for approval please.

Agenda for 53rd GSTCM Volume 1
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Annexure-A

Rule 142 of CGST Rules, 2017 may be amended as below:

Rule 142. Notice and order for demand of amounts payable under the Act. -

…

(1A) The proper officer may, before service of notice to the person chargeable with tax,
interest and penalty, under sub-section (1) of Section 73 or sub-section (1) of Section 74, as
the case may be, communicate the details of any tax, interest and penalty as ascertained by
the said officer, in Part A of FORM GST DRC-01A.

(2) Where, before the service of notice or statement, the person chargeable with tax makes
payment of the tax and interest in accordance with the provisions of sub-section (5) of section 73
or, as the case may be, tax, interest and penalty in accordance with the provisions of sub-section
(5) of section 74, or where any person makes payment of tax, interest, penalty or any other
amount due in accordance with the provisions of the Act, whether on his own ascertainment or,
as communicated by the proper officer under sub rule (1A),] he shall inform the proper officer of
such payment in FORM GST DRC-03 and the proper officer shall issue an acknowledgement,
accepting the payment made by the said person in FORM GST DRC– 04 shall be made available
to the person through the common portal electronically.

(2A) Where the person referred to in sub-rule (1A) has made partial payment of the amount
communicated to him or desires to file any submissions against the proposed liability, he may
make such submission in Part B of FORM GST DRC-01A, and thereafter the proper officer
may issue an intimation in Part-C of FORM GST DRC-01A, accepting the payment or the
submissions or both, as the case may be, made by the said person.


(2B) Where an amount of tax, interest, penalty or any other amount payable by a person
under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or
section 124 or section 125 or section 127 or section 129 or section 130 of this act, has been
paid by the said person through an intimation in FORM GST DRC-03 under sub-rule (2),
instead of crediting the said amount in the electronic liability register in FORM GST PMT –
01 against the debit entry created for the said demand, the said person may file an
application in FORM GST DRC-03A electronically on the common portal, and the amount so
paid and intimated through FORM GST DRC-03 shall be credited in Electronic Liability
Register in FORM GST PMT –01 against the debit entry created for the said demand, as if
the said payment was made towards the said demand on the date of such intimation made
through FORM GST DRC-03;

Provided that where an order in FORM GST DRC-05 has been issued in terms of sub-rule (3)
concluding the proceedings, in respect of the payment of an amount in FORM GST DRC-03,
an application in FORM GST DRC-03A cannot be filed by the said person in respect of the
said payment.
…
Agenda for 53rd GSTCM Volume 1
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Annexure-B

FORM GST DRC-01A
Intimation of tax ascertained as being payable under section 73(5)/74(5)
[See Rule 142 (1A), (2A)]
Part A
No.: Date:
Case ID No.
To
GSTIN……………………………
Name……………………………
Address…………………………
Sub.: Case Proceeding Reference No………………- Intimation of liability under section
73(5)/section 74(5) – reg.
Please refer to the above proceedings. In this regard, the amount of tax/interest/penalty payable
by you under section 73(5) / 74(5) with reference to the said case as ascertained by the undersigned in
terms of the available information, as is given below:
Act Period Tax Interest Penalty Total
CGST Act
SGST/UTGST Act
IGST Act
Cess
Total

The grounds and quantification are attached / given below:


You are hereby advised to pay the amount of tax as ascertained above along with the amount
of applicable interest in full by ……..,failing which Show Cause Notice will be issued under
section 73(1).
OR
You are hereby advised to pay the amount of tax as ascertained above along with the amount
of applicable interest and penalty under section 74(5) by …….., failing which Show Cause
Notice will be issued under section 74(1).
Agenda for 53rd GSTCM Volume 1
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In case you wish to file any submissions against the above ascertainment, the same may be
furnished by……... in Part B of this Form.
Proper Officer
Signature…………………
Name………………………
Designation………………
Jurisdiction ------------------
Address ----------------------


Part B
Reply to the communication for payment before issue of Show Cause Notice
[See Rule 142 (2A)]
Reference No. of Intimation:
Date:

To
Proper Officer,
Wing / Jurisdiction.

Sub.: Case Proceeding Reference No………………- Payment/Submissions in response to
liability intimated under Section 73(5)/74(5) – reg.
Please refer to Intimation ID…………… in respect of Case ID……………….vide which the
liability of tax payable as ascertained under section 73(5) / 74(5) was intimated.
In this regard,
A. this is to inform that the said liability is discharged partially/ fully to the extent of Rs.
…………… through …………..………and the submissions regarding remaining liability are
attached / given below:
OR
B. the said liability is not acceptable and the submissions in this regard are attached /
given below:


Signature of Authorised Signatory
Name……………………………
GSTIN……………………………
Designation / Status Address………

Upload Attachment
Agenda for 53rd GSTCM Volume 1
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Part C
[See Rule 142(2A)]

Reference No. of Intimation: Date:

To
GSTIN……………………………
Name……………………………
Address…………………………

Acceptance of submission and/or payment made in reply to intimation made in Part-A of FORM
GST DRC-01A

This has reference to the communication issued in Part-A of FORM GST DRC-01A vide reference
no. ---------- dated ----------, the payment made through FORM GST DRC-03 vide reference no. ------
dated --------.The said payment made by you has been found satisfactory and hence accepted.
OR
This has reference to the reply furnished vide reference no. ------ dated -------- in response to the
communication issued in Part-A of Form GST DRC-01A vide reference no. ---------- dated ----------.
along with the payment made through FORM GST DRC-03 vide reference no. ------ dated --------.
The said submission and the payment made by you has been found satisfactory and hence accepted.
OR
This has reference to the reply furnished vide reference no. ------ dated -------- in response to the
communication issued in Part-A of Form GST DRC-01A vide reference no. ---------- dated ----------.
The said reply has been found satisfactory and hence accepted.

Signature…………………
Name…………………
Designation………………
Jurisdiction ………………
Address ……………



Upload Attachment
Upload Attachment
Agenda for 53rd GSTCM Volume 1
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Annexure-C

FORM GST DRC- 03
[See rules 142(2) & 142 (3)]
Intimation of payment made voluntarily or made against the show cause notice (SCN) or
statement [or intimation of tax ascertained through FORM GST DRC-01A
1. GSTIN
2. Name < Auto>
3. Cause of payment << drop down>>
3A Shipping bill details of erroneous
IGST refund (to be enabled only if
the specified categoriesy are is
chosen in drop down menu)

(i) Shipping Bill/ Bill of Export No. & Date:
(ii) Amount of IGST paid on export of goods:
(iii) Notification No. used for procuring inputs at
concessional rate or exemption (in cases of
contravention of sub-rule 10 of Rule 96):
(iv) Date of notification:
(v) Amount of refund received:
(vi) Amount of erroneous refund to be deposited:
(vii) Date of credit of refund in Bank Account:
4. Section under which voluntary
payment is made
<< drop down>>
5. Details of show cause notice, if
payment is made within 30 days of
its issue, scrutiny, intimation of tax
ascertained through Form GST
DRC01A, audit, inspection or
investigation, GST RFD-01, others
(specify)

i. Audit
ii. Inspection or investigation
iii. After issuance of SCN/
Statement but before issuance of
the order
iv. Scrutiny,
v. Intimation of tax ascertained
through FORM GST DRC-01A,
vi. Payment made in response to
FORM GST DRC -01 B,
vii. Payment made in response to
FORM GST DRC -01 C,
viii. Deposit of Erroneous Refund
of unutilized ITC,
Reference No./ARN Date of issue/filing
Agenda for 53rd GSTCM Volume 1
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ix. Non-receipt of foreign
remittance in respect of refund of
unutilized ITC on export of goods
under Rule 96B
x. Others (specify)

6. Financial Year
7. Details of payment made including interest and penalty, if applicable
(Amount in Rs.)
Sr.
No.
Tax
Period
Act

Place
of
supply
(POS)
Tax/
Cess


Interest Penalty,
if
applicabl
e
Fee

Others Total Ledger
utilised
(Cash
/Credit)
Debit
entry
no.

Date of
debit
entry
1 2 3 4 5 6 7 8 9 10 11 12 13



8. Reasons, if any - << Text box>>
9. Verification-

I hereby solemnly affirm and declare that the information given hereinabove is true and
correct to the best of my knowledge and belief and nothing has been concealed therefrom.
Signature of Authorized Signatory
Name
Designation / Status
Date ……………..

Note -
1. Payment to be made only in cash for deposit of erroneous refund of unutilised Input
Tax Credit (ITC) and for deposit of erroneous refund of Integrated Goods and Services
Tax (IGST), obtained in contravention of sub-rule (10) of rule 96.
2. ARN of FORM GST RFD-01 to be mentioned mandatorily if cause of payment is
selected as – ‘deposit of erroneous refund of unutilised ITC’.
3. Details of shipping bills to be entered in the same pattern in which the details have
been entered in the returns.

Agenda for 53rd GSTCM Volume 1
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Annexure-D
FORM GST DRC- 03A
[See rules 142(2B)]
Application for adjustment of the amount paid through FORM GST DRC-03 against the order
of demand
1. GSTIN
2. Legal name < Auto>
3. Trade name, if any < Auto>
4. ARN of DRC-03A < Auto>
5. Date of filing DRC-03A < Auto>
6. ARN of the DRC-03 through which
payment made

7. Date of filing of DRC-03 <Auto>
8. Amount paid through DRC-03 < Auto>
(Amount in Rs.)
Sr.
No.
Tax
Period
Act

Place of
Supply (POS)
Tax/
Cess


Interest Penalty Fee

Others Total
1 2 3 4 5 6 7 8 9 10
<
Auto>
< Auto>
<
Auto>
< Auto>
<
Auto>
< Auto> < Auto> < Auto> < Auto>
<
Auto>
<
Auto>
< Auto>
<
Auto>
< Auto>
<
Auto>
< Auto> < Auto> < Auto> < Auto>
<
Auto>
Total
< Auto>
<
Auto>
< Auto> < Auto> < Auto> < Auto> < Auto> < Auto> < Auto>

9. Reference no. of the order of
demand against which payment was
intended to be made (including
rectification / appeal order)

10. Date of issue of the order <Auto>
11. Amount of demand <Auto>
(Amount in Rs.)
Agenda for 53rd GSTCM Volume 1
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Sr.
No.
Tax
Period
Act

Place of
Supply (POS)
Tax/
Cess


Interest Penalty Fee

Others Total
1 2 3 4 5 6 7 8 9 10
<
Auto>
< Auto>
<
Auto>
< Auto>
<
Auto>
< Auto> < Auto> < Auto> < Auto>
<
Auto>
<
Auto>
< Auto>
<
Auto>
< Auto> < Auto> < Auto> < Auto> < Auto> < Auto> < Auto>
Total
< Auto>
<
Auto>
< Auto> < Auto> < Auto> < Auto> < Auto> < Auto> < Auto>

12.
UNDERTAKING
I hereby undertake that the payment made vide the FORM GST DRC-03 with unique ARN number
mentioned at S. No. 6 above, has actually been paid by me as ‘payment towards demand’ intended to be
paid against the demand (with unique ARN number of FORM GST DRC -07, or GST DRC-08 or FORM
GST APL-04, as the case may be, mentioned at S. No. 9 above) and has not been used towards any other
demand/ payment to be made by me.
I also undertake to pay back to the Government the amount so adjusted using this form along with
applicable interest, if any of the details declared above are found to be false subsequently. I will also be
liable to penal action under Section 122(1)(x) of CGST Act.

13. Verification-

I hereby solemnly affirm and declare that the information given hereinabove is true and correct to
the best of my knowledge and belief and nothing has been concealed therefrom.



Signature of Authorized
Signatory Name
Designation / Status
Date ……………..

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Annexure-E

FORM GST DRC – 04
[See rule 142(2) & 142(3)]
Reference No: Date:
To
_______________ GSTIN/ID
----------------------- Name
_______________ Address

Tax Period ------------- F.Y. ----------
ARN - Date –

Acknowledgement of acceptance of payment made voluntarily

The payment made by you vide application referred to above is hereby acknowledged to the
extent of the amount paid and for the reasons stated therein.

This is a system generated acknowledgement and does not require signature.

Signature
Name
Designation

Copy to-

Agenda for 53rd GSTCM Volume 1
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Annexure-F
Circular No. ……/…/2024 - GST
CBIC-…………………..-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, Dated the ……………
To,
The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Director Generals / Director Generals (All)

Madam/Sir,
Subject: Guidelines for recovery of outstanding dues, in cases wherein first appeal
has been disposed of, till Appellate Tribunal comes into operation.

Doubts have been raised by the trade and the field formations in respect of recovery of
outstanding dues, in cases where the first appellate authority has confirmed the demand created by
the adjudicating authority, fully or partially, and where appeal against such order of appellate
authority could not be filed under Section 112 of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as ‘the CGST Act’) due to non- constitution of Appellate Tribunal
(hereinafter referred to as ‘Tribunal’), as yet. Doubts have also been raised as to whether the amount
that was originally intended to be paid towards the demand created but has inadvertently been paid
and intimated by the taxpayer through FORM GST DRC-03 either under the ‘voluntary’ category or
under the ‘others’ category, can be adjusted against the pre-deposit that is required to be paid by the
taxpayer for filing appeal before the appellate authority under Section 107, and before the appellate
tribunal under Section 112 of the CGST Act.

2. The matter has been examined in detail. In order to clarify the issue and to ensure uniformity
in the implementation of the provisions of the law across field formations, the Board, in exercise of
its powers conferred by section 168 (1) of the CGST Act, hereby issues the following clarifications
and guidelines.

3. In cases, where the first appellate authority has confirmed the demand issued by the
adjudicating authority, partially or fully, the taxpayers cannot file appeal against the said appellate
order at present due to non-operation of GST Appellate Tribunal as yet. As per Section 112 of the
CGST Act, every person has statutory remedy of appeal against the order passed by the first
appellate authority or by a revisional authority, before the Tribunal. It may further be noted that if
any person files an appeal in accordance with the requirement of sub-section (8) of section 112 of the
CGST Act (i.e., on payment of prescribed pre-deposit), the recovery proceedings for the balance
Agenda for 53rd GSTCM Volume 1
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amount is deemed to be stayed till disposal of the appeal as per sub-section (9) of section 112 of the
CGST Act. At the same time, as per Section 78 of CGST Act, the recovery proceeding shall be
initiated after three months of the date of order creating the demand. However, as the taxpayers are
not able to file appeal under section 112 in Appellate Tribunal against the orders of appellate
authority and therefore, are not able to make the pre-deposit under sub-section (8) of section 112 of
CGST Act, in some cases, the tax officers are taking a view that there is no stay against recovery as
per sub-section (9) of section 112 of CGST Act. In some cases, taxpayers have either paid or are
willing to pay the requisite amount of pre-deposit as per sub-section (8) of section 112 of CGST Act
either by crediting in their electronic liability register against the demand so created, or by depositing
the said amount through FORM DRC-03. However, tax officers are still resorting to recovery
proceedings after completion of period stipulated under section 78 of CGST Act.

4. In order to facilitate the taxpayers to make the payment of the amount of pre-deposit as per
sub-section (8) of section 112 of CGST Act, and to avail the benefit of recovery of stay from
recovery of the remaining amount of confirmed demand as per sub-section (9) of section 112 of
CGST Act, it is hereby clarified that in cases where the taxpayer decides to file an appeal against
appellate authority and wants to make the payment of the amount of pre-deposit as per sub-section
(8) of section 112 of CGST Act, he can make the payment of an amount equal to the amount of pre-
deposit by navigating to Services >> Ledgers>> Payment towards demand, from his dashboard. The
taxpayer would be navigated to Electronic Liability Register (ELL) Part-II in which he can select the
order, out of the outstanding demand orders, against which payment is intended to be made. The
amount so paid would be mapped against the selected order and demand amount would be reduced
in the balance liability in the aforesaid register. The said amount deposited by the taxpayer will be
adjusted against the amount of pre-deposit required to be deposited at the time of filing appeal before
the Appellate Tribunal.
5. The taxpayer also needs to file an undertaking/ declaration with the jurisdictional proper
officer that he will file appeal against the said order of the appellate authority before the Appellate
Tribunal, as and when it comes in to operation, within the timelines mentioned in section 112 of the
CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019
dated 03.12.2019. On providing the said undertaking and on payment of an amount equal to the
amount of pre-deposit as per the procedure mentioned in para 4 above, the recovery of the remaining
amount of confirmed demand as per the order of the appellate authority will stand stayed as per
provisions of sub-section (9) of section 112 of CGST Act.
6. In case, the taxpayer does not make the payment of the amount equal to amount of pre-
deposit or does not provide the undertaking/ declaration to the proper officer, then it will be
presumed that taxpayer is not willing to file appeal against the order of the appellate authority and in
such cases, recovery proceedings can be initiated as per the provisions of law. Similarly, when the
Tribunal comes into operation, if he does not file appeal within the timelines specified in Section 112
of the CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order,
2019 dated 03.12.2019, the remaining amount of the demand will be recovered as per the provisions
of law.
Agenda for 53rd GSTCM Volume 1
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7.1 It has also been noticed that some taxpayers have already paid amounts that were intended to
have been paid towards a demand, through FORM GST DRC-03. Attention is invited to notification
No. XX/2024- CT dated xx.xx.2024, vide which sub-rule (2B) has been inserted in Rule 142 of
Central Goods and Services Rules, 2017 (hereinafter referred to as ‘CGST Rules), providing for a
mechanism for cases where the person liable to pay tax, interest and penalty under section 52 or
section 73 or section 74 or section 76 or section 122 or section 123 or section 124 or section 125 or
section 127 or section 129 or section 130 has made payment of such tax, interest and penalty, but has
inadvertently furnished the intimation through FORM GST DRC-03 under sub-rule (2) of Rule 142.
In such cases, the said person can file an application in FORM GST DRC-03A, and the amount so
paid and intimated through the FORM GST DRC-03 shall be adjusted as if the said payment was
made towards the said demand on the date of such intimation through FORM GST DRC-03.

7.2 Accordingly, in cases, where the concerned taxpayer has paid an amount that was intended
to have been paid towards a particular demand through FORM GST DRC-03, has submitted an
application in FORM GST DRC-03A, the amount so paid and intimated through the FORM GST
DRC-03 will be considered as if the payment was made towards the said demand on the date of such
intimation through FORM GST DRC-03. The amount so paid shall also be liable to be adjusted
towards the amount required to be paid as pre-deposit under Section 107 and Section 112 of the
CGST Act, if and when the taxpayer files an appeal against the said demand, before the appellate
authority or the appellate tribunal, as mentioned in para 4 above, and the remaining amount of
confirmed demand as per the order of the adjudicating authority or the appellate authority, as the
case may be, will stand stayed as per provisions of sub-section (6) of section 107 and sub-section (9)
of section 112 of CGST Act. However, if he does not file appeal within the timelines prescribed in
Section 107 and Section 112 of the CGST Act, as the case may be, read with Central Goods and
Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019, the remaining amount
of the demand will be recovered as per the provisions of law.

7.3 In this regard, it is to be mentioned that the application in FORM GST DRC-03A for
adjustment of demand liability against the payment through FORM GST DRC-03 cannot be made in
cases where against the payment made through the said FORM GST DRC-03, proceedings have
already been concluded by issuance of an order in FORM GST DRC-05 as per the Rule 142(3) of
CGST Rules, 2017.


8. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.

9. Difficulty, if any, in implementation of the above instructions may please be brought to the
notice of the Board. Hindi version would follow.

Sanjay Mangal
Principal Commissioner (GST)

Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xv): Clarification on valuation of supply of import of services by a related
person where recipient is eligible to full input tax credit.

1.1 As per S. No. 4 of Schedule I of CGST Act, 2017, import of services by a person from a
related person or from any of his other establishments outside India, in the course or furtherance of
business, is to be treated as supply even if made without consideration. Representations have been
received stating that demands are being raised by field formations on taxability of certain activities
undertaken by the related person based outside India in the hand of the related person in India as
import of services based on an expansive interpretation of the deeming fiction in S. No. 4 of Schedule
I of CGST Act, 2017 though no consideration is involved in the said activities and the same are not
considered as supplies by the related person in India.
1.2 For instance, there may be cases where the overseas affiliates provide the right to use
trademark/ trade name/ brand to its related Indian entity, within the framework of the agreement(s)
between overseas affiliates and Indian entity for the limited purpose of rendering services back to
overseas affiliates. It has been represented that some of the field formations are taking a view that the
use of the trademark/ trade name/ brand by Indian subsidiaries/related entity for captive use for
providing service to the overseas affiliate, even if without any consideration, is subject to GST as per
deeming provision under S. No. 4 of Schedule I of CGST Act.
1.3 Further, there are also cases where Indian entities are providing IT-IT enabled services to
their overseas affiliates whereby, they are given access to proprietary interfaces and software
technology belonging to such overseas affiliates specifically for providing services to the said
overseas affiliates. It has been represented that some field formations have contended that by virtue of
deeming provision under S. No. 4 of Schedule I of CGST Act, access to such proprietary interfaces
and software technology by overseas affiliates on free of cost basis are chargeable to GST in the
hands of the recipient in India. However, the industry has represented that such proprietary interfaces
and software technology is provided by overseas affiliate to them only for the purpose of providing
services to the said overseas affiliate as per the agreement/contract entered into between them and
cannot be considered as a “supply” under GST law.

2. The matter has been examined as under:
2.1 In cases, where the supplier of services is located outside India and the recipient of services is
located in India, and the place of supply of service is in India, the said supply of service is to be
referred as import of services as per section 2(11) of IGST Act, 2017. Further, Schedule I of the
CGST Act, 2017 provides for the activities to be treated as supply even if made without consideration.
Import of services by a person from a related person or from any of his other establishments outside
India, in the course or furtherance of business, is to be treated as supply, even if made without
consideration, as per Serial no. 4 of Schedule I of CGST Act. The same is reiterated as under:
“SCHEDULE I
ATIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION

Agenda for 53rd GSTCM Volume 1
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(1) ….
(2) ….
(3) ….
(4) Import of services by a person from a related person or from any of his other
establishments outside India, in the course or furtherance of business.”
Therefore, the recipient of such services is liable to pay GST under reverse charge on such
import of services from a related person, even if such supply is made without consideration.

2.2 It may be noted that clause (f) of sub-section (3) of section 31 of CGST Act, 2017 provides
that a registered person, who is liable to pay tax under sub-section (3) or subsection (4) of section 9
i.e. on reverse charge basis, shall issue an invoice in respect of goods or services or both received by
him from the supplier, who is not registered on the date of receipt of goods or services or both. The
said clause is reproduced below:
“Section 31. Tax invoice.-
(3) Notwithstanding anything contained in sub-sections (1) and (2)-
……
(f) a registered person who is liable to pay tax under sub-section (3) or subsection (4) of section
9 shall issue an invoice in respect of goods or services or both received by him from the
supplier who is not registered on the date of receipt of goods or services or both;”
Thus, in case of import of services by a domestic entity from its overseas affiliates, the related
domestic entity is required to issue invoice under reverse charge mechanism.
2.3 It may be noted that there may be some activities performed by overseas affiliates for the
related domestic entity which are not considered as supply of service by such related entities and
accordingly, no consideration is being charged by overseas affiliates from the related domestic entity
and no invoice is being issued by the domestic related person for the said supply.

2.4 As per clause (a) of rule 28(1) of the CGST Rules, 2017, the value of supply of goods or
services or both between distinct persons or where the supplier and recipient are related shall be the
open market value of such supply. However, if the open market value is not available, the value of
supply of goods or services or both between the related/distinct persons shall be the value of supply
of goods or services of like kind and quality as per clause (b) of rule 28(1) of the CGST Rules, 2017.
The second proviso to rule 28(1) of CGST Rules provides that where the recipient is eligible for
full input tax credit, the value declared in the invoice shall be deemed to be the open market
value of the goods or services. The said rule is reproduced below:
“28. Value of supply of goods or services or both between distinct or related persons, other
than through an agent.- (1)The value of the supply of goods or services or both between distinct
persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient
are related, other than where the supply is made through an agent, shall-
Agenda for 53rd GSTCM Volume 1
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(a) be the open market value of such supply;
(b) if the open market value is not available, be the value of supply of goods or services of like
kind and quality;
(c) if the value is not determinable under clause (a) or (b), be the value as determined by the
application of rule 30 or rule 31, in that order:
Provided that where the goods are intended for further supply as such by the recipient, the
value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price
charged for the supply of goods of like kind and quality by the recipient to his customer not being a
related person:
Provided further that where the recipient is eligible for full input tax credit, the value
declared in the invoice shall be deemed to be the open market value of the goods or services.”
2.5 It may also be noted that clarification has been provided vide Circular No. 199/11/2023-GST
dated 17.07.2023 regarding taxability of services provided by an office of an organisation in one
State to the office of that organisation in another State, both being distinct persons. It has been
clarified in the said Circular that as per the second proviso to rule 28(1) of CGST Rules, in respect of
supply of services by Head Office(HO) to Branch Offices (BO) of an organisation, the value of the
said supply of services declared in the invoice by HO shall be deemed to be open market value of
such services, if the recipient BO is eligible for full input tax credit. Further, in such cases where full
input tax credit is available to the recipient, if HO has not issued a tax invoice to the BO in respect of
any particular services being rendered by HO to the said BO, the value of such services may be
deemed to be declared as Nil by HO to BO, and may be deemed as open market value in terms of
second proviso to rule 28(1) of CGST Rules.
2.5.1 Representations have been received from the trade stating that the same treatment, which is
being given to domestic related parties as per clarification provided by Circular No. 199/11/2023-GST
dated 17.07.2023, may also be provided in cases where a foreign entity is providing service to its
related party located in India in cases where full ITC is available to the recipient located in India.
2.6 It may be noted that the second proviso to rule 28(1) of CGST Rules which provides that
where the recipient is eligible for full input tax credit, the value declared in the invoice shall be
deemed to be the open market value of the goods or services is applicable in all the cases where
supply is between related persons or between distinct persons. Therefore, it is evident that the
clarification which has been issued vide Circular No. 199/11/2023-GST dated 17.07.2023 in respect
of supplies of services between distinct persons is also applicable in respect of import of services
between related persons.
2.7 In light of the above, Law Committee in its meeting held on 27.12.2023 deliberated on the
issue and recommended that it may be clarified through a Circular that in cases where the foreign
affiliate is providing certain services to the related domestic entity, for which full input tax credit is
available to the said related domestic entity, the value of such supply of services declared in the
invoice by the said related domestic entity may be deemed as open market value in terms of second
proviso to rule 28(1) of CGST Rules. It may be further clarified that in cases where full input tax
credit is available to the recipient, if the invoice is not issued by the related domestic entity with
respect to any service provided by the foreign affiliate to it, the value of such services may be deemed
to be declared as Nil, and may be deemed as open market value in terms of second proviso to rule
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28(1) of CGST Rules. Draft Circular in this regard recommended by the Law Committee is enclosed
with this agenda as Annexure-A.
2.8 Accordingly, the agenda is placed before the GST Council for approval.
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Annexure-A
Circular No. …../…/2024-GST
F. No. CBIC- 20001/13/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****

New Delhi, Dated the XX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on valuation of supply of import of services by a related person where
recipient is eligible to full input tax credit – Reg.

As per S. No. 4 of Schedule I of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to as the ‘CGST Act’), import of services by a person from a related person or from any of
his other establishments outside India, in the course or furtherance of business, is to be treated as
supply even if made without consideration.
2. Representations have been received from trade and industry stating that demands are being
raised by field formations from the registered persons seeking tax on reverse charge basis in respect of
certain activities undertaken by their related persons based outside India, by considering the said
activities as import of services by the registered person in India, based on an expansive interpretation
of the deeming fiction in S. No. 4 of Schedule I of CGST Act, though no consideration is involved in
the said activities and the same are not considered as supplies by the said related person in India. It
has been represented that the same treatment, which is being given to domestic related parties/ distinct
persons as per clarification provided by Circular No. 199/11/2023-GST dated 17.07.2023, may also be
provided in cases where a foreign entity is providing service to its related party located in India, in
cases where full ITC is available to the said recipient located in India.
3.1 In order to clarify the issue and to ensure uniformity in the implementation of the provisions
of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of
the CGST Act, hereby clarifies the issues as under:
3.2 Rule 28 of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the ‘CGST
Rules’) is reproduced as below:
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“Rule 28. Value of supply of goods or services or both between distinct or related persons,
other than through an agent. –
(1) The value of the supply of goods or services or both between distinct persons as
specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are
related, other than where the supply is made through an agent, shall-
(a) be the open market value of such supply;
(b) if the open market value is not available, be the value of supply of goods or
services of like kind and quality;
(c) if the value is not determinable under clause (a) or (b), be the value as determined
by the application of rule 30 or rule 31, in that order:
Provided that where the goods are intended for further supply as such by the recipient, the
value shall, at the option of the supplier, be an amount equivalent to ninety percent of the
price charged for the supply of goods of like kind and quality by the recipient to his customer
not being a related person:
Provided further that where the recipient is eligible for full input tax credit, the value
declared in the invoice shall be deemed to be the open market value of the goods or
services.
…”
3.3 As per second proviso to rule 28(1) of CGST Rules, in cases involving supply of goods or
services or both between the distinct or related persons where the recipient is eligible for full input
tax credit, the value declared in the invoice shall be deemed to be the open market value of the said
goods or services.
3.4 It may be noted that vide Circular No. 199/11/2023-GST dated 17.07.2023, clarification has
been issued regarding taxability of services provided by an office of an organisation in one State to
the office of that organisation in another State, both being distinct persons. It has been clarified in the
said circular that as per the second proviso to rule 28(1) of CGST Rules, in respect of supply of
services by Head Office (HO) to Branch Offices (BO) of an organisation, the value of the said supply
of services declared in the invoice by HO shall be deemed to be open market value of such services, if
the recipient BO is eligible for full input tax credit. It has also been clarified vide the said circular that
in cases where full input tax credit is available to the recipient, if HO has not issued a tax invoice to
the BO in respect of any particular services being rendered by HO to the said BO, the value of such
services may be deemed to be declared as Nil by HO to BO, and may be deemed as open market value
in terms of second proviso to rule 28(1) of CGST Rules.
3.5 The second proviso to Rule 28 (1) of CGST Rules, is applicable in all the cases involving
supply of goods or services or both between the distinct persons as well as the related persons, in
cases where full ITC is available to the recipient. Accordingly, it is evident that the clarification
which has been issued vide Circular No. 199/11/2023-GST dated 17.07.2023 in respect of supplies of
services between distinct persons in cases where full ITC is available to the recipient, is equally
applicable in respect of import of services between related persons.
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3.6 In case of import of services by a registered person in India from a related person located
outside India, the tax is required to be paid by the registered person in India under reverse
charge mechanism. In such cases, the registered person in India is required to issue self-invoice
under Section 31(3)(f) of CGST Act and pay tax on reverse charge basis.
3.7 In view of the above, it is clarified that in cases where the foreign affiliate is providing certain
services to the related domestic entity, and where full input tax credit is available to the said related
domestic entity, the value of such supply of services declared in the invoice by the said related
domestic entity may be deemed as open market value in terms of second proviso to rule 28(1) of
CGST Rules. Further, in cases where full input tax credit is available to the recipient, if the invoice is
not issued by the related domestic entity with respect to any service provided by the foreign affiliate
to it, the value of such services may be deemed to be declared as Nil, and may be deemed as open
market value in terms of second proviso to rule 28(1) of CGST Rules.

4. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
5. Difficulty, if any, in the implementation of the above instructions may please be brought to
the notice of the Board. Hindi version would follow.

Sanjay Mangal
Principal Commissioner (GST)



Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xvi): Clarification regarding applicability of provisions of Section 16 (4) of
CGST Act, 2017, in respect of invoices issued by the recipient under RCM.

Representations have been received from trade and industry seeking clarity on the
applicability of time limit specified under section 16(4) of Central Goods & Services Tax Act, 2017
for the purpose of availment of input tax credit (ITC) by the recipient on the tax paid by him under
reverse charge mechanism (RCM) in respect of supplies received from unregistered persons. It has
been represented that in some cases, where tax is payable on reverse charge basis by the recipient,
such as, where an activity is performed by the overseas related person for the entity located in India
and no consideration is involved, such an activity may not be considered as supply of services by the
concerned recipient in India and accordingly, no invoice is issued as well as no tax is paid by the said
recipient under RCM in respect of the same. However, later on, either on their own on the basis of
some clarification issued by the department or on the basis of some court judgement or on being
pointed out by the tax authorities during scrutiny or audit or otherwise, the said recipient issues the
invoice and pays the tax under RCM, along with interest, and claims input tax credit on such tax paid.
2. It has been represented that some of the field formations are taking the view in such cases that
for the purpose of section 16(4) of CGST Act, the relevant year of the invoice for the purpose of
section 16(4) of CGST Act is the year in which the said supply was received and accordingly, the time
limit for availment of ITC under section 16(4) of CGST Act is only upto the September/ November of
the following financial year, i.e. the financial year following the financial year in which the said
services was received.. On the other hand, industry has represented that as the self-invoice in respect
of such supplies received from unregistered supplier, where tax has to be paid by the recipient on
RCM basis, is to be issued by the recipient as per section 31(3)(f) of CGST Act, the relevant year of
invoice for the purpose of section 16(4) of CGST Act is the financial year in which such invoice has
been issued and accordingly, ITC can be availed on the said invoice under section 16(4) of CGST Act
till the September/ November of the financial year following the financial year in which such invoice
has been issued. Request has been made to issue clarification in the matter to avoid litigation.
3. The matter has been examined as follows:
3.1 As per section 16(2)(a) of CGST Act, no registered person shall be entitled to the credit of
any input tax in respect of any supply of goods or services or both to him unless he is in possession of
a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying
documents as may be prescribed.
3.2 Rule 36(1)(b) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the
CGST Rules) prescribes that input tax credit shall be availed by a registered person inter alia on the
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basis of an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of section
31 of CGST Act, subject to the payment of tax.
3.3 Further, clause (f) of sub-section (3) of section 31 of CGST Act provides that a registered
person, who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, shall issue an
invoice in respect of goods or services or both received by him from the supplier who is not registered
on the date of receipt of goods or services or both. Accordingly, where the supplier is unregistered and
recipient is registered, and the recipient is liable to pay tax on the said supply on RCM basis, the
recipient is required to issue invoice as per section 31(3)(f) of CGST Act and pay the tax in cash on
the same under RCM.
3.4 Section 16(4) of CGST Act, as amended vide the Finance Act, 2022, deals with time limit to
avail ITC, and is reproduced below-
“A registered person shall not be entitled to take input tax credit in respect of any invoice or
debit note for supply of goods or services or both after the thirtieth day of November following the
end of financial year to which such invoice or debit note pertains or furnishing of the relevant
annual return, whichever is earlier.”
The said section 16(4), before the said amendment vide the Finance Act, 2022, provided as
follows:
“A registered person shall not be entitled to take input tax credit in respect of any invoice or
debit note for supply of goods or services or both after the due date of furnishing of the return under
section 39 for the month of September following the end of financial year to which such invoice or
debit note pertains or furnishing of the relevant annual return, whichever is earlier.”
3.5 It can be seen that section 16(4) of CGST Act links the time limit for ITC availment with the
financial year to which the invoice or debit note pertains. As discussed above, in case of supplies
where the supplier is unregistered and recipient is registered and the tax has to be paid by the recipient
on RCM basis, the recipient is required to issue invoice in terms of the provisions of section 31(3)(f)
of CGST Act and to pay the tax in cash on the same under RCM. Further, as discussed above, ITC
cannot be availed by a registered person in respect of any supply of goods or services or both received
by him, as per the provisions of section 16(2)(a) of CGST Act, unless he is in possession of a tax
invoice or debit note or such other tax paying documents as may be prescribed.
3.6 A combined reading of the above provisions leads to a conclusion that as ITC can be availed
by the recipient only on the basis of invoice or debit note or other duty paying document, and as in
case of RCM supplies received by the recipient from unregistered supplier, invoice has to be issued by
the recipient himself, the relevant financial year, to which invoice pertains, for the purpose of time
limit for availment of ITC under section 16(4) of CGST Act in such cases shall be the date of issuance
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of such invoice. In cases, where the recipient issues the said invoice after the time of supply of the
said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of
tax.
4 The matter was deliberated by the Law Committee in its meeting held on 20.12.2023. The
Law Committee recommended to issue a clarification by way of a circular stating that in cases of
supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse
charge mechanism (RCM) and where invoice is to be issued by the recipient of the supplies in
accordance with section 31(3)(f) of CGST Act, the relevant financial year for calculation of time limit
for availment of input tax credit under the provisions of section 16(4) of CGST Act will be the
financial year in which the invoice has been issued by the recipient under section 31(3)(f) of CGST
Act, subject to payment of tax on the said supply by the recipient and fulfilment of other conditions
and restrictions of section 16 and 17 of CGST Act. In case, the recipient issues the invoice after the
time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such
delayed payment of tax. Further, in cases of such delayed issuance of invoice by the recipient, he may
also be liable to penal action under the provisions of Section 122 of the CGST Act. Draft circular
recommended by the Law Committee is enclosed with the agenda note as Annexure A.
5. Accordingly, the agenda is placed for approval of the Council.
*****
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Annexure A
Circular No. …../…/2023-GST
F. No. CBIC-XX/XX/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, Dated the XX December, 2023
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners
of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM
supplies received from unregistered persons – Reg.
Representations have been received from trade and industry seeking clarity on the
applicability of time limit specified under section 16(4) of Central Goods & Services Tax Act, 2017
(hereinafter referred to as the CGST Act) for the purpose of availment of input tax credit (ITC) by the
recipient on the tax paid by him under reverse charge mechanism (RCM) in respect of supplies
received from unregistered persons. It has been represented that in some cases, where tax is payable
on reverse charge basis by the recipient, such as, where an activity is performed by the overseas
related person for the entity located in India and no consideration is involved, such an activity may not
be considered as supply of services by the concerned recipient in India as and accordingly, no invoice
is issued as well as no tax is paid by the said recipient under RCM in respect of the same. However,
later on, either on their own on the basis of some clarification issued by the department or on the basis
of some court judgement or on being pointed out by the tax authorities during scrutiny or audit or
otherwise, the said recipient issues the invoice and pays the tax under RCM, along with interest, and
claims input tax credit on such tax paid.
1.2 It has been represented that some of the field formations are taking the view that in such
cases, for the purpose of section 16(4) of CGST Act, the relevant year of the invoice for the purpose
of section 16(4) of CGST Act is the year in which the said supply was received and accordingly, the
time limit for availment of ITC under section 16(4) of CGST Act is only upto the September/
November of the following financial year, i.e. the financial year following the financial year in which
the said services was received. On the other hand, industry has represented that as the self-invoice in
respect of such supplies received from unregistered supplier, where tax has to be paid by the recipient
on RCM basis, is to be issued by the recipient as per section 31(3)(f) of CGST Act, the relevant year
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of invoice for the purpose of section 16(4) of CGST Act is the financial year in which such invoice
has been issued and accordingly, ITC can be availed on the said invoice under section 16(4) of CGST
Act till the September/ November of the financial year following the financial year in which such
invoice has been issued. Request has been made to issue clarification in the matter to avoid litigation.
2. The matter has been examined. In order to ensure uniformity in the implementation of the
provisions 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 and as follows:
2.1 As per section 16(2)(a) of CGST Act, no registered person shall be entitled to the credit of
any input tax in respect of any supply of goods or services or both to him unless he is in possession of
a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying
documents as may be prescribed.
2.2 Rule 36(1)(b) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the
CGST Rules) prescribes that input tax credit shall be availed by a registered person inter alia on the
basis of an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of section
31 of CGST Act, subject to the payment of tax.
2.3 Further, clause (f) of sub-section (3) of section 31 of CGST Act provides that a registered
person, who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, shall issue an
invoice in respect of goods or services or both received by him from the supplier who is not registered
on the date of receipt of goods or services or both. Accordingly, where the supplier is unregistered and
recipient is registered, and the recipient is liable to pay tax on the said supply on RCM basis, the
recipient is required to issue invoice as per section 31(3)(f) of CGST Act and pay the tax in cash on
the same under RCM.
2.4 Section 16(4) of CGST Act, as amended vide the Finance Act, 2022, deals with time limit to
avail ITC, and is reproduced below-
“A registered person shall not be entitled to take input tax credit in respect of any invoice or
debit note for supply of goods or services or both after the thirtieth day of November following the
end of financial year to which such invoice or debit note pertains or furnishing of the relevant
annual return, whichever is earlier.”
Section 16(4) of CGST Act, before the said amendment vide the Finance Act, 2022, provided
as follows:
“A registered person shall not be entitled to take input tax credit in respect of any invoice or
debit note for supply of goods or services or both after the due date of furnishing of the return under
section 39 for the month of September following the end of financial year to which such invoice or
debit note pertains or furnishing of the relevant annual return, whichever is earlier.”
2.5 It can be seen that section 16(4) of CGST Act links the time limit for ITC availment with the
financial year to which the invoice or debit note pertains. As discussed in Para 2.3 above, in case of
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supplies where the supplier is unregistered and recipient is registered and the tax has to be paid by the
recipient on RCM basis, the recipient is required to issue invoice in terms of the provisions of section
31(3)(f) of CGST Act and pay the tax on the same in cash under RCM. Further, as discussed in Para
2.1 above, ITC cannot be availed by a registered person in respect of any supply of goods or services
or both received by him, as per the provisions of section 16(2)(a) of CGST Act, unless he is in
possession of a tax invoice or debit note or such other tax paying documents as may be prescribed.
2.6 A combined reading of the above provisions leads to a conclusion that as ITC can be availed
by the recipient only on the basis of invoice or debit note or other duty paying document, and as in
case of RCM supplies received by the recipient from unregistered supplier, invoice has to be issued by
the recipient himself, the relevant financial year, to which invoice pertains, for the purpose of time
limit for availment of ITC under section 16(4) of CGST Act in such cases shall be the date of issuance
of such invoice only. In cases, where the recipient issues the said invoice after the time of supply of
the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment
of tax.
2.7 Accordingly, it is clarified that in cases of supplies received from unregistered suppliers,
where tax has to be paid by the recipient under reverse charge mechanism (RCM) and where invoice
is to be issued by the recipient of the supplies in accordance with section 31(3)(f) of CGST Act, the
relevant financial year for calculation of time limit for availment of input tax credit under the
provisions of section 16(4) of CGST Act will be the financial year in which the invoice has been
issued by the recipient under section 31(3)(f) of CGST Act, subject to payment of tax on the said
supply by the recipient and fulfilment of other conditions and restrictions of section 16 and 17 of
CGST Act. In case, the recipient issues the invoice after the time of supply of the said supply and pays
tax accordingly, he will be required to pay interest on such delayed payment of tax. Further, in cases
of such delayed issuance of invoice by the recipient, he may also be liable to penal action under the
provisions of Section 122 of CGST Act.
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 please be brought to the
notice of the Board. Hindi version would follow.

Sanjay Mangal
Principal Commissioner (GST)
Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xvii): Clarification in case of taxability of corporate guarantee provided
between related persons after insertion of Rule 28(2) of CGST Rules, 2017.
1. Background:
1.1 As per the recommendations of the GST Council made in its 52nd meeting, sub-rule (2) was
inserted in Rule 28 of CGST Rules, 2017 vide notification No. 52/2023-Central Tax dated 26th
October, 2023 to provide for a specific clause for valuation of supply of services of providing
corporate guarantee to any banking company or financial institution by an entity on behalf of a related
person.
The said provision is reproduced as below:
28. Value of supply of goods or services or both between distinct or related persons, other
than through an agent. -
(1) The value of the supply of goods or services or both between distinct persons as specified
in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other
than where the supply is made through an agent, shall-
(a) be the open market value of such supply;
(b) if the open market value is not available, be the value of supply of goods or services of
like kind and quality;
(c) if the value is not determinable under clause (a) or (b), be the value as determined by
the application of rule 30 or rule 31, in that order:
Provided that where the goods are intended for further supply as such by the recipient, the
value shall, at the option of the supplier, be an amount equivalent to ninety percent of the
price charged for the supply of goods of like kind and quality by the recipient to his customer
not being a related person:
Provided further that where the recipient is eligible for full input tax credit, the value
declared in the invoice shall be deemed to be the open market value of the goods or services.;
(2) Notwithstanding anything contained in sub-rule (1), the value of supply of services
by a supplier to a recipient who is a related person, by way of providing corporate
guarantee to any banking company or financial institution on behalf of the said recipient,
shall be deemed to be one per cent of the amount of such guarantee offered, or the actual
consideration, whichever is higher.

1.2 Besides, Circular No. 204/16/2023-GST dated 27th October, 2023 was also issued, as per the
recommendations of the GST Council, to provide clarity regarding the applicability of the said sub-
rule.

2. In this regard, various representations have been received from trade and industry, raising
some issues arising consequent to the insertion of the said sub-rule (2) of Rule 28 of CGST Rules,
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2017, and also seeking further clarifications on the issue of taxability and valuation of the supply of
services of providing corporate guarantee between related persons.

3. Analysis:
3.1 The issues raised by the trade have been examined and analysed as below:
A. Issues requiring amendment in the rules:
3.2. Issue 1: Whether the discharge of tax liability on corporate guarantee at 1% of
such guarantee offered is to be done one time or on yearly basis or on a monthly
basis and when issued for a fixed term of say, five years or ten years as per tenure of
the loan?
3.2.1 In this regard, it is to mention that under Rule 10TD pertaining to Safe
Harbour under Income Tax Rules, 1962, for providing corporate guarantee in eligible
international transactions, the minimum acceptable commission/ fee is one per cent per
annum of the amount guaranteed.
3.2.2 The Law Committee deliberated on the issue in its meeting held on
24.01.2024. Law Committee recommended that rule 28(2) of CGST Rules may be
amended to clearly provide that the deemed valuation created by the said rule, i.e., one
per cent of the amount guaranteed, shall be applicable per annum. Thus, the value of
supply of the service of providing corporate guarantee to a banking company or a
financial institution on behalf of a related recipient for a particular number of years shall
be one per cent of the amount of such guarantee offered multiplied by the number of
years for which the said guarantee is offered or the actual consideration, whichever is
higher.
3.2.3 In cases where the corporate guarantee is provided for a period less than a
year, say 6 months (half a year), then in those cases as well, the valuation may be done on
proportionate basis for the said period, i.e., in this case, the value of the said supply of
services may be taken as half of one per cent of the amount of such guarantee offered
(6/12 * one per cent), or the actual consideration, whichever is higher.

3.2.4 It was also recommended by the Law Committee that the issue may be
clarified through an illustration in a Circular that, if a corporate guarantee is issued for a
period of say five years, then the value of such guarantee is to be calculated at one per
cent per year of the amount of such guarantee offered, or the actual consideration,
whichever is higher, i.e., the value of such corporate guarantee provided would be 5% of
the amount guaranteed or the actual consideration, whichever is higher. Therefore, GST
would be payable on such amount, i.e., 5% of the amount guaranteed or the actual
consideration, whichever is higher, at the time of supply applicable for issue of such
corporate guarantee. However, if the corporate guarantee is issued, for a period of one
year and is renewed five times, for a period of one year each, then tax would be payable
on one per cent of the amount of such guarantee offered, or the actual consideration,
whichever is higher, on the issue of such corporate guarantee in the first year as well as
on every renewal in subsequent years.

3.3 Issue 2: Due to non-obstante clause in sub-rule (2) of Rule 28 of CGST
Rules, 2017, overriding the provisions of sub-rule (1), the benefit of second proviso
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to sub-rule (1), is not applicable to the supply of services of providing corporate
guarantee between related persons, i.e., even though full ITC is available to the
recipient, the tax has to be paid on the said supply on the basis of 1% of the amount
of the corporate guarantee of the actual consideration, whichever is higher. This has
created a non-level playing field for the supply of service of providing corporate
guarantee. Requests have been made to restore the level playing field by providing
the benefit of second proviso to sub-rule (1) to the supply of corporate guarantee as
well.
3.3.1 Second proviso to Rule 28(1) of CGST Rules, 2017 reads as follows,
“Provided further that where the recipient is eligible for full input tax credit,
the value declared in the invoice shall be deemed to be the open market value of the
goods or services.”
3.3.2 Sub-Rule (2) of Rule 28 of the CGST Rules, 2017 starts with the phrase
‘Notwithstanding anything contained in sub-rule (1)’.
3.3.3 Resultantly, the benefit of the second proviso to Rule 28(1) of CGST Rules,
2017 is not available for the supply of services of providing corporate guarantee between
related persons.
3.3.4 The Law Committee in its meeting held on 24.01.2024 recommended that
sub-rule (2) of Rule 28 of CGST Rules, 2017 may be amended to provide a level playing
field between the services of providing corporate guarantee between related persons, and
all other supplies by inserting the words “except the second proviso of the said sub-rule,”
after the words “Notwithstanding anything contained in sub-rule (1),”.

3.4 Issue 3: In cases where the corporate guarantee is provided by an Indian entity
for its related overseas entity, i.e., in cases of export of the service of providing
corporate guarantee between related persons, there can be situations where
valuation of guarantee, according to transfer pricing agreement is agreed at a value
less than 1% of the guarantee offered (say 0.9%). In such cases also, as per Rule
28(2) of CGST Rules, 2017, the value of corporate guarantee will be deemed to be
1% under GST. However, Indian entity will not receive the differential fee (i.e.,
0.1%) from its overseas group company, that is the amount received will be lower
than the consideration agreement on account of transfer pricing adjustments. On
jointly reading of Section 2(6) and Section 16 of the IGST Act, 2017 along with the
Rule 28(2) of CGST Rules, 2017, only 0.9% value of the amount guaranteed will be
considered as export of services and the balance 0.1% will not be considered as
export, and becomes a cost to the company. Therefore, requests have been made to
exempt the export of service of providing corporate guarantee between related
person from the requirement of Rule 28(2) of CGST Rules, 2017.
3.4.1 Law Committee in its meeting on 24.01.2024 noted that the above was not
the intent of the said sub-rule to deny benefit of export of services of providing corporate
guarantee between related persons because of valuation of the said supply of the said
services. Therefore, in order to provide a level-playing field and to remove the above
anomaly, Law Committee recommended that the applicability of the sub-rule (2) of Rule
28 of CGST Rules, 2017 may be restricted only to those supplies where recipient is
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located in India, by amending Rule 28(2) of CGST Rules, by inserting “located in India”
after the words “a recipient who is a related person”.

3.5 Accordingly, Law Committee recommended that sub-rule (2) of rule 28 of
CGST Rules, 2017 may be amended as below:
28. Value of supply of goods or services or both between distinct or related persons,
other than through an agent. -
(1) …
(2) Notwithstanding anything contained in sub-rule (1), except the second proviso of
the said sub-rule, the value of supply of services by a supplier to a recipient who is a
related person located in India, by way of providing corporate guarantee to any
banking company or financial institution, on behalf of the said recipient, shall be
deemed to be one per cent of the amount of such guarantee offered per annum, or the
actual consideration, whichever is higher.

3.6 Law Committee also recommended that the above amendment in sub-
rule (2) of rule 28 of CGST Rules, 2017 may be made retrospectively with effect from
26th October 2023 (i.e., the date from which the provisions of sub-rule (2) of Rule 28
have come into effect).

B. Issues requiring clarification:

3.7 Issue 4: Whether notification No. 52/2023-Central Tax dated 26th October, 2023
will apply to the corporate guarantees issued prior to this notification? Where
corporates have issued intra-group corporate guarantees before 26th October 2023,
which are still in force today, would they be liable to pay GST on “1% of the
amount of such guarantee offered” on such guarantees?

3.7.1 The supply of service of providing corporate guarantee to any banking
company or financial institution by a supplier to a related recipient, on behalf of the said
recipient, was taxable even before the issuance of notification No. 52/2023-CT dated 26th
October, 2023. Rule 28(2) of CGST Rules, 2017 is only for the determination of the
value of the taxable supply and not regarding the taxability of the said supply itself. Prior
to the insertion of the said sub-rule, i.e., before 26th October, 2023, the valuation of
service of providing corporate guarantee to any banking company or financial institution
by a supplier to a related recipient, on behalf of the said recipient, was to be done as per
the provisions of Rule 28 of CGST Rules, as it existed then.

3.7.2 Therefore, Law Committee recommended that in respect of supply of
services of providing corporate guarantee between related persons, in respect of corporate
guarantee issued or renewed before 26th October 2023, the valuation of the said supply is
to be done in accordance with Rule 28, as it existed during that time. However, if the
corporate guarantee is issued or renewed on or after 26th October 2023, then the valuation
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of the said supply will be required to be done as per Rule 28(2) of CGST Rules, 2017.
The same may be clarified through a Circular.


3.8 Issue 5: In cases where the corporate guarantee is provided for a
particular amount, whereas the loan is only partly availed or not availed at all by
the recipient, what will be the value of supply of corporate guarantee, and whether
the recipient would be eligible to avail full ITC (Input Tax Credit) until total loan is
disbursed?

3.8.1 The activity of supply of the service of providing a corporate guarantee is not
linked with the activity of amount of availment of loan. The service that is provided by
the guarantor to the guarantee is that of taking on the risk of default.

3.8.2 The Law Committee accordingly recommended that it may be clarified
through a circular that the value of supply of the service of providing a corporate
guarantee will be calculated based on the amount guaranteed and will not be based on the
amount of loan actually disbursed to the recipient of the corporate guarantee. It may also
be clarified that the recipient of the service of the corporate guarantee is eligible to avail
the ITC, subject to other conditions specified in the Act and the Rules made thereunder,
irrespective of when the loan is actually disbursed to the recipient, and irrespective of the
amount of loan actually disbursed.


3.9 Issue 6: In the case of takeover of existing loans, since there is merely an
assignment of an already issued corporate guarantee, whether GST would be
applicable again?

3.9.1 In the service of providing corporate guarantee to any banking company or
financial institution by a supplier to a related recipient, on behalf of the said recipient, the
supplier of the service is the corporate entity providing the corporate guarantee and the
recipient is the related entity for which the corporate guarantee is provided by the said
supplier.

3.9.2 Therefore, if the loan issued by the banking company/ financial institution is
taken over by another banking company/ financial institution, the same does not fall
under the service of providing corporate guarantee to any banking company or financial
institution by a supplier to a related recipient. Therefore, Law Committee recommended
clarifying that in such cases, there will be no impact on GST, unless there is issue of fresh
corporate guarantee or there is a renewal of the existing corporate guarantee. In cases
where fresh corporate guarantee is issued as a result of such taking over of the loans, then
the GST would be applicable on the same.

3.10 Issue 7: Where corporate guarantee is provided by more than one entity/ co-
guarantors, what is the amount on which GST is payable by each co-guarantor?

3.10.1 In cases where the corporate guarantee is being provided by multiple related
entities, the value of such services of providing corporate guarantee shall be the sum of
the actual consideration paid/ payable to co-guarantors, if it is higher than one per cent of
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the amount of such guarantee offered. In cases where the sum of the actual consideration
is less than one per cent of the amount of such guarantee offered, then GST shall be
payable by each co-guarantor proportionately on one per cent of the amount guaranteed
by them.

3.10.2 For instance, if there are two co-guarantors, A and B, who jointly provide a
corporate guarantee to a banking/ financial institution on behalf a related recipient C for
Rs. 1 crore, then A and B shall each pay GST on 0.5% of the amount guaranteed.

3.10.3 However, if in the above case of A and B providing corporate guarantee
jointly to a banking/ financial institution on behalf a related recipient C for Rs 1 crore, A
provides guarantee for 60% of the guarantee amount and B provides guarantee for the
remaining 40% of the guarantee amount, then GST shall be payable by A and B
proportionately i.e., 0.6% and 0.4% of the amount guaranteed. This is to say that A shall
pay GST on 1% of the amount guaranteed by A, i.e., 1% on Rs. 60 lakhs and B shall pay
GST on 1% of the amount guaranteed by B, i.e., 1% on Rs. 40 lakhs.

3.10.4 Law Committee recommended to clarify the issue on the above lines through the
circular.


3.11 Issue 8: Where domestic corporates issue intra-group guarantees, whether
GST may be paid by the recipient under reverse charge, as in the absence of actual
invoice and payment, the recipient entity would not be able to claim input tax credit
of tax paid by the domestic guarantor?

3.11.1 In cases where domestic corporates issue intra-group guarantees, GST is to
be paid under forward charge mechanism, and invoice is to be issued by the supplier of
the service of providing corporate guarantee to the related recipient under Section 31 of
CGST Act, 2017, read along with the relevant rules. However, in cases where such
guarantee is provided by the foreign/ overseas entity for a related entity located in India,
then GST would be payable under reverse charge mechanism, by the recipient of service,
i.e., the related entity located in India. Law Committee recommended that the same may
be clarified through the Circular.

4. The draft circular, as recommended by the Law Committee, in respect of various issues
discussed above, is enclosed as Annexure-A with this agenda.

5. Accordingly, the agenda is placed before the GST Council for approval.
Agenda for 53rd GSTCM Volume 1
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Annexure-A
Circular No. XX/XX/2024-GST

F. No. CBIC-20016/23/2023 - GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification on various issues pertaining to taxability and valuation of supply
of services of providing corporate guarantee between related persons.

1.1 As per the recommendations of the GST Council, sub-rule (2) was inserted in Rule 28 of
Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”) vide
Notification No. 52/2023-Central Tax dated 26th October, 2023 to provide for a specific clause for
valuation of supply of services of providing corporate guarantee to any banking company or financial
institution by an entity on behalf of a related person. Besides, Circular No. 204/16/2023-GST dated
27th October, 2023 was also issued as per the recommendations of the GST Council, to provide
clarity regarding the applicability of the said sub-rule. Subsequently, based on the recommendations
of the GST Council, sub-rule (2) of Rule 28 of CGST Rules has been amended retrospectively with
effect from 26.10.2023 vide Notification No. XXX dated XXX.
1.2 In this regard, various representations have been received from trade and industry, seeking
clarifications on various issues pertaining to the taxability and valuation of the supply of services of
providing corporate guarantee between related persons as per the said rule.

2. Therefore, in order to ensure uniformity in the implementation of the provisions of law
across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the
Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies
the issues as under:


S. No. Issue Clarification
1 Whether sub-rule (2) of rule 28 of
CGST Rules will apply to the
It is to be clarified that the supply of service of
providing corporate guarantee to any banking
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corporate guarantees issued prior
to insertion of the said sub-rule on
26th October 2023? Also, where
intra-group corporate guarantees
have been issued before 26th
October 2023, which are still in
force today, would they be liable
to pay GST on “1% of the amount
of such guarantee offered” on
such guarantees?
company or financial institution by a supplier to a
related recipient, on behalf of the said recipient, was
taxable even before the insertion of sub-rule (2) in rule
28 of CGST Rules with effect from 26th October,
2023. Rule 28(2) of CGST Rules, 2017 is only for the
determination of the value of the taxable supply of
providing corporate guarantee to any banking
company or financial institution by a supplier to a
related recipient, on behalf of the said recipient and
not regarding the taxability of the said supply itself.
Prior to the insertion of the said sub-rule, i.e., before
26th October, 2023, the valuation of service of
providing corporate guarantee to any banking
company or financial institution by a supplier to a
related recipient, on behalf of the said recipient, was to
be done as per the provisions of Rule 28 of CGST
Rules, as it existed then.

Therefore, in respect of supply of services of
providing corporate guarantee between related
persons, in respect of corporate guarantee issued or
renewed before 26th October 2023, the valuation of the
said supply is to be done in accordance with Rule 28,
as it existed during that time. However, if the
corporate guarantee is issued or renewed on or after
26th October 2023, then the valuation of the said
supply will be required to be done as per Rule 28(2) of
CGST Rules, 2017.
2 In cases where the corporate
guarantee is provided for a
particular amount, whereas the
loan is only partly availed or not
availed at all by the recipient,
what will be the value of supply
of corporate guarantee. Also,
whether the recipient would be
eligible to avail full ITC (Input
Tax Credit) even before total loan
is disbursed?
The activity of supply of the service of providing a
corporate guarantee is not linked with the actual
disbursal of the loan. The service that is provided by
the guarantor to the guarantee is that of taking on the
risk of default. Therefore, it is clarified that the value
of supply of the service of providing a corporate
guarantee will be calculated based on the amount
guaranteed and will not be based on the amount of
loan actually disbursed to the recipient of the corporate
guarantee.

Similarly, it is also clarified that the recipient
of the service of providing corporate guarantee shall
be eligible to avail the ITC, subject to other conditions
specified in the Act and the Rules made thereunder,
irrespective of when the loan is actually disbursed to
the recipient, and irrespective of the amount of loan
actually disbursed.
3 In the case of takeover of existing
loans, since there is merely an
assignment of an already issued
corporate guarantee, whether GST
would be applicable again?
In the service of providing corporate guarantee to any
banking company or financial institution by a supplier
to a related recipient, on behalf of the said recipient,
the supplier of the service is the corporate entity
providing the corporate guarantee and the recipient is
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the related entity for whom the corporate guarantee is
provided by the said supplier.

Therefore, if the loan issued by the banking
company/ financial institution is taken over by another
banking company/ financial institution, the said
activity of taking over of the loan does not fall under
the service of providing corporate guarantee to any
banking company or financial institution by a supplier
to a recipient. Therefore, it is clarified that in such
cases, there will be no impact on GST, unless there is
issuance of fresh corporate guarantee or there is a
renewal of the existing corporate guarantee. However,
if the takeover of the loan is followed/ accompanied
by issuance of fresh corporate guarantee, then GST
would be payable on the same.
4 Where corporate guarantee is
provided by more than one entity /
co-guarantor, what is the amount
on which GST is payable by each
co-guarantor?
In cases where corporate guarantee is being
provided by multiple related entities, the value of such
services of providing corporate guarantee shall be the
sum of the actual consideration paid/ payable to co-
guarantors, if the said amount of total consideration is
higher than one per cent of the amount of such
guarantee offered. In cases where the sum of the actual
consideration is less than one per cent of the amount of
such guarantee offered, then GST shall be payable by
each co-guarantor proportionately on one per cent of
the amount guaranteed by them.

For instance, if there are two co-guarantors, A
and B, who jointly provide a corporate guarantee to a
banking/ financial institution on behalf a related
recipient C for Rs. 1 crore, then A and B shall each
pay GST on 0.5% of the amount guaranteed.

However, if in the above case of A and B
providing corporate guarantee jointly to a banking/
financial institution on behalf a related recipient C for
Rs 1 crore, A provides guarantee for 60% of the
guarantee amount and B provides guarantee for the
remaining 40% of the guarantee amount, then GST
shall be payable by A and B proportionately i.e., 0.6%
and 0.4% of the amount guaranteed. This is to say that
A shall pay GST on 1% of the amount guaranteed by
A, i.e., 1% on Rs. 60 lakhs and B shall pay GST on
1% of the amount guaranteed by B, i.e., 1% on Rs. 40
lakhs.
5 Where intra-group corporate
guarantee is issued, whether GST
may be paid by the recipient
under reverse charge, as in the
absence of actual invoice and
It is clarified that in cases where domestic corporates
issue intra-group guarantees, GST is to be paid under
forward charge mechanism, and invoice is to be issued
by the supplier of the service of providing corporate
guarantee to the related recipient under Section 31 of
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payment, the recipient entity may
not be able to claim input tax
credit of tax paid by the domestic
guarantor?
CGST Act, 2017 read along with the relevant rules.
However, in cases where such guarantee is
provided by the foreign/ overseas entity for a related
entity located in India, then GST would be payable
under reverse charge mechanism, by the recipient of
service, i.e., the related entity located in India.
6 Whether the discharge of tax
liability on corporate guarantee @
1% of such guarantee offered is to
be done one time or on yearly
basis or on a monthly basis and
when issued for a fixed term of
say, five years or ten years as per
tenure of the loan?
Rule 28(2) of CGST Rules has been amended
retrospectively with effect from 26th October 2023,
vide notification No. XX/2024 -CT dated xx.xx.2024.
Therefore, it is clarified that the value of supply
of the service of providing corporate guarantee to a
banking company or a financial institution on behalf of
a related recipient shall be one per cent of the amount
guaranteed per annum or the actual consideration,
whichever is higher.

Accordingly, the value of supply of the service
of providing corporate guarantee to a banking company
or a financial institution on behalf of a related recipient
for a particular number of years shall be one per cent of
the amount of such guarantee offered multiplied by the
number of years for which the said guarantee is offered
or the actual consideration whichever is higher.
In addition to the above, in cases where the
corporate guarantee is provided for a period less than a
year, say 6 months (half a year), then in those cases as
well, the valuation may be done on proportionate basis
for the said period, i.e., in this case, the value of the
said supply of services may be taken as half of one per
cent of the amount of such guarantee offered (6/12 *
one per cent), or the actual consideration, whichever is
higher.

To illustrate the same, if a corporate guarantee
is issued for a period of say five years, then the value
of such guarantee is to be calculated at one per cent
per year of the amount of such guarantee offered, or
the actual consideration, whichever is higher, i.e., the
value of such corporate guarantee provided would be
5% of the amount guaranteed or the actual
consideration, whichever is higher. Therefore, GST
would be payable on such amount at the time of
issuance of such corporate guarantee, i.e., 5% of the
amount guaranteed or the actual consideration,
whichever is higher.

However, if a corporate guarantee is issued,
say for a period of one year and is renewed five times,
for a period of one year each, then tax would be
payable on one per cent of the amount of such
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guarantee offered, or the actual consideration,
whichever is higher, on the issue of such corporate
guarantee in the first year as well as on every renewal
in subsequent years.
7 Whether the benefit of second
proviso to sub-rule (1), which
states that value declared in
invoice is deemed to be the open
market value in cases where full
input tax credit is available to the
recipient of services, is not
applicable in cases falling under
sub-rule (2)?
Rule 28(2) of CGST Rules, 2017 has been
amended retrospectively with effect from 26th October
2023, vide notification No. XX/2024 -CT dated
xx.xx.2024 to provide the benefit of second proviso to
sub-rule (1) of Rule 28 of CGST Rules to the supply
of service of corporate guarantees provided between
related persons. Accordingly, it is clarified that in
cases involving the supply of service of corporate
guarantees provided between related persons, where
full input tax credit is available to the recipient of
services, the benefit of provisions of second proviso to
sub-rule (1) of Rule 28 of CGST Rules, 2017 shall be
available for the purpose of valuation of the said
supply.
8 Whether the valuation in terms of
Rule 28(2) of CGST Rules will
apply to the export of the service
of providing corporate guarantee
between related persons?
As per the amendment done in sub-rule (2) of rule 28
of CGST Rules retrospectively w.e.f. 26th October,
2023 vide notification No. XX/2024 -CT dated
xx.xx.2024, the provisions of the said sub-rule will not
apply in cases where the recipient of the services of
providing corporate guarantee between related persons
is located outside India. Accordingly, the provisions of
the said sub-rule shall not apply to the export of the
services of providing corporate guarantee between
related persons.

3. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.

4. Difficulties, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)
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Agenda Item 3(xviii): Clarification on mechanism for providing evidence of compliance of
conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 in respect of post-sale discounts by the
suppliers.

References have been received from trade and industry that in cases where a discount is
given by the supplier to the recipient, subsequent to the supply of goods or services or both (post-sale
discount), by issuing a tax credit note under section 34 of the Central Goods And Services Tax Act,
2017 (hereinafter referred to as the CGST Act), the taxable value of the said supply can be reduced
by the supplier to the extent of discount as per Section 15(3)(b) of the CGST Act only if the recipient
of supply has proportionately reversed the input tax credit (ITC) in respect of the said discount.

1.1 It has been further represented that no system functionality is presently available on the
common portal to enable the supplier or the tax officers to verify electronically whether the recipient
has reversed the proportionate ITC in respect of such discount or not. Besides, no alternate
mechanism has been provided in CGST Act or CGST Rules or otherwise to enable the supplier as
well as the tax officers to verify such reversal of input tax credit by the recipient. In absence of such a
functionality or any other mechanism to verify such reversal of input tax credit by the recipient, the
field formations are raising demand on the suppliers alleging that they have failed to produce evidence
of compliance of Section 15(3)(b)(ii) of CGST Act.

2. GST provisions applicable:

2.1 Section 15(3) of the CGST Act, 2017 is as reproduced below:

“Section 15. Value of Taxable Supply.-
….……….
(3) The value of the supply shall not include any discount which is given-

(a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in
respect of such supply; and

(b) after the supply has been effected, if-

(i) such discount is established in terms of an agreement entered into at or before the time of such
supply and specifically linked to relevant invoices; and

(ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier
has been reversed by the recipient of the supply.
….…………………………………………………………………………………”

2.2 Section 34 of the CGST Act, 2017 is as reproduced below:

“Section 34. Credit and debit notes.-
(1) Where one or more tax invoices have been issued for supply of any goods or services or both
and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax
payable in respect of such supply, or where the goods supplied are returned by the recipient, or
where goods or services or both supplied are found to be deficient, the registered person, who has
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supplied such goods or services or both, may issue to the recipient one or more credit notes for
supplies made in a financial year containing such particulars as may be prescribed.

(2) Any registered person who issues a credit note in relation to a supply of goods or services or both
shall declare the details of such credit note in the return for the month during which such credit note
has been issued but not later than the thirtieth day of November following the end of the financial
year in which such supply was made, or the date of furnishing of the relevant annual return,
whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence
of tax and interest on such supply has been passed on to any other person.

(3) Where one or more tax invoices have been issued for supply of any goods or services or both and
the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax
payable in respect of such supply, the registered person, who has supplied such goods or services or
both, shall issue to the recipient one or more debit notes for supplies made in a financial
year containing such particulars as may be prescribed.

(4) Any registered person who issues a debit note in relation to a supply of goods or services or both
shall declare the details of such debit note in the return for the month during which such debit note
has been issued and the tax liability shall be adjusted in such manner as may be prescribed.

Explanation.-For the purposes of this Act, the expression "debit note" shall include a supplementary
invoice.”

3. Examination:

3.1 There are several promotional schemes which are offered by taxable persons to increase sales
volume and to attract new customers for their products. The implication of discounts on the
transaction value in GST is dealt in accordance with Section 15 of CGST Act, 2017 which governs
the value of supply of the particular transaction executed.

3.2 GST Act has not defined ‘discount’. However, discounts can be categorized broadly under two
types: –

3.2.1 Pre-sale discounts i.e. discounts which are given before or at the time of supply and recorded
in the invoice at the time of supply, like volume discount, special discount for making cash payment
etc.
3.2.2 Post- sale discounts i.e. discounts which are given after the sale has been effected like
discount offered for completing a sale target for a given financial year, discount for making payments
within a specified time period, etc.

3.3 Since, GST is leviable on a taxable supply on the transaction value, in cases, where discount is
offered by the supplier, the value of such discounts, which satisfy the conditions specified in Section
15(3) of CGST 2017, is allowed to be deducted from the taxable value.

3.4 As per the above provision, in case of discount offered before or at the time of supply, which is
mentioned on invoice by supplier, GST shall be leviable on net taxable value i.e. taxable value minus
discount. However, in respect of post-sale discount, the same shall not form part of the value of
supply only if it satisfies the following conditions:

i.Such discount is established in terms of an agreement entered into at or before the time of
such supply;
ii.Such discount must be specifically linked to the relevant invoices;
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iii.Input Tax Credit attributable to such discount on the basis of document issued by the supplier
has been duly reversed by the recipient.

3.5 It is worthwhile to mention that in case of credit notes issued under section 34 of CGST Act
in respect of post-sale discounts, for the purpose of reduction of taxable value to the extent of such
discounts, the statute places the responsibility on the supplier for ensuring that the ITC availed by the
recipient of supply has been reduced proportionately. However, there is no system functionality
available on the common portal to enable the supplier or the tax officer to verify the said condition of
reversal of proportionate input tax credit by the recipient. ITC may be reversed in the return in FORM
GSTR-3B by the recipient, however, the details of reversal of input tax credit are available in FORM
GSTR-3B only at summary level, and therefore, the details, as to whether ITC has been reversed by
the recipient in respect of particular credit note(s), are not available in the FORM GSTR-3B of the
recipient. Further, such details are also not made available to the supplier in any other manner.
Besides, no alternate mechanism/ procedure has been prescribed in CGST Rules or through a circular
for enabling either the supplier or the tax officer to verify the same. Therefore, the supplier has no
means to verify electronically through GST portal or through any alternate mechanism as to whether
the recipient has reversed the proportionate ITC or not. Similarly, tax officers are also finding it
difficult to verify the said details.

4. It is also mentioned that Hon’ble Rajasthan High Court in the matter of Hindustan Unilever
Ltd. v/s Union of India in D.B. Civil Writ Petition No. 13617 of 2023, has observed that the
validity of the provision of requirement of supplier to provide required evidence in terms of section
15(3)(b)(ii) of CGST Act, has been challenged more on workability as no suitable mechanism has
been prescribed in this regard. Therefore, the Hon’ble Court has directed learned counsel for Union of
India to place before the Court appropriate suggested mechanism in this regard. Similar instruction
has been given by the said High Court in the matter of Tata Motor Ltd. Versus Union of India in
D.B. Civil Writ Petition No. 19966 & 19967 of 2023.

5. It is, therefore, desirable that some mechanism/ functionality is developed on the common
portal by GSTN for enabling verification of such reversal of ITC by the recipients. One of the
mechanisms can be to provide for acceptance/ rejection of such credit notes by the recipients on the
portal. The tax liability of the supplier may be reduced only in the cases, where such credit notes have
been accepted by the recipients, and in such cases, tax input tax credit of the recipient may be
reduced/ reversed in hard lock manner on the portal in FORM GSTR-3B return. GSTN may also
explore any alternate functionality/ mechanism on the portal for enabling verification of such reversal
of ITC by the recipients.

5. However, development of such functionality on the portal may take some time. It is proposed
that in the meantime, till such a functionality is made available by GSTN on the common portal, we
may prescribe a suitable mechanism which can enable the supplier to provide required evidence in
terms of section 15(3)(b)(ii) of CGST Act. One such mechanism can be that the supplier may be asked
to procure a certificate from the recipient of supply, issued by the Chartered Accountant (CA) or the
Cost Accountant (CMA), certifying that the recipient has made the required proportionate reversal of
input tax credit in respect of such credit note issued by the supplier.
6.1 The said CA/CMA certificate may include details such as the details of the credit notes, the
details of the relevant invoice number against which the said credit note has been issued, the amount
of ITC reversal in respect of each of the said credit notes along with the details of the FORM GST
DRC -03/ return / any other relevant document through which such reversal of ITC has been made by
the recipient.
6.2 Such certificate issued by CA or CMA may also contain UDIN (Unique Document
Identification Number). UDIN of the certificate issued by CAs can be verified from ICAI website
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https://udin.icai.org/search-udin and that issued by CMAs can be verified from ICMAI website
https://eicmai.in/udin/VerifyUDIN.aspx.

7. However, as seeking CA/ CMA certificate even in respect of recipients, to whom a very small
amount of discount is given by the supplier during a financial year, may cause inconvenience to the
supplier as well as the concerned recipients in such cases involving small discounts, it is proposed that
in such cases, where the amount of tax (CGST+SGST+IGST and including compensation cess, if any)
involved in the discount given by the supplier to a recipient through tax credit notes in a Financial
Year is not exceeding Rs 5,00,000 (rupees five lakhs only), then instead of CA/CMA certificate, the
said supplier may procure an undertaking/ certificate from the said recipient that the said input tax
credit attributable to such discount has been reversed by him, along with the details mentioned in Para
6.1 above.

8. Such certificates issued by CA/CMA or the undertakings/ certificates issued by the recipient
of supply, as the case may be, shall be treated as a suitable and admissible evidence for the purpose of
section 15(3)(b)(ii) of the CGST Act, 2017. The supplier shall produce such certificates/undertakings
before the tax officers, if required, during any proceedings such as scrutiny, audit, investigations, etc.
Even for the past period, where ever any such evidence as per section 15(3)(b)(ii) of CGST Act in
respect of credit note issued by the supplier for post-sale discounts is required to be produced by him
to the tax authorities, the concerned taxpayer may procure and provide such certificates issued by
CA/CMA or the undertakings/ certificates issued by the recipients of supply, as the case may be, to
the concerned investigating/ audit/ adjudicating authority as evidence of requisite reversal of input tax
credit by his recipients.

9. Law Committee deliberated on the same in its meeting held on 18.03.2024 and recommended
that the issue may be clarified as above through a circular. The draft circular as recommended by the
Law Committee in this regard is enclosed as Annexure A.

10. The Agenda note along with the draft Circular is placed before the GST Council for
deliberation.
************














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ANNEXURE-A
Circular No. XX/XX/2024-GST

F. No. CBIC-20006/6/2024 - GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Mechanism for providing evidence of compliance of conditions of Section 15(3) (b) (ii)
of the CGST Act, 2017 by the suppliers -reg.

Representations have been received from the trade and the field formations stating that in
cases where the discounts are offered by the suppliers through tax credit notes, after the supply has
been effected, the value of the taxable supply shall not include the discount only if the condition of
clause (b)(ii) of sub-section (3) of section 15 of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as “CGST Act”), for reversal of the input tax credit attributable to the said
discount by the recipient is satisfied. Further, it has been represented that there is presently no facility
available to the supplier as well as the tax officers on the common portal to verify whether the input
tax credit attributable to the said discount has been reversed by the recipient or not. Request has been
made to provide a suitable mechanism for enabling the suppliers as well as tax officers to verify
fulfilment of the condition of section 15(3)(b)(ii) of the CGST Act regarding proportionate reversal of
input tax credit by the recipients in respect of such discounts given by the supplier by issuing tax
credit notes after the supply has been effected.
2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions
of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of
the CGST Act, hereby clarifies the issues as under:
2.1 Section 15 of the CGST Act provides for value of taxable supply of goods or services or both.
Sub-section (3) of the said section provides that the value of supply shall not include discount given
by the supplier, subject to certain conditions. As per clause (b) of the said sub-section, any discount
which is given after the supply has been effected shall not be included in the value of the supply only
if it satisfies the following conditions:
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i. Such discount is established in terms of an agreement entered into at or before the
time of such supply;
ii. Such discount must be specifically linked to the relevant invoices
iii. Input Tax Credit attributable to such discount on the basis of document issued by
the supplier has been duly reversed by the recipient.
2.2 Accordingly, wherever any discount is offered by the supplier to the recipient, by issuance of
a tax credit note as per section 34 of the CGST Act, after the supply has been effected, the said
discount can be excluded from the value of taxable supply only if the conditions of clause (b) of sub-
section (3) of section 15 of the CGST Act are fulfilled. Such conditions inter-alia includes the
requirement of reversal of input tax credit by the recipient attributable to the said discount.
2.3 However, there is no system functionality/ facility available on the common portal to enable
the supplier or the tax officer to verify the compliance of the said condition of proportionate reversal
of input tax credit by the recipient. Besides, no alternate mechanism/ procedure has been prescribed in
CGST Rules for enabling either the supplier or the tax officer to verify the same.
2.4 In view of the above, till the time a functionality/ facility is made available on the common
portal to enable the suppliers as well as the tax officers to verify whether the input tax credit
attributable to such discounts offered through tax credit notes has been reversed by the recipient or
not, the supplier may procure a certificate from the recipient of supply, issued by the Chartered
Accountant (CA) or the Cost Accountant (CMA), certifying that the recipient has made the required
proportionate reversal of input tax credit at his end in respect of such credit note issued by the
supplier.

2.5 The said CA/CMA certificate may include details such as the details of the credit notes, the
details of the relevant invoice number against which the said credit note has been issued, the amount
of ITC reversal in respect of each of the said credit notes along with the details of the FORM GST
DRC -03/ return / any other relevant document through which such reversal of ITC has been made by
the recipient.
2.6 Such certificate issued by CA or CMA shall contain UDIN (Unique Document Identification
Number). UDIN of the certificate issued by CAs can be verified from ICAI website
https://udin.icai.org/search-udin and that issued by CMAs can be verified from ICMAI website
https://eicmai.in/udin/VerifyUDIN.aspx.
2.7 In cases, where the amount of tax (CGST+SGST+IGST and including compensation cess, if
any) involved in the discount given by the supplier to a recipient through tax credit notes in a
Financial Year is not exceeding Rs 5,00,000 (rupees five lakhs only), then instead of CA/CMA
certificate, the said supplier may procure an undertaking/ certificate from the said recipient that the
said input tax credit attributable to such discount has been reversed by him, along with the details
mentioned in Para 2.5 above.

2.8 Such certificates issued by the CA/CMA or the undertakings/ certificates issued by the
recipient of supply, as the case may be, shall be treated as a suitable and admissible evidence for the
purpose of section 15(3)(b)(ii) of the CGST Act, 2017. The supplier shall produce such
certificates/undertakings before the tax officers, if required, during any proceedings such as scrutiny,
audit, investigations, etc. Even for the past period, where ever any such evidence as per section
15(3)(b)(ii) of CGST Act in respect of credit note issued by the supplier for post-sale discounts is
required to be produced by him to the tax authorities, the concerned taxpayer may procure and
Agenda for 53rd GSTCM Volume 1
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provide such certificates issued by CA/CMA or the undertakings/ certificates issued by the recipients
of supply, as the case may be, to the concerned investigating/ audit/ adjudicating authority as evidence
of requisite reversal of input tax credit by his recipients.

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 please be brought to the notice of
the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)

.
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Agenda Item 3(xix): Court matter regarding extending amnesty scheme for filing of appeals in
respect of cases under Section 129 and 130 of CGST Act.
1.1 Section 107(1) of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to as the ‘CGST Act’) provides that any person aggrieved with the order of the
Adjudicating Authority can file an appeal against such order before the Appellate Authority.
The said provisions also provide that such appeal shall be filed within a period of three
months from the date on which the order is communicated to such person.
"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."

1.2 Additionally, Section 107(4) of the CGST Act, 2017 empowers the Appellate
Authority to condone the delay in filing of appeal by the aggrieved person. However, the
Appellate Authority can condone such a delay only if sufficient cause is shown and the delay
is not beyond the period of one month from the actual due date.
“Section 107. Appeals to Appellate Authority. —
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by
sufficient cause from presenting the appeal within the aforesaid period of three months or
six months, as the case may be, allow it to be presented within a further period of one
month.

2.1 It was brought to the notice of the tax authorities that, many of the taxpayers came to
know about demand orders only upon initiation of recovery proceedings under section 79 of
the CGST Act, 2017 i.e., after lapse of time prescribed for filing of appeals.
2.2 The GST Council in its 52nd meeting held on 7th October 2023, recommended a one-
time relief to taxpayers for filing of appeals against demand orders passed till specified
period i.e., orders passed up to 31.3.2023, subject to the condition of payment of an amount
of pre-deposit of 12.5% of the tax under dispute by the said person, out of which at least
20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger.
Thereafter Notification No. 53/2023-CT dated 2nd November 2023 was issued, wherein the
following classes of persons were made eligible for the amnesty scheme for filing appeal up
to 31st January, 2024-
i. Taxable persons who could not file an appeal against the order passed by the proper
officer on or before the 31st day of March 2023 under section 73 or 74 of the said Act
within the time period specified in sub-section (1) of section 107 read with sub-
section (4) of section 107 of the said Act, and
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ii. Taxable persons whose appeal against the said order was rejected solely on the
grounds that the said appeal was not filed within the time period specified in section
107.
3.1 A writ petition was filed by M/s Risansi Industries Ltd. (No. 275 of 2021) in Hon'ble
High Court, Allahabad on the grounds that the notification only deals with the orders passed
under Section 73 and 74 of the Act and does not take into account the penalty provisions
under Section 129 and 130 of the Act.
3.2 In its order dated 24.01.2024, Hon'ble High Court, Allahabad has observed as
following-
' 4. Upon due consideration, I am of the view that this Court is not in a position to
issue a writ of mandamus directing the Central Government to include Section 129
and 130 of the Act in the said notification. However, I am of the view that the
Government can very well consider adding these two Sections in the said notification,
so that the benefit that has been provided for the orders passed under Section 73 and
74 of the Act can be extended to Section 129 and 130 of the Act.
5. In the light of the above, the Central Board of Indirect Taxes, Ministry of Finance,
is directed to look into this aspect of the matter at the earliest.'
4.1 Therefore, this matter was examined by the Law Committee. The Law Committee
was of the view that the said amnesty scheme was considered by the Council only in respect
of orders passed under Sections 73 and 74 of the CGST Act, on the basis that a number of
such orders under Sections 73 and 74 were issued online on the common portal, without any
physical serving to the taxpayers. In a number of such cases, the common portal was not
accessed by the taxpayers and hence taxpayers were not aware of the notices/ orders issued to
them through the common portal. It was brought to the notice of the tax authorities that many
of the taxpayers came to know about demand orders only upon initiation of recovery
proceedings under section 79 of the CGST Act, 2017 i.e., after lapse of time prescribed for
filing of appeals. Accordingly, a one-time opportunity was recommended by the Council to
provide relief to the taxpayers to file appeal in such cases.
4.2 Law Committee also felt that this rationale would not be applicable to orders passed
under Sections 129 and 130 of the CGST Act, 2017, as those orders were relating to
confiscation/ seizure of goods and conveyances in transit, and essentially the taxpayers would
have had the knowledge of such orders being passed. Accordingly, Law Committee
recommended that there is no need to extend the scope of the amnesty scheme notified vide
Notification No 53/2023-Central Tax dated 02.11.2023, to include orders passed under
Sections 129 and 130 of the CGST Act.
4.3 As Hon’ble High Court, Allahabad has given direction to the Government to look into
matter at the earliest for considering adding Sections 129 and 130 in the said notification,
Law Committee recommended that the matter may be placed before GST Council.
5. Accordingly, the recommendations of the Law Committee as detailed in para 4 is
placed before the GST Council for approval.
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Agenda Item 3(xx): Amendment in Rules 110 and 111 of the CGST Rules, 2017 pertaining
to filing and processing of appeals in GST Appellate Tribunal.
Section 109 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST
Act’) provides for constitution of Appellate Tribunal and its Benches thereof. The operationalization of
GST Appellate Tribunal (GSTAT) is under process and the system based functionality for the GST
Appellate Tribunal [e-Tribunal for GST] is being developed by the GSTN.
2. Under the said system, every appeal (or application) is proposed to be filed electronically with
reference number connecting the Order-In-Original or Order-In-Appeal from the GSTN common portal.
The existing provision of filing of appeal “electronically or otherwise as may be notified by the
Registrar” before the Appellate Tribunal or the requirement of submission of a certified copy of the
order by the appellant to vouch for its authenticity in accordance with the existing rule 110 (and also
rule 111) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”)
does not seem to be in alignment with the system being developed.

3. The same was discussed in the meeting of the Law Committee held on 02.04.2024, 18.04.2024
and 16.05.2024. Law Committee recommended for amendment in rule 110 and rule 111 to align the
same with the business process as envisaged.
3.1 It may be noted in this regard that in respect of appeals filed before the first appellate authority,
amendments have already been carried out in rule 108 and rule 109 to align the same with the existing
practice vide Notification Nos. 26/2022-CT dated 26.12.2022, and 38/2023-CT dated 04.08.2023.

3.2 The Law Committee accordingly recommended to substitute existing rule 110 and rule 111 of
CGST Rules, 2017 with the following formulation (in red):
Rule 110:
“(1) An appeal to the Appellate Tribunal under sub-section (1) of section 112 shall be filed in
FORM GST APL-05, along with the relevant documents, electronically and provisional
acknowledgement shall be issued to the appellant immediately:
Provided that an appeal to the Appellate Tribunal may be filed manually in FORM GST APL-05,
along with the relevant documents, only if the Registrar allows the same by issuing a special or
general order to that effect, subject to such conditions and restrictions as specified in the said order,
and in such case, a provisional acknowledgement shall be issued to the appellant immediately.
(2) A memorandum of cross-objections to the Appellate Tribunal under sub-section (5) of section 112,
if any, shall be filed electronically in FORM GST APL-06:
Provided that the memorandum of cross-objections may be filed manually in FORM GST APL-06,
only if the Registrar allows the same by issuing a special or general order to that effect, subject to
such conditions and restrictions as specified in the said order.
(3) The appeal and the memorandum of cross objections shall be signed in the manner specified in
rule 26.
(4) Where the order appealed against is uploaded on the common portal, a final acknowledgement,
indicating appeal number, shall be issued in FORM GST APL-02 on removal of defects, if any, and
Agenda for 53rd GSTCM Volume 1
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the date of issue of the provisional acknowledgement shall be considered as the date of filing of
appeal under sub-rule (1):

Provided that where the order appealed against is not uploaded on the common portal, the appellant
shall submit or upload, as the case may be, a self-certified copy of the said order within a period of
seven days from the date of filing of FORM GST APL-05 and a final acknowledgement, indicating
appeal number, shall be issued in FORM GST APL-02 on removal of defects, if any, and the date of
issue of the provisional acknowledgment shall be considered as the date of filing of appeal:
Provided further that where the said self-certified copy of the order is submitted or uploaded after a
period of seven days from the date of filing of FORM GST APL-05, a final acknowledgement,
indicating appeal number, shall be issued in FORM GST APL-02 on removal of defects, if any, and the
date of submission or uploading of such self-certified copy shall be considered as the date of filing of
appeal.
Explanation.—For the purposes of this rule, the appeal shall be treated as filed only when the final
acknowledgement, indicating the appeal number, is issued.
(5) The fees for filing of appeal or restoration of appeal shall be one thousand rupees for every one
lakh rupees of tax or input tax credit involved or the difference in tax or input tax credit involved or
the amount of fine, fee or penalty determined in the order appealed against, subject to a maximum of
twenty five thousand rupees and a minimum of five thousand rupees:
Provided that the fees for filing of an appeal in respect of an order not involving any demand of tax,
interest, fine, fee or penalty shall be five thousand rupees.

(6) There shall be no fee for application made before the Appellate Tribunal for rectification of errors
referred to in sub-section (10) of section 112.”

Rule 111:
“(1) An application to the Appellate Tribunal under sub-section (3) of section 112 shall be filed in Form
GST APL-07, along with the relevant documents, electronically and a provisional acknowledgement
shall be issued to the appellant immediately.
Provided that an application to the Appellate Authority may be filed manually in FORM GST APL-07,
along with the relevant documents, only if the Registrar allows the same by issuing a special or general
order to that effect, subject to such conditions and restrictions as specified in the said order, and in such
case, a provisional acknowledgement shall be issued to the appellant immediately;
(2) A memorandum of cross-objections to the Appellate Tribunal under sub-section (5) of section 112,
if any, shall be filed electronically in FORM GST APL-06:
Provided that the memorandum of cross-objections may be filed manually in FORM GST APL-06,
only if the Registrar allows the same by issuing a special or general order to that effect, subject to
such conditions and restrictions as specified in the said order.
(3) The appeal and the memorandum of cross objections shall be signed in the manner specified in rule
26.
(4) Where the order appealed against is uploaded on the common portal, a final acknowledgement,
indicating appeal number, shall be issued in FORM GST APL-02 on removal of defects, if any, and
the date of issue of the provisional acknowledgement shall be considered as the date of filing of
appeal under sub-rule (1):
Agenda for 53rd GSTCM Volume 1
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Provided that where the order appealed against is not uploaded on the common portal, the appellant
shall submit or upload, as the case may be, a self-certified copy of the said order within a period of
seven days from the date of filing of FORM GST APL-07 and a final acknowledgment, indicating
appeal number shall be issued in Form GST APL-02 on removal of defects, if any, and the date of
issue of the provisional acknowledgment shall be considered as the date of filing of appeal.

Provided further that where the said self-certified copy of the order is submitted or uploaded after a
period of seven days from the date of filing of FORM GST APL-07, a final acknowledgement,
indicating appeal number, shall be issued in FORM GST APL-02 on removal of defects, if any, and the
date of submission or uploading of such self-certified copy shall be considered as the date of filing of
appeal.
Explanation.—For the purposes of this rule, the appeal shall be treated as filed only when the final
acknowledgement, indicating the appeal number, is issued.
Explanation.—For the purposes of rule 110 and 111, ‘Registrar’ shall mean a Registrar appointed by the
Government for this purpose, and shall include Joint Registrar, Deputy Registrar and Assistant
Registrar. ”
4. Law Committee in its meeting dated 16.05.2024 also deliberated on the fact that currently, in
CGST Rules, Rule 109C provides for an option to withdraw the appeal up to a specified stage before
the Order- in- Appeal is issued by the Appellate Authority. It was recommended by the Law
Committee that similar facility may also be provided for withdrawing appeals filed before the
Appellate Tribunal. Accordingly, it was recommended that a new Rule 113A and FORM GST
APL-05/07W may be inserted in CGST Rules as follows (in red), on lines of Rule 109C, for
withdrawing appeals before the Appellate Tribunal:
Rule 113A Withdrawal of Appeal or Application filed before the Appellate Tribunal
“113A. The appellant may, at any time before the issuance of the order under sub-section (1) of
section 113, in respect of any appeal filed in FORM GST APL-05 or any application filed in FORM
GST APL-07, file an application for withdrawal of the said appeal or the application, as the case may
be, by filing an application in FORM GST APL-05/07W:
Provided that where the final acknowledgment in FORM GST APL-02 has been issued, the
withdrawal of the said appeal or the application, as the case may be, would be subject to the approval
of the Appellate Tribunal and such application for withdrawal of the appeal or application, shall be
decided by the Appellate Tribunal within fifteen days of filing of such application:
Provided further that any fresh appeal or application, as the case may be, filed by the appellant
pursuant to such withdrawal shall be filed within the time limit specified in sub-section (1) or sub-
section (3) of section 112, as the case may be.”



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“FORM GST APL-05/07 W
[See rule 113A]
Application for Withdrawal of Appeal /Application filed before the Appellate Tribunal
1. GSTIN:
2. Name of Business (Legal) (in case appeal is filed under sub-section (1) of section 112)
3. Name and designation of the appellant (in case appeal is filed under sub-section (3) of section 112):
4. Order No.& Date:
5. ARN of the Appeal & Date:
6. Reasons for Withdrawal:
i. Acceptance of order of the First Appellate Authority.
ii. Acceptance of order of an Appellate Tribunal/ Court on similar subject matter
iii. Need to file appeal/application again after rectification of mistakes/omission in the filed
appeal/application
iv. Amount involved in appeal is less than the monetary limit fixed for Appeal as per
provisions of sub-section (2) of section 112
v. Amount involved in the application is less than the monetary limit fixed for application as
per the provisions of sub-section (1) of section 120
vi. Any other reason
7. Declaration (applicable in case appeal is filed under sub-section (1) of section 112):
I/We <Taxpayer Name> hereby solemnly affirm and declare that the information given herein is true
and correct to the best of my/ our knowledge and belief and nothing has been concealed therefrom.
Place:
Signature
Date: Name of Applicant /Applicant Officer
Designation/ Status.”

5. Law Committee also recommended that the header of the FORM GST APL-02 for providing
acknowledgment for submission of appeal by the registered person needs to be amended to include
reference to rule 110(1) and rule 111(1) so that the same Form is also applicable in respect of
acknowledgment of Appeal filed in the Tribunal. Accordingly, the following amendment (in red) was
recommended by the Law Committee in the header of FORM GST APL-02:

“ Form GST APL-02
[See Rules 108(3), and 109(2), 110(1) and 111(1)]

…………………………………………”
4. The Agenda Note is placed before the GST Council for deliberation and approval.
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Agenda Item 3(xxi): Clarification on taxability of re-imbursement of securities/shares as
ESOP/ESPP/RSU provided by a company to its employees
Representations have been received from the trade and various associations seeking
clarification on the applicability of GST on securities/shares of foreign holding company provided to
an employee of Indian subsidiary company as part of terms of contract of employment.

2. Background:
2.1 There are cases where the option for allotment of securities/shares of the foreign holding
company is provided by the Indian subsidiary company to their employees as part of the
compensation package by the said Indian subsidiary company as per terms of contract of employment.
In such cases, on exercising the option by the employees of Indian subsidiary company, the
securities/shares of foreign holding company are allotted directly to the concerned employees of
Indian subsidiary company, and the cost of such securities/shares is generally reimbursed by the
subsidiary company to the holding company.
2.2 This practice of utilizing securities/shares as a means of incentivizing their employees, is
commonly referred to as an Employee Stock Purchase Plan (ESPP) or Employee Stock Option Plan
(ESOP) or Restricted Stock Unit (RSU). Such specific terminology usage depends on the agreed-upon
compensation terms between the employer and the employee. ESPPs and ESOPs are typically
presented as 'options' granted to employees, whereas RSUs take the form of awards or rewards
contingent upon the employee meeting specific performance standards. Regardless of the terminology
used, the fundamental essence of the transaction remains the same i.e. the allocation of securities or
shares from the employer to employee as part of compensation package with the aim of motivating
enhanced performance.
2.3 As per the definition of supply under GST Act, securities are neither classified as supply of
goods nor as supply of services, and as per Schedule III of Section 7 of the CGST Act, 2017, the
services by an employee to the employer in the course of or in relation to his employment is neither
supply of goods nor supply of services under GST. At the same time, since the obligation of
providing securities as per the employment contract rests with the domestic subsidiary company
which in turn is fulfilled through the foreign holding company, doubts are being raised by some field
formations regarding the said transaction being in the nature of import of financial service by the
domestic subsidiary company from the foreign holding company, and being liable to be charged under
GST on reverse charge basis, as per entry 4 of Schedule I of the CGST Act, 2017. Therefore, there is a
need for clarification in the matter.

3. Relevant Legal Provisions:

3.1 As per Section 2(52) of the CGST Act, 2017, the term ‘goods’ means every kind of movable
property other than money and securities but includes actionable claim, growing crops, grass and
things attached to or forming part of the land which are agreed to be severed before supply or under a
contract of supply.

3.2 As per Section 2(102) of the CGST Act, 2017, the term ‘services’ means anything other
than goods, money and securities but includes activities relating to the use of money or its
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conversion by cash or by any other mode, from one form, currency or denomination, to another form,
currency or denomination for which a separate consideration is charged.
Further, Explanation to section 2(102) provides that the expression “services” includes
facilitating or arranging transactions in securities.
3.3 Section 7 of the CGST Act, 2017 describes Scope of supply.-
(1) For the purposes of this Act, the expression - "supply" includes-
(a) all forms of supply of goods or services or both such as sale, transfer, barter,
exchange, licence, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business,
(aa) the activities or transactions, by a person, other than an individual, to its
members or constituents or vice-versa, for cash, deferred payment or other valuable
consideration.
Explanation .-For the purposes of this clause, it is hereby clarified that,
notwithstanding anything contained in any other law for the time being in force or
any judgment, decree or order of any Court, tribunal or authority, the person and its
members or constituents shall be deemed to be two separate persons and the supply of
activities or transactions inter se shall be deemed to take place from one such person
to another;
(b) import of services for a consideration whether or not in the course or furtherance
of business; and
(c) the activities specified in Schedule I, made or agreed to be made without a
consideration;
(d)[****].
[(1A) where certain activities or transactions constitute a supply in accordance with
the provisions of sub-section (1), they shall be treated either as supply of goods or
supply of services as referred to in Schedule II.]
(2) Notwithstanding anything contained in sub-section (1),-
(a) activities or transactions specified in Schedule III; or
(b) such activities or transactions undertaken by the Central Government, a State
Government or any local authority in which they are engaged as public authorities,
as may be notified by the Government on the recommendations of the Council,
shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may,
on the recommendations of the Council, specify, by notification, the transactions that
are to be treated as -
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.”

3.4 As per Section 2 (11) of IGST Act, 2017, import of service means supply of any service
where––
(i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India.
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3.5 Definition of securities under clause (h) of section 2 of Securities Contracts (Regulation)
Act, 1956:
“securities” include— (i) shares, scrips, stocks, bonds, debentures, debenture stock or other
marketable securities of a like nature in or of any incorporated company or other body
corporate;
…………………………………”
3.6 Definition of body corporate under clause (11) of section 2 of The Companies Act, 2013:
“body corporate or corporation includes a company incorporated outside India, but does not
include— (i) a co-operative society registered under any law relating to co-operative
societies; and (ii) any other body corporate (not being a company as defined in this Act),
which the Central Government may, by notification, specify in this behalf.”

3.7 Entry 4 of Schedule I of CGST Act, 2017 states that the following activities are to be
considered as supply even if made without consideration:

“Import of services by a person from a related person or from any of his other establishments
outside India, in the course or furtherance of business.”

3.8 Entry 1 of Schedule III of CGST Act, 2017 states that following Activities or Transactions
shall be treated neither as a Supply of Goods nor a Supply of Services:
“ 1) Services by an employee to the employer in the course of or in relation to his
employment.”
4. Analysis:
4.1 It needs to be seen as to whether any taxable supply is involved in transfer of securities/
shares by the foreign holding company to the employees of domestic subsidiary company and more
specifically, as to whether the transfer of securities/shares from foreign holding company to the
employees of domestic subsidiary company can be considered as import of services by domestic
subsidiary company from the foreign holding company in the course or furtherance of business or
otherwise.

4.2 A transaction involving transfer of ESOP/ESPP/RSU to the employees of domestic subsidiary
by the foreign holding company appears to involve the following steps:
• The domestic subsidiary company gives option/ facility of ESOP/ESPP/RSU to its employees
as part of compensation package as per terms of employment.
• The employees exercise their stock options, either by purchasing shares at the grant price or
by holding the options until they vest.
• The foreign holding company of the domestic subsidiary company issues ESOP/ESPP/RSU,
which are securities/shares listed on the foreign stock exchange, to the employees of the
domestic subsidiary company.
• The foreign holding company transfers the shares directly to the employees of the subsidiary
company.
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• The domestic subsidiary company generally reimburses the cost of such shares to the foreign
holding company on cost-to cost basis either through an actual remittance or through an
equity transfer as prescribed by the relevant Indian Accounting Standard.
• The employees hold the shares and may sell them at a later date if they choose.

4.3 In the present case, there is a transaction of shares/securities from foreign holding company to
an employee of domestic subsidiary company. To attract GST on such transaction, there should be
“supply of goods or services” as per section 7 of CGST Act. However, Securities under GST Law are
considered neither goods nor services in terms of definition of “goods” under clause (52) of section 2
of CGST Act, 2017 and in terms of definitions of “services” under clause (102) of the said section.
Further, securities include ‘shares’ as per definition of “securities” under clause (h) of section 2 of
Securities Contracts (Regulation) Act, 1956. Accordingly, purchase or sale of securities/shares, in
itself, is neither a supply of goods nor a supply of services. Therefore, in the absence of such
transaction, falling under the supply of ‘goods’ or ‘services’ as per GST Act, GST is not leviable on
said transaction of sale/purchase/transfer of securities/shares.

4.4 Further, the companies offer ESOP/ESPP/RSU to their employees to motivate them to
perform better, and to retain the employees, by aligning the interest of employees with that of
company. Accordingly, the ESOP/ESPP/RSU is a part of remuneration of the employee by the
employer as per terms and conditions of employment contract. As per Schedule III of Section 7 of the
CGST Act, 2017, the services by an employee to the employer in the course of or in relation to his
employment are treated neither as supply of goods nor as supply of services. Therefore, GST is not
leviable on the compensation paid to the employee by the employer as per the terms of employment
contract which involve transfer of securities/shares of the foreign holding company to the employees
of domestic subsidiary company.

4.5 Further, the foreign holding company directly transfers the securities/shares to the employees
of the domestic subsidiary company on the direction of domestic subsidiary company. Reimbursement
of such securities/ shares is generally done by domestic subsidiary company to foreign holding
company on cost-to-cost basis i.e. equal to the market value of securities without any element of
additional fee, markup or commission. Since the said reimbursement by the domestic subsidiary
company to the foreign holding company is for transfer of securities/shares, which is neither goods
nor services, the same cannot be treated as import of services by the domestic subsidiary company
from the foreign holding company and hence does not appear to be liable to be charged under CGST
Act, 2017.

4.6 However, if the foreign holding company charges any additional fee, markup, or commission
from the domestic subsidiary company for issuing ESOP/ESPP/RSU to the employees of the domestic
subsidiary company, then the same shall be considered to be in nature of consideration for the supply
of services of facilitating/ arranging the transaction in securities/ shares by the foreign holding
company to the domestic subsidiary company. In this case, GST will be leviable on such amount of
the additional fee, markup, or commission, charged by the foreign holding company from the
domestic subsidiary for issuance of its securities/shares to the employees of the later. The GST shall
be payable by the domestic holding company on reverse charge basis on such import of services from
the foreign holding company.

4.7 Therefore, in the light of above, no supply of service appears to be taking place between a
foreign holding company and the domestic subsidiary company where the foreign holding company
issues ESOP/ESPP/RSU to the employees of domestic subsidiary company, and the domestic
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subsidiary company reimburses the cost of such securities/shares to the foreign holding company on
cost-to-cost basis. However, in cases where an additional fee, markup, or commission, is charged by
the foreign holding company from the domestic subsidiary company, over and above the cost of the
securities/shares, GST would be leviable on such amount of additional fee, markup, or commission
charged as consideration for the supply of services of facilitating/ arranging the transaction in
securities/ shares by the foreign holding company to the domestic subsidiary company. The GST shall
be payable by the domestic subsidiary company on reverse charge basis in such a case on the said
import of services.
5. Law Committee in its meeting held on 08.12.2023 deliberated on the same, and
recommended issue of a circular on the above lines. The draft circular as recommended by the Law
Committee is placed at Annexure-A.

6. Accordingly, the agenda is placed before the GST Council for approval.
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ANNEXURE-A
Circular No. XX/XX/2024-GST

F. No. CBIC-20006/24/2023-GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,
Subject: Clarification on taxability of ESOP/ESPP/RSU provided by a company to its
employees through its overseas holding company-reg.

Representations have been received from the trade and field formations seeking
clarification regarding the taxability of Employee Stock Option (ESOP)/Employee Stock Purchase
Plan (ESPP)/ Restricted Stock Unit (RSU) provided by a company to its employees.

2.1 It has been represented that some of the Indian companies provide the option to their
employees for allotment of securities/shares of their foreign holding company as part of the
compensation package as per terms of contract of employment. In such cases, on exercising the
option by the employees of Indian subsidiary company, the securities/shares of foreign holding
company are allotted directly to the concerned employees of Indian subsidiary company, and the cost
of such securities/shares is generally reimbursed by the subsidiary company to the holding company.

2.2 Doubts are being raised regarding taxability of such a transaction under GST, i.e. whether
such transfer of shares/ securities by the foreign holding company directly to the employees of the
Indian subsidiary company and subsequent re-imbursement of the cost of such shares/ securities by
the Indian subsidiary company to the foreign holding company can be considered as import of
financial services by the Indian subsidiary company from the foreign holding company and whether
the same can be considered as liable to GST in the hands of Indian subsidiary company on reverse
charge basis.

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3. In order to clarify the issue and to ensure uniformity in the implementation of the provisions
of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of
the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby
clarifies the issues as under.

4. Providing option of allotment of securities/shares by the companies to their employees is
being used by them as a means of incentivizing their employees and is commonly referred to as an
Employee Stock Purchase Plan (ESPP) or Employee Stock Option Plan (ESOP) or Restricted Stock
Unit (RSU). Such specific terminology usage depends on the agreed-upon compensation terms
between the employer and the employee. ESPPs and ESOPs are typically presented as 'options'
granted to employees, whereas RSUs take the form of awards or rewards contingent upon the
employee meeting specific performance standards. Regardless of the terminology used, the
fundamental essence of the transaction remains the same i.e. the allocation of securities or shares from
the employer to employee as part of compensation package with the aim of motivating enhanced
performance.

4.1 A transaction involving transfer of ESOP/ESPP/RSU to the employees of domestic subsidiary
by the foreign holding company appears to involve the following steps:
• The domestic subsidiary company gives option/ facility of ESOP/ESPP/RSU to its employees
as part of compensation package as per terms of employment.
• The employees exercise their stock options, either by purchasing shares at the grant price or
by holding the options until they vest.
• The foreign holding company of the domestic subsidiary company issues ESOP/ESPP/RSU,
which are securities/shares listed on the foreign stock exchange, to the employees of the
domestic subsidiary company.
• The foreign holding company transfers the shares directly to the employees of the subsidiary
company.
• The domestic subsidiary company generally reimburses the cost of such shares to the foreign
holding company on cost-to cost basis either through an actual remittance or through an
equity transfer as prescribed by the relevant Indian Accounting Standard.
• The employees hold the shares and may sell them at a later date if they choose.


4.2 The foreign holding company issues securities/shares as ESOP/SPP/RSU to the employees of
the domestic subsidiary company on the request of the said domestic subsidiary company. However,
Securities under GST Law are considered neither goods nor services in terms of definition of “goods”
under clause (52) of section 2 of CGST Act, 2017 and in terms of definition of “services” under
clause (102) of the said section. Further, securities include ‘shares’ as per definition of “securities”
under clause (h) of section 2 of Securities Contracts (Regulation) Act, 1956. Accordingly, purchase or
sale of securities/shares, in itself, is neither a supply of goods nor a supply of services. Therefore, in
the absence of such transaction, falling under the supply of ‘goods’ or ‘services’ as per GST Act, GST
is not leviable on said transaction of sale/purchase/transfer of securities/shares.

4.3 Further, the companies offer ESOP/ESPP/RSU to their employees to motivate them to
perform better, and to retain the employees, by aligning the interest of employees with that of
company. The ESOP/ESPP/RSU is a part of remuneration of the employee by the employer as per
terms of employment. As per Entry 1 of Schedule III of Section 7 of the CGST Act, 2017, the services
by an employee to the employer in the course of or in relation to his employment are treated neither as
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supply of goods nor as supply of services. Therefore, GST is not leviable on the compensation paid to
the employee by the employer as per the terms of employment contract which involve transfer of
securities/shares of the foreign holding company to the employees of domestic subsidiary company

4.4 The foreign holding company directly transfers the shares/securities to the employees of the
domestic subsidiary company on the request of the said domestic subsidiary company.
Reimbursement of such securities/ shares is generally done by domestic subsidiary company to
foreign holding company on cost-to-cost basis i.e. equal to the market value of securities without any
element of additional fee, markup or commission. Since the said reimbursement by the domestic
subsidiary company to the foreign holding company is for transfer of securities/shares, which is
neither in nature of goods nor services, the same cannot be treated as import of services by the
domestic subsidiary company from the foreign holding company and hence, is not liable to GST
under CGST Act, 2017.

4.5 However, if the foreign holding company charges any additional fee, markup, or commission
from the domestic subsidiary company for issuing ESOP/ESPP/RSU to the employees of the
domestic subsidiary company, then the same shall be considered to be in nature of consideration for
the supply of services of facilitating/ arranging the transaction in securities/ shares by the foreign
holding company to the domestic subsidiary company. In this case, GST will be leviable on such
amount of the additional fee, markup, or commission, charged by the foreign holding company from
the domestic subsidiary for issuance of its securities/shares to the employees of the later. The GST
shall be payable by the domestic holding company on reverse charge basis on such import of
services from the foreign holding company.

4.6 Accordingly, it is clarified that no supply of service appears to be taking place between the
foreign holding company and the domestic subsidiary company where the foreign holding company
issues ESOP/ESPP/RSU to the employees of domestic subsidiary company, and the domestic
subsidiary company reimburses the cost of such securities/shares to the foreign holding company on
cost-to-cost basis. However, in cases where an additional amount over and above the cost of
securities/shares is charged by the foreign holding company from the domestic subsidiary company
by whatever name called, GST would be leviable on such additional amount charged as
consideration for the supply of services of facilitating/ arranging the transaction in securities/ shares
by the foreign holding company to the domestic subsidiary company. The GST shall be payable by
the domestic subsidiary company on reverse charge basis in such a case on the said import of
services.

5. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.

6. Difficulty, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.


(Sanjay Mangal)
Principal Commissioner (GST)
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Agenda Item 3(xxii): Clarification on requirement of reversal of ITC in respect of balance
of taxable premium in cases of Life Insurance services after applying valuation rule.

Representations have been received from Life Insurance Corporation of India seeking
clarity as to whether the portion of the premium charged by the insurance company from the insured
person/ policy holder, which is not included in the taxable value as per sub-rule (4) of Rule 32 of
CGST Rules, 2017, can be treated as an exempt supply/ non-taxable supply and whether the input tax
credit availed in respect of the said amount is required to be reversed or not.

2. RELEVANT LAW PROVISIONS:

2.1 The definitions of exempt supply and non-taxable supply are reproduced below:
2.1.1 ‘exempt supply’ has been defined in Section 2(47) of the CGST Act, 2017 as follows:
2(47) “exempt supply” means 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.
2.1.2 ‘non-taxable supply’ has been defined in Section 2(78) of the CGST Act, 2017 as follows:
2(78) "non-taxable supply" means a supply of goods or services or both which is not leviable
to tax under this Act or under the Integrated Goods and Services Tax Act;
2.2 Further, reference is made to sub-section (1) and sub-section (2) of Section 17 of CGST Act,
2017, which are reproduced below:
“Section 17. Apportionment of credit and blocked credits.-
(1) Where the goods or services or both are used by the registered person partly for the
purpose of any business and partly for other purposes, the amount of credit shall be
restricted to so much of the input tax as is attributable to the purposes of his business.
(2) Where the goods or services or both are used by the registered person partly for effecting
taxable supplies including zero-rated supplies under this Act or under the Integrated Goods
and Services Tax Act and partly for effecting exempt supplies under the said Acts, the
amount of credit shall be restricted to so much of the input tax as is attributable to the said
taxable supplies including zero-rated supplies.
…………………………………………………………….”
2.3 Reference is also made to Rule 32(4) of CGST Rules, 2017 which is reproduced below:
“ 32(4) The value of supply of services in relation to life insurance business shall be,-
(a) the gross premium charged from a policy holder reduced by the amount allocated for
investment, or savings on behalf of the policy holder, if such an amount is intimated to the
policy holder at the time of supply of service;
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(b) in case of single premium annuity policies other than (a), ten per cent. of single premium
charged from the policy holder; or
(c) in all other cases, twenty five per cent. of the premium charged from the policy holder in
the first year and twelve and a half per cent. of the premium charged from the policy holder in
subsequent years:
Provided that nothing contained in this sub-rule shall apply where the entire premium paid by
the policy holder is only towards the risk cover in life insurance.”
2.4 Reference is also made to sub-rule (1) of Rule 42 of CGST Rules, 2017 which is reproduced
below:
“Rule 42. Manner of determination of input tax credit in respect of inputs or input services
and reversal thereof. -
(1) The input tax credit in respect of inputs or input services, which attract the provisions of
sub-section (1) or sub-section (2) of section 17, being partly used for the purposes of business and
partly for other purposes, or partly used for effecting taxable supplies including zero rated supplies
and partly for effecting exempt supplies, shall be attributed to the purposes of business or for effecting
taxable supplies in the following manner, namely,-
……………………………………….”

3. Views of the field formations:
3.1 Some of the field formations are taking a view that once a registered person has discharged
tax only on a portion of premium amount (determined by applying valuation principles under rule
32(4) of CGST Rules, 2017 as applicable for life insurance business), the taxable supply may be
considered to have been provided to the extent of taxable value i.e., the portion of premium which has
been considered for determination of taxable value as per Rule 32(4) of CGST Rules, 2017. Further,
they are of the view that the amount of insurance premium, which is not included in the taxable value
as per Rule 32(4) of CGST Rules, 2017, shall be treated as pertaining to a non-taxable supply and
since the definition of exempt supply as per Section 2(47) of the CGST Act 2017 includes non-taxable
supply also, therefore, it is presumed that the same may be treated as an exempt supply for the
purpose of reversal of input tax credit as per section 17(2) of CGST Act, 2017 read with Rule 42 & 43
of CGST Rules, 2017.
3.2 Accordingly, the said field formations are insisting on reversal of the common input tax credit
on such amount of premium, which is not includible in taxable value of supply of service by insurance
company in terms of rule 32(4) of CGST Rules, 2017, by treating the same as pertaining to an exempt
supply.

4. Representation of the trade:
4.1 Life Insurance Corporation of India has represented that Life Insurance is a single contract
between the policy holder and the insurance company for supply of one single service of life
insurance. Since, life insurance service is taxable supply and tax is paid on the taxable value as
determined under Rule 32(4) of CGST Rules, 2017, the amount of premium which is not included in
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the taxable value, cannot be considered as non-taxable supply. Therefore, Life Insurance Corporation
of India has represented that the balance amount of gross premium [i.e. the amount of premium not
included in taxable value after applying valuation rule under rule 32(4)] should not be considered as
pertaining to an exempt supply and accordingly, there should be no requirement for reversal of input
tax credit in respect of the same.

5. Analysis of the Issue:

5.1 ‘Life insurance business’ has been defined in Section 2(11) of the Insurance Act, 1938 as
follows:
“2(11) life insurance business means the business of effecting contracts of insurance upon
human life, including any contract whereby the payment of money is assured on death (except
death by accident only) or the happening of any contingency dependent on human life, and any
contract which is subject to payment of premiums for a term dependent on human life and shall
be deemed to include--
(a) the granting of disability and double or triple indemnity accident benefits, if so provided
in the contract of insurance,
(b) the granting of annuities upon human life; and
(c) the granting of superannuation allowances and benefit payable out of any fund
applicable solely to the relief and maintenance of persons engaged or who have been
engaged in any particular profession, trade or employment or of the dependents of such
persons;
Explanation. -- For the removal of doubts, it is hereby declared that life insurance business
shall include any unit linked insurance policy or scrips or any such instrument or unit, by
whatever name called, which provides a component of investment and a component of
insurance issued by an insurer referred to in clause (9) of this section.

5.2 Life insurance companies are providing service of insuring the life of the insured and in
return, are charging consideration in the form of premium from the insured. A number of life
insurance companies are providing policies which may consist of a component of investment, in
addition to the component for the risk cover of the life insurance and accordingly, in such cases, the
premium charged also includes the component which is allocated for investment or saving on behalf
of the policy holder. As per definition of ‘Life insurance business’ provided in Section 2(11) of the
Insurance Act, 1938 reproduced above, life insurance business includes any unit linked insurance
policy or scrips or any such instrument or unit, by whatever name called, which provides a component
of investment and a component of insurance issued by an insurer. Accordingly, such life insurance
policies, which also include a component of investment along with the component of risk cover for
life insurance, are also covered under life insurance business.

5.3 The value of taxable supply of the services is to be determined as per the provisions of
Section 15 of the CGST Act, 2017. Sub-section (1) of Section 15 of the CGST Act, 2017 provides for
value of taxable supply to be the transaction value, which is the price actually paid or payable for the
said supply where the supplier and recipient of the supply are not related and price is the sole
consideration for the supply. Sub-section (4) of the Section 15 of CGST Act, 2017 provides that
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where the value of supply of goods or services or both cannot be determined under sub-section (1) of
the said section, the same may be determined in the manner as may be prescribed. The said manner
has been prescribed in the CGST Rules, 2017 wherein sub-rule (4) of Rule 32 of CGST Rules, 2017
provides for the method of calculation of the value of supply of services in relation to life insurance
business in various situations. Proviso to Rule 32(4) of CGST Rules, 2017 clearly mentions that in
case the entire premium paid by the policy holder is only towards the risk cover in life insurance then
the entire premium paid will be considered as the value of supply of service.

5.4 Provisions of rule 32(4) of CGST Rules, 2017 imply that the premium paid by a policy holder
towards risk portion needs to be included in taxable value whereas the component of the premium
allocated/ attributable to savings or investment on behalf of the policy holder needs to be excluded
from the value of taxable supply. Keeping in consideration the complexity in arriving at such a
breakup, Rule 32(4) of CGST Rules, 2017 provides the method of calculation of the value of taxable
supply in case of supply of service of life insurance.

5.4.1 Rule 32(4) of CGST Rules, 2017 provides that the value of supply of services in respect of
life insurance business is primarily to be determined by deducting the amount of premium allocated
for investment/savings on behalf of the policy holder from the gross premium charged from the policy
holder. The said sub-rule also provides for determination of value of supply of such services based on
certain percentage of the gross premium in other situations. However, where the entire premium is
only towards the risk cover in life insurance, the value of supply is not required to be determined
under the said sub-rule as in such cases whole of the consideration i.e. gross premium is towards life
insurance services.

5.5 The issue under examination is as to whether the portion of premium which is attributable to
investment/ savings on behalf of the policy holder and is not included in value of taxable supply
determined as per sub-rule (4) of Rule 32 of CGST Rules, 2017, can be considered as a non-taxable/
exempt supply and whether ITC on common inputs is required to be reversed in respect of the same as
per Rule 42/43 of CGST Rules, 2017.

5.6 As per section 2(47) of the CGST Act, 2017, exempt supply means 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 (hereinafter referred to as the
IGST Act), and includes non-taxable supply. The said definition of exempt supply has the following
three limbs: -
(a) Supply of service which is nil rated;
(b) Supply of service which is wholly exempted from tax under section 11 of CGST Act or
under Section 6 of IGST Act; or
(c) Supply of service which is non-taxable supply.

5.6.1. Further, as per section 2(78) of CGST Act, 2017, non-taxable supply means a supply of
goods or services or both which is not leviable to tax under the CGST Act, 2017 or under the IGST
Act, 2017.
5.6.2 In the present case, there appears to be no doubt about taxability of supply of service of
providing life insurance services by the insurance company to the insured/policy holder but the only
Agenda for 53rd GSTCM Volume 1
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issue is regarding the treatment of balance premium amount over and above the taxable value of
supply as determined under the provisions of Rule 32(4) of CGST Rules. Further, the service of
providing life insurance is neither nil rated, nor there is any notification issued under section 11 of
CGST Act, 2017 by virtue of which the said service or any portion of the said service has been
exempted from GST.
5.6.3 Further, the supply can be considered as a non-taxable supply only when it is not leviable to
tax under the CGST Act, 2017 or under the IGST Act, 2017. It is not a case where the tax is not
leviable on the supply of life insurance services provided by life insurance companies to the
insured/policy holder. The value of the said supply of service in respect of life insurance business as
determined under Section 15 of CGST Act, 2017 read with Rule 32(4) of CGST Rules, 2017 may
not include some portion of gross premium as per methodology provided in the said rule. This portion
of premium, which is not includible in taxable value as per provisions of Rule 32(4) of CGST Rules,
2017, is neither nil rated, nor wholly exempted from tax under section 11 of CGST Act, 2017 and also
not a non-taxable supply. Therefore, just because some amount of consideration is not included in
value of taxable supply as per the provisions of the statute, it cannot be said that the said portion of
consideration becomes attributable to a non-taxable or exempt supply. Therefore, the contention of
field formations, that the said amount of premium which is not included in the value of taxable supply
becomes an exempted supply, appears to be without any basis.
5.6.4 Further, Rule 42 of the CGST Rules, 2017 provides for reversal of common input tax credit in
respect of exempt supply. As per the said rule, only that input tax credit which attract the provisions of
sub-section (1) and sub-section (2) of Section 17 of the CGST Act, 2017 needs to be determined and
reversed thereof. Further sub-section (1) and sub-section (2) of Section 17 of the CGST Act, 2017
restrict the amount of credit only in a case where the registered person uses the goods or services
partly for business or other purposes or partly for making taxable supplies or exempt supplies.
However, as discussed in Para 5.6.3 above, the portion of premium which is not includible in taxable
value of supply as per Rule 32(4) of CGST Rules, 2017 cannot be considered as pertaining to non-
business purpose or pertaining to exempt supply and therefore, there is no requirement of reversal of
credit as per provisions of Rule 42/43 of CGST Rules, 2017 read with sub-section (1) and sub-section
(2) of Section 17 of CGST Act, 2017.
6. Accordingly, Law Committee in its meeting dated 08.11.2023 deliberated on the issue and
recommended clarifying the same by issuing a Circular. Draft circular, as recommended by the Law
Committee, is enclosed with this agenda note as Annexure-A.
7. The issue is put up before GST Council for deliberation and approval.

*******





Agenda for 53rd GSTCM Volume 1
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ANNEXURE-A
Circular No. XX/XX/2024-GST

F. No. CBIC-20001/2/2022 - GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification on the requirement of reversal of input tax credit in respect of the portion of the
premium for life insurance policies which is not included in taxable value-reg.

Representations have been received from the trade and field formations seeking
clarification on the issue as to whether the amount of insurance premium, which is not included in
the taxable value as per Rule 32(4) of Central Goods and Services Tax Rules, 2017 (hereinafter
referred to as the “CGST Rules”) applicable for life insurance business, will be treated as pertaining
to an exempt supply/ non-taxable supply and whether the input tax credit availed in respect of such
amount shall be required to be reversed or not.
3. In order to clarify the issue and to ensure uniformity in the implementation of the
provisions of law across the field formations, the Board, in exercise of its powers conferred by
section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the
“CGST Act”), hereby clarifies the issues as under:
Agenda for 53rd GSTCM Volume 1
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S. No. Issue Clarification
Requirement of reversal of input tax credit in respect of the portion of the
premium for life insurance policies which is not included in taxable value
1. Whether the amount of insurance
premium, which is not included in
the taxable value as per Rule 32(4) of
Central Goods and Services Tax
Rules, 2017 (hereinafter referred to
as “CGST Rules”) applicable for life
insurance business, shall be treated as
pertaining to a non-taxable supply/
exempt supply for the purpose of
reversal of Input tax credit as per
section 17(1) of CGST Act read with
Rule 42 & 43 of CGST Rules.

‘Life insurance business’ has been defined in Section
2(11) of the Insurance Act, 1938 as follows:
“2(11) life insurance business means the business of
effecting contracts of insurance upon human life,
including any contract whereby the payment of money
is assured on death (except death by accident only) or
the happening of any contingency dependent on
human life, and any contract which is subject to
payment of premiums for a term dependent on human
life and shall be deemed to include--
(d) the granting of disability and double or triple
indemnity accident benefits, if so provided in
the contract of insurance,
(e) the granting of annuities upon human life ; and
(f) the granting of superannuation allowances and
benefit payable out of any fund applicable
solely to the relief and maintenance of persons
engaged or who have been engaged in any
particular profession, trade or employment or
of the dependents of such persons ;
Explanation. -- For the removal of doubts, it is hereby
declared that life insurance business shall include any
unit linked insurance policy or scrips or any such
instrument or unit, by whatever name called, which
provides a component of investment and a component
of insurance issued by an insurer referred to in clause
(9) of this section.
2. Life insurance companies are providing service of
insuring the life of the insured and in return, are charging
consideration in the form of premium from the insured. A
number of life insurance companies are providing policies
which may consist of a component of investment in addition
to the component for the risk cover of the life insurance and
accordingly, in such cases, the premium charged also
includes the component which is allocated for investment or
saving on behalf of the policy holder. As per definition of
‘Life insurance business’ provided in Section 2(11) of the
Insurance Act, 1938, life insurance business includes any
unit linked insurance policy or scrips or any such instrument
or unit, by whatever name called, which provides a
Agenda for 53rd GSTCM Volume 1
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component of investment and a component of insurance
issued by an insurer. Accordingly, such life insurance
policies, which also include a component of investment
along with the component of risk cover for life insurance,
are also covered under life insurance business.

2.1 It is mentioned that value of supply of services in
relation to life insurance business is to be determined as per
provisions of sub-rule (4) of rule 32 of CGST Rules. Rule
32(4) of CGST Rules provides that the value of supply of
services in respect of life insurance business is primarily to
be determined by deducting the amount of premium
allocated for investment/savings on behalf of the policy
holder from the gross premium charged from the policy
holder. The said sub-rule also provides for determination of
value of supply of such services based on certain percentage
of the gross premium in other situations. However, where
the entire premium is only towards the risk cover in life
insurance, the value of supply is not required to be
determined under the said sub-rule as in such cases whole of
the consideration i.e. gross premium is towards life
insurance services.

2.2 As per section 2(47) of the CGST Act, exempt
supply means 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, 2017 (hereinafter referred to
as the “IGST Act”), and includes non-taxable supply. The
said definition of exempt supply has the following three
limbs: -
(a) Supply of service which is nil rated;
(b) Supply of service which is wholly exempted
from tax under section 11 of CGST Act or under
Section 6 of IGST Act; or
(c) Supply of service which is non-taxable supply.
2.2.1. Further, as per section 2(78) of CGST Act, non-
taxable supply means a supply of goods or services or both
which is not leviable to tax under the CGST Act or under
the IGST Act.
2.2.2 It is mentioned that there is no doubt about
taxability of supply of service of providing life insurance
services by the insurance company to the insured/ policy
holder but the only issue is regarding the treatment of
balance premium amount over and above the taxable value
Agenda for 53rd GSTCM Volume 1
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of supply as determined under the provisions of Rule 32(4)
of CGST Rules. Further, the service of providing life
insurance cover is neither nil rated, nor there is any
notification issued under section 11 of CGST Act by virtue
of which the said service or any portion of the said service
has been exempted from GST.
2.2.3 It is also mentioned that the supply can be
considered as a non-taxable supply only when it is not
leviable to tax under the CGST Act or under the IGST Act.
It is not a case where the tax is not leviable on the supply of
life insurance services provided by life insurance companies
to the insured/policy holder. The value of the said supply of
service in respect of life insurance business as determined
under Rule 32(4) of CGST Rules, 2017 may not include
some portion of gross premium as per methodology
provided in the said rule. This portion of premium which is
not includible in taxable value as per provisions of Rule
32(4) of CGST Rules is neither nil rated, nor wholly
exempted from tax under section 11 of CGST Act and also
not a non-taxable supply. Therefore, just because some
amount of consideration is not included in value of taxable
supply as per the provisions of the statute, it cannot be said
that the said portion of consideration becomes attributable to
a non-taxable or exempt supply.
2.2.4 Further, Rule 42 of the CGST Rules provides for
reversal of input tax credit in certain scenarios. As per the
said rule, only that input tax credit which attract the
provisions of sub-section (1) and sub-section (2) of Section
17 of the CGST Act needs to be determined and reversed
thereof. Further, sub-section (1) and sub-section (2) of
Section 17 of the CGST Act restrict the amount of credit
only in a case where the registered person uses the goods or
services partly for business or other purposes or partly for
making taxable supplies or exempt supplies. However, as
discussed in Para 2.2.3 above, the portion of premium
which is not includible in taxable value of supply as per
Rule 32(4) of CGST Rules cannot be considered as
pertaining to an exempt supply.
3. In view of this, it is clarified that the amount of the
premium for taxable life insurance policies, which is not
included in the taxable value as determined under rule 32(4)
of CGST Rules, cannot be considered as pertaining to a non-
taxable or exempt supply and therefore, there is no
requirement of reversal of input tax credit as per provisions
of Rule 42 or rule 43 of CGST Rules, read with sub-section
(1) and sub-section (2) of Section 17 of CGST Act, in
Agenda for 53rd GSTCM Volume 1
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2. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
3. Difficulty, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.


(Sanjay Mangal)
Principal Commissioner (GST)



respect of the said amount.

Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxiii): Clarification on the taxability of wreck and salvage values in motor
insurance claims.
The insurance companies, which are engaged in providing general insurance services in
respect of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred
by the policyholders. Such damages to the insured vehicle are classified in two categories:
i. Total Loss (TL)/ Constructive Total Loss (CTL) or Cash Loss; and
ii. Partial Loss Situation
Representations have been received from the General Insurance Industry seeking clarity on
the applicability of GST on salvage/ wreck value earmarked in the claim assessment of the damage
caused to the motor vehicle.
2. RELEVANT PROVISIONS:
2.1 Insured Declared Value (IDV) is defined under Indian Motor Tariff (IMT), which was
constituted under Part-II of the Insurance Act, 1938, as below:
“The Insured’s Declared Value (IDV) of the vehicle will be deemed to be the “SUM
INSURED” for the purpose of this tariff and it will be fixed at the commencement of each
policy period for each insured vehicle.
….
For the purpose of TL/CTL claim settlement, this IDV will not change during the currency of
the policy period in question. It is clearly understood that the liability of the insurer shall in
no case exceed the IDV as specified in the policy schedule less the value of the wreck, in ‘as is
where is’ condition.

The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and / or repair
of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the
vehicle. ”

2.2 IMT has also given a standard policy wording format to cover all types of motor insurance
policies. The operating clause related to repair of motor vehicles as given in IMT is reproduced
below:
“The Company may at its own option repair, reinstate or replace the vehicle or part thereof
and/or its accessories or may pay in cash the amount of the loss or damage and the liability
of the Company shall not exceed:

(a) For total loss / constructive total loss of the vehicle – the Insured’s Declared Value
(IDV) of the vehicle (including accessories thereon) as specified in the schedule less the
value of the wreck.
(b) For partial losses, i.e. losses other than Total Loss/Constructive Total Loss of the
vehicle –actual and reasonable costs of repair and /or replacement of parts
lost/damaged subject to depreciation as per limits specified.”

2.3 Reference is also made to FAQs on property insurance issued by Insurance Regulatory and
Development Authority of India (IRDAI). The relevant FAQ related to salvage is as given below:

“Q. What is the relevance of salvage?
In case of claims under various types of insurance policies, the partly damaged goods or the
wreck of a car or any machinery or any other property settled on Total Loss Basis is known
as ‘Salvage’. After setting the claim for the full amount the salvage becomes the property of
Insurance Company. Generally the job of salvage disposal is entrusted by the Insurance
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Company to the surveyor who carried out the loss assessment, subject to observance of
procedure for salvage disposal. The amount realized through salvage disposal will be set off
by insurer against losses paid by them.”
2.4 Reference is also made to sub-section (2) of Section 64UM of Insurance Act, 1938 which
provides for the condition with regard to appointment of surveyor for assessing the insurance claims:
“(2) No claim in respect of a loss which has occurred in India and requiring to be paid or
settled in India equal to or exceeding twenty thousand rupees in value on any policy of
insurance, arising or intimated to an insurer at any time after the expiry of a period of one
year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless
otherwise directed by the Authority, be admitted for payment or settled by the insurer unless
he has obtained a report, on the loss that has occurred, from a person who holds a licence
issued under this section to act as a surveyor or loss assessor (hereafter referred to as
"approved surveyor or loss assessors)
Provided that nothing in this sub-section shall be deemed to take away or abridge the right
of the insurer to pay or settle any claim at any amount different from the amount assessed by
the approved surveyor or loss assessor.”
3. BRIEF FACTS OF THE ISSUE:
3.1 The insurance companies are engaged in the business of providing insurance, inter alia, to
indemnify the damage to the vehicle by getting the said vehicle repaired in case of damage to the
extent provided as per the terms of the insurance policy. The damages to the motor vehicles may
result in either ‘total losses’ or ‘partial losses’. As defined under Indian Motor Tariff (IMT), any
damage exceeding 75% of the insured value results in Total Loss or Constructive Total Loss. In case
of such total loss & constructive total loss situations, the liability of the insurance company is
limited to the Insured’s Declared Value (IDV) of the vehicle (including accessories thereon) as
specified in the schedule less the value of the wreck. Further, in cases of partial damage to the vehicle,
the liability of the insurance company is limited to actual and reasonable costs of repair and /or
replacement of parts lost/damaged subject to depreciation as per limits specified in the policy
contract itself. The issue raised in the representations is regarding the treatment of salvage/wreck
under GST in both the cases i.e. when there is a Total Loss/ Constructive Total Loss or when there is
a partial loss to the vehicle. In both the cases, as per the conditions mentioned in the Insurance Act,
1938, a surveyor is first appointed by the insurance company who assesses whether the loss occurred
is Total Loss/ Constructive Total Loss or Partial Loss. The said surveyor also prepares an estimate of
the repair cost of the vehicle in cases of Partial Loss and the net claim to be paid by the insurance
companies in cases of Total Loss, to arrive at an estimated value of salvage which needs to be
deducted from the claim amount. For this purpose, the surveyor may also source the quote for salvage
from various potential buyers.
3.2 As a general practice, in cases where Total Loss is incurred on the vehicle, the insurance
company pays the net claim amount to the insured which is arrived by deducting the value of salvage
from the IDV. This salvage value may be estimated by the appointed surveyor inter-alia based on
quotations received from salvage buyers.
3.3 Further, in cases where there is a partial loss to the vehicle, once the insured brings the
vehicle to the garage for repairs, an independent Surveyor/ Loss Assessor appointed by the insurance
company finalise claim liability to be paid to the policy holder. Here, the insurance company
generally arrives at the net claim value by reducing the salvage value as estimated by the Surveyor
from the repair cost of the vehicle estimated by the garage.

4. VIEW OF FIELD FORMATIONS:
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Some of the field formations are taking view that as per FAQs of IRDAI (referred in Para 2.3
above), insurance companies are the owner of salvage, i.e. the partly damaged goods or the wreck of a
car settled on Total Loss Basis. They further are of the view that the general insurance companies
partly divert the mode of payment of claim liability in order to avoid payment of GST liability on the
value of the damaged vehicle/ salvage/ wreck by showing that the salvage has been retained and sold
by the insured. Therefore, according to them, the general insurance companies are engaged in the
supply of salvage and are realizing consideration in the form of deduction of value of salvage from the
claim amount payable by them to the insured or the repair charges payable to the repairers/garages
and are liable to discharge GST against the same.

5. VIEW OF TRADE:
On the other hand, the contention of insurance companies is that in the entire process of
disposal of wreck/ salvage, whether that is generated in cases of partial loss or total loss, they do not
take control or ownership of the same. As per the applicable insurance regulations as well, the
insurance company does not become the owner or seller of the salvage or wreck, if the claim is settled
on the basis of IDV less the value of the salvage/ wreck. In such cases, the rights over the salvage/
wreck always remain with the insured. Accordingly, demanding GST on the salvage value from the
insurance company by considering the same as supply by insurance company is not correct.

6. EXAMINATION:
6.1 Under GST law, supply is the relevant taxable event for levying tax. For an
activity/transaction to be liable to GST, existence of ‘supply’ as defined under section 7 of CGST Act,
2017 should be there.

6.2 Section 7 of CGST Act, 2017 defines supply to mean ‘all forms of supply of goods or services
or both made or agreed to be made for a consideration by a person in the course or furtherance of
business.’ In the instant case, insurance companies are providing service of insuring the vehicle/
automobile for any damages and in return, charging consideration in the form of premium charged
from the owner of the vehicle. It is also noted that in respect of insurance services being provided by
the insurance companies, it is the responsibility of the insurance company to get the damaged vehicle
repaired when there is a partial loss to the vehicle, to the extent covered under the terms of the
insurance. The insurance companies get the repair liability assessed through a Surveyor/ Loss
Assessor, and make the payment of such approved repair liability, either directly to the garage
(cashless mode in case of empanelled or networked garages) or through the insured by reimbursement
of the approved repair liability paid by the insured to the garage (reimbursement mode in case of non-
networked garages). In both the cases, the liability to make the payment for such repair cost, to the
extent of the approved repair liability, lies with the insurance company only, as it is the insurance
company which has indemnified the insured for damage of the vehicle.
6.3 Here, it is worthwhile to mention that any deductions made by the insurance company from
the final claim amount paid to the insured is in the form of deductibles which is pre-decided and
mutually agreed by the insured and the insurer while signing the insurance contract. Where the value
of the wreck/salvage of the damaged/defective part is deducted from the claim amount, such
wreck/damaged part becomes the property of the insured and the insured can dispose it off as per his
choice. Such a deduction of the value of wreck/damaged part by the insurance company from the
insurance claim cannot be considered as supply of the said wreck/damaged part by the insurance
company and no GST appears to be payable by insurance company on the same.

6.4 Further, as per the standard policy contract, in cases where there is total damage to the
vehicle, the insurance company’s liability to pay the insured is limited to IDV of the vehicle less the
value of salvage/ wreck. In all such cases, as the insurance claim is settled by the insurance company
as per the terms of the insurance contract by deducting value of salvage/ wreck from the claim
settlement amount, the salvage/ wreck does not become property of insurance company, and the
ownership for such wreck/ salvage remains with the insured. However, in some cases, the insurance
Agenda for 53rd GSTCM Volume 1
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company may support sourcing of competitive quotes from various salvage/ wreck buyers and the
insured may select the best available offer for sale of wreck or damaged car. The insured may also
source quotes from open markets and dispose the wreck or damaged car to such a buyer. In any case,
the ownership of the wreck vests with the insured and not with the insurance company. The same can
be disposed off by the insured either directly, or through the garage, or may not be disposed off at all,
as per his wish and choice. The deduction of the value of salvage from the insurance settlement
amount, is as per the terms of the insurance contract, and cannot be said to be consideration for any
supply being made by insurance company. Accordingly, in such cases, there does not appear to any
supply of salvage by insurance company and as such, there does not appear to be any liability under
GST on part of insurance company in respect of this salvage value.

6.5 Reliance has been made by some of the field formations on the FAQ issued by IRDAI
(referred in Para 2.3 above), wherein it has been mentioned that the salvage becomes the property of
Insurance Company after setting the claim for the full amount. Based on the said FAQ, it has been
contended that the salvage is property of insurance company once the claim is settled by them and
hence the insurance companies are liable to discharge GST on the amount deducted on account of the
estimated value of salvage. It is worthwhile to mention that as per the said FAQ, salvage becomes the
property of the insurance company only in case the claim is settled on full amount basis. Once, value
of salvage is deducted from the claim amount, the salvage becomes the property of the insured and he
is free to dispose the same as per his choice.

6.6 In situations where the insurance contract provides for settlement of claim on full IDV,
without deduction of value of salvage/ wreck, the insured will be paid for full claim amount without
any deductions on account of salvage value, and as per FAQ issued by IRDAI (referred in Para 2.3
above), the salvage becomes the property of Insurance Company after setting the claim for the full
amount. In all such cases, where the right of refusal to keep the salvage rests with the insured and
where general insurance companies cannot deny keep/take possession of the salvage, the salvage
becomes the property of the general insurance companies and they are obligated to deal with the same
or dispose the same, thereby the outward GST liability on disposal/sale of the salvage is to be
discharged by the insurance companies.

7. The issue was deliberated by the Law Committee in its meeting held on 08.12.2023. The Law
Committee recommended that in cases, where due to the conditions mentioned in the contract itself,
general insurance companies are deducting the value of salvage as compulsory deductibles from the
claim amount, there the salvage remains the property of insured and insurance companies are not
liable to discharge GST liability against the same. However, in cases, where the insurance claim is
settled on full claim amount, without deduction of value of salvage/ wreck (as per the contract), the
salvage becomes the property of insurance company and the insurance company will be obligated to
discharge GST on salvage’s outward supply to the salvage buyer.

8. Law Committee recommended that the treatment of salvage and its taxability in various
situations may be clarified on the above lines by issuing a Circular. Draft circular recommended by
the Law Committee is enclosed with this agenda note as Annexure A.

9. The agenda is put up for deliberation and approval by GST Council please.

***********








Agenda for 53rd GSTCM Volume 1
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Annexure A
F. No. CBIC-20006/5/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****
New Delhi, Dated the – March, 2024
To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on various issues pertaining to GST-reg.

The insurance companies, which are engaged in providing general insurance services in
respect of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred
by the policyholders. Such damages to the insured vehicle are classified in two categories:
i. Total Loss/ Constructive Total Loss or Cash Loss; and
ii. Partial Loss Situation

1.2 Representations have been received from the trade and field formations seeking clarification
as to whether or not in case of motor vehicle insurance, GST is payable by the insurance company on
salvage/ wreckage value earmarked in the claim assessment of the damage caused to the motor
vehicle.

4. In order to clarify the issue and to ensure uniformity in the implementation of the
provisions of law across the field formations, the Board, in exercise of its powers conferred by
section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST
Act”), hereby clarifies the issues as under:
Agenda for 53rd GSTCM Volume 1
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S. No. Issue Clarification
Taxability of salvage/ wreck value earmarked in the claim
assessment of the damage caused to the motor vehicle
1. Whether the insurance company is
liable to pay GST on the salvage/
wreckage value earmarked in the
claim assessment of the damage
caused to the motor vehicle?
Under GST law, supply is the relevant taxable event
for levying tax. For an activity/transaction to be
liable to GST, existence of ‘supply’ as defined under
section 7 of CGST Act, 2017 should be there.

2.1 Section 7 of CGST Act, 2017 defines supply
to mean ‘all forms of supply of goods or services or
both made or agreed to be made for a consideration
by a person in the course or furtherance of
business.’ In the instant case, insurance companies
are providing service of insuring the vehicle/
automobile for any damages and in return, charging
consideration in the form of premium charged from
the owner of the vehicle. It is also noted that in
respect of insurance services being provided by the
insurance companies, it is the responsibility of the
insurance company to get the damaged vehicle
repaired when there is a partial loss to the vehicle, to
the extent covered under the terms of the insurance.
2.2 Any Deduction made by the insurance
company from the final claim amount paid to the
insured is in the form of deductibles which is pre-
decided and mutually agreed by the insured and the
insurer while signing the insurance contract. Such a
deduction of the value of wreckage/damaged part by
the insurance company from the insurance claim
cannot be considered as supply of the said
wreckage/damaged part by the insurance company
and no GST appears to be payable by insurance
company on the same.

2.3 In cases where as per the policy contract,
the insurance company’s liability to pay the insured
is limited to Insured’s Declared Value (IDV) of the
vehicle less the value of salvage/ wreck in cases of
total loss to the vehicle, if the insurance claim is
settled by the insurance company as per the terms of
the insurance contract by deducting value of
salvage/ wreckage from the claim settlement
amount, the salvage/ wreckage does not become
property of insurance company, and the ownership
for such wreckage/ salvage remains with the
insured. However, in some cases, the insurance
company may support sourcing of competitive
quotes from various salvage/ wreckage buyers and
the insured may select the best available offer for
sale of wreckage or damaged car. The insured may
also source quotes from open markets and dispose
the wreckage or damaged car to such a buyer. In any
case, the ownership of the wreckage vests with the
insured and not with the insurance company. The
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4. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
5. Difficulty, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.


(Sanjay Mangal)
Principal Commissioner (GST)



same can be disposed by the insured either directly,
or through the garage, or may not be disposed at all,
as per his wish and choice. The deduction of the
value of salvage from the insurance settlement
amount, is as per the terms of the insurance contract,
and cannot be said to be consideration for any
supply being made by insurance company.
Accordingly, in such cases, there does not appear to
be any supply of salvage by insurance company and
as such, there does not appear to be any liability
under GST on the part of insurance company in
respect of this salvage value.

2.4 However, in situations where the insurance
contract provides for settlement of claim on full
IDV, without deduction of value of salvage/ wreck,
the insured will be paid for full claim amount
without any deductions on account of salvage value.
In such a situation, the salvage becomes the property
of Insurance Company after settling the claim for
the full amount and the insurance company is
obligated to deal with the same or dispose of the
same. In such cases, the outward GST liability on
disposal/sale of the salvage is to be discharged by
the insurance companies.

3. Therefore, in cases where due to the
conditions mentioned in the contract itself, general
insurance companies are deducting the value of
salvage as deductibles from the claim amount, the
salvage remains the property of insured and
insurance companies are not liable to discharge GST
liability on the same. However, in cases, where the
insurance claim is settled on full claim amount,
without deduction of value of salvage/ wreckage (as
per the terms of the contract), the salvage becomes
the property of the insurance company and the
insurance company will be obligated to discharge
GST on supply of salvage to the salvage buyer.

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Agenda Item 3(xxiv): Clarification in respect of Extended Warranty provided by
Manufacturers to the end customers in view of Circular No. 195/07/2023-GST dated 17.07.2023.
Reference is invited to Circular No. 195/07/2023-GST dated 17.07.2023 issued on the basis of
recommendations of the GST Council in its 50th meeting. The said circular sought to clarify certain
issues regarding availability of ITC in respect of warranty replacement of parts and repair services
during warranty period.
2. Representation has been received from trade requesting further clarification in respect of the
following issues:
A. Clarification regarding liability to pay GST and liability to reverse ITC in cases involving
warranty replacement of 'entire goods' (and not mere parts):
2.1. It has been submitted that though Circular No. 195/07/2023-GST dated 17.07.2023 mentions
in the opening paragraph that "Representations have been received from trade and industry that as a
common trade practice, the original equipment manufacturers/ suppliers offer warranty for the goods/
services supplied by them. During the warranty period, replacement goods /services are supplied to
customers free of charge and as such no separate consideration is charged and received at the time of
replacement." However, the table in Para 2 of the said circular clarifies regarding GST liability as
well as liability to reverse ITC only in cases involving replacement of 'parts' and not if the goods
itself are replaced under warranty. Request has been made to issue clarification in respect of such
cases also when the goods itself (and not mere parts) are replaced as part of warranty.
B. Clarification regarding liability to pay GST and liability to reverse ITC in cases where the
distributor replaces goods to the customer as part of warranty on behalf of the manufacturer
out of his own stock and thereafter the manufacturer replenishes the stock of the distributor:
2.2. It has been represented that Sr. No. 4 of Para 2 of the Circular No. 195/07/2023-GST clarifies
about the GST liability as well as liability to reverse ITC in cases where the distributor provides
replacement of parts to the customer as part of warranty on behalf of the manufacturer, however, S.
No.4 does not cover the scenario where the distributor replaces the goods to the customer as part of
warranty out of his own stock on behalf of the manufacturer, to provide prompt service to the
customer, and then raises a requisition to the manufacturer for the goods replaced by him under
warranty. The manufacturer, thereafter, provides the said goods to the distributor vide a delivery
challan, as replenishment for the goods provided as replacement to the customer by the distributor.
Request has been made to issue clarification in respect of such cases where the distributor replaces
goods to the customer as part of warranty on behalf of the manufacturer out of his own stock and
thereafter, the said parts are replenished to the distributor by the manufacturer.
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C. Clarification in respect of nature of supply of extended warranty as provided at S. No. 6 of
para 2 of the said circular in respect of the following issues:
2.3.1 It has been represented that in respect of cases, where agreement for extended warranty is
made at the time of original supply of goods, and the supplier of extended warranty is different from
the supplier of goods, the extended warranty should be treated as a separate and independent
transaction from the supply of goods, whereas the said Circular has treated it to be in the nature of
composite supplies, the principal supply being the supply of goods.
2.3.2 It has also been represented that in cases where Extended Warranty is sold subsequent to the
original supply of goods, the same should be considered as supply of services only whereas the said
Circular clarifies that GST on the same would be payable depending on the nature of the contract (i.e.
whether the extended warranty is only for goods or for services or for composite supply involving
goods and services).
Examination of the issues:
3. The matter has been examined. It is noted that in cases where warranty is provided by the
manufacturer/ suppliers to the customers in respect of any goods, and if any defect is detected in the
said goods during the warranty period, the manufacturer may be required to replace either one or more
parts or the entire product, depending upon the extent of damage/ defect noticed in the said goods.
The clarification provided by Circular No. 195/07/2023-GST dated 17.07.2023 was intended to cover
all such situations where either any part/ parts are replaced during the warranty period, or where the
goods itself are replaced as such. However, while clarifying the issue in Table in Para 2 of the said
circular, only the situations involving replacement of part/ parts have been mentioned, without
referring to situation involving replacement of entire goods as such. Therefore, in order to remove any
ambiguity and doubts on the issue, it is proposed that Circular No. 195/07/2023-GST dated
17.07.2023 may be suitably modified, to include the replacement of ‘entire goods’ under its ambit.
3.1. It is also noted that Sr. No. 4 of Para 2 of Circular No. 195/07/2023-GST dated 17.07.2023
clarifies three scenarios (as reproduced below), where the distributor provides replacement of parts
to the customer as part of warranty on behalf of the manufacturer:
4 In the above scenario where the
distributor provides replacement of
parts to the customer as part of
warranty on behalf of the
manufacturer, whether any supply is
involved between the distributor and the
manufacturer and whether the
(a) There may be cases where the distributor
replaces the part(s) to the customer under
warranty either by using his stock or by
purchasing from a third party and charges the
consideration for the part(s) so replaced from
the manufacturer, by issuance of a tax invoice,
for the said supply made by him to the
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distributor would be required to reverse
the input tax credit in respect of such
replacement of parts?
manufacturer. In such a case, GST would be
payable by the distributor on the said supply by
him to the manufacturer and the manufacturer
would be entitled to avail the input tax credit of
the same, subject to other conditions of CGST
Act. In such case, no reversal of input tax credit
by the distributor is required in respect of the
same.
(b) There may be cases where the distributor
raises a requisition to the manufacturer for the
part(s) to be replaced by him under warranty
and the manufacturer then provides the said
part(s) to the distributor for the purpose of such
replacement to the customer as part of
warranty. In such a case, where the
manufacturer is providing such part(s) to the
distributor for replacement to the customer
during the warranty period, without separately
charging any consideration at the time of such
replacement, no GST is payable on such
replacement of parts by the manufacturer.
Further, no reversal of ITC is required to be
made by the manufacturer in respect of the
parts so replaced by the distributor under
warranty.
(c) There may be cases where the distributor
replaces the part(s) to the customer under
warranty out of the supply already received by
him from the manufacturer and the
manufacturer issues a credit note in respect of
the parts so replaced subject to provisions of
sub-section (2) of section 34 of the CGST Act.
Accordingly, the tax liability may be adjusted
by the manufacturer, subject to the condition
that the said distributor has reversed the ITC
availed against the parts so replaced.

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3.2. However, S. No. 4 of Para 2 of Circular No. 195/07/2023-GST dated 17.07.2023 does not
specifically cover the cases where the distributor initially replaces the goods for the customer on
behalf of the manufacturer out of his stock and later, gets the same replenished from the manufacturer
through a delivery challan without making any additional payments. The key aspects of this scenario
i.e.
a) distributor providing replacement out of his own stock;
b) manufacturer replenishing the distributor for the said replacement; and
c) the replacement being made at no additional cost on the distributor,
are all covered in the scenario mentioned in point (b) of the clarification offered with respect to Sr.
No.4 of Para 2 of the said Circular and therefore, the treatment of the said scenario in respect of tax
liability and ITC reversal should be same as in case covered in point (b) of S. No. 4 of Para 2 of the
above circular. However, point (b) only refers to the situation, where the distributor first raises the
requisition to the manufacturer for the part(s) to be replaced by him under warranty and the
manufacturer then provides the said part(s) to the distributor for the purpose of such replacement to
the customer as part of warranty. This clause does not specifically provide for the situation where the
part(s) are first replaced by the distributor to the customer as part of warranty and then the same are
replenished by the manufacturer to the distributor. To clarify the issue and remove any doubts about
the same, it is proposed that a new point may be inserted in S. No. 4 of Para 2 of Circular No.
195/07/2023-GST dated 17.07.2023 to clarify about tax liability and ITC reversal in such cases also,
on the same lines as has been clarified vide point (b) of S. No. 4 of Para 2 of the said circular.
3.3 Further, it is also noted that Sr. No. 4 of Para 2 of Circular No. 195/07/2023-GST dated
17.07.2023( reproduced below) clarifies taxability in respect of extended warranty provided to the
customers, wherein it has been clarified that in case the agreement of extended warranty with the
manufacturer is entered at the time of original supply, then such extended warranty becomes part of
the composite supply and where the said agreement of extended warranty is entered at any time after
the original supply, then the same is a separate contract and GST would be payable, depending on the
nature of the contract(i.e. whether the extended warranty is only for goods or for services or for
composite supply involving goods and services).

Sometimes companies provide
offers of Extended warranty to
the customers which can be
availed at the time of original
(a) If a customer enters in to an agreement of extended
warranty with the manufacturer at the time of original
supply, then the consideration for such extended
warranty becomes part of the value of the composite
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supply or just before the expiry of
the standard warranty period.
Whether GST would be payable
in both the cases?
supply, the principal supply being the supply of goods,
and GST would be payable accordingly.

(b) However, in case where a consumer enters into an
agreement of extended warranty at any time after the
original supply, then the same is a separate contract and
GST would be payable by the service provider, whether
manufacturer or the distributor or any third party,
depending on the nature of the contract(i.e. whether the
extended warranty is only for goods or for services or for
composite supply involving goods and services)

3.4 In respect of the above, it is to be mentioned that there may be cases where the supplier for
the goods may be the dealer while the supplier of extended warranty may be the OEM or third party.
In such cases, the supplies being made by different suppliers cannot be treated as part of the
composite supply. It is, therefore, clarified that in cases, where agreement for extended warranty is
made at the time of original supply of goods, and the supplier of extended warranty is different from
the supplier of goods, the supply of extended warranty and supply of goods cannot be treated as the
composite supply. In such cases, supply of extended warranty will be treated as a separate supply
from the original supply of goods.
36.5 Further, supply of extended warranty is an assurance to the customers by the manufacturer/
third party that the goods will operate free of defects during the Extended Warranty coverage period,
and in case of any defect attributable to faulty material or workmanship at the time of manufacture,
the same will be repaired/ replaced by the said manufacturer/ third party. Further, whether the goods
will later on require replacement of parts or just repair service or neither during the said extended
warranty period, is also not known at the time of sale/ supply of extended warranty. Thus, Extended
Warranty is in the nature of conveying of an “assurance” and not an actual replacement of part or
repairs and therefore, supply of extended warranty appears to be a supply of service.
3.6 Accordingly, it appears that in cases, where supply of extended warranty is made subsequent
to the original supply of goods, or where supply of extended warranty is to be treated as a separate
supply from the original supply of goods in cases referred in Para 3.4 above, the supply of extended
warranty shall be treated as a supply of services distinct from the original supply of goods, and the
supplier of the said extended warranty shall be liable to discharge GST liability applicable on such
supply of services. To clarify the issue and remove any doubts about the same, it is proposed that
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point (a) and (b) of S. No. 6 of Para 2 of Circular No. 195/07/2023-GST dated 17.07.2023 may be
suitably amended.
4. Accordingly, Law Committee in its meeting held on 08.11.2023 and 25.04.2024 approved the
following amendments/ modifications to be made in Circular No. 195/07/2023-GST dated 17th July
2023 to be made through a Circular as below (draft circular recommended by the Law Committee
attached as Annexure A to the agenda):
a) Wherever, ‘any part,’ ‘parts’ and ‘part(s)’ has been mentioned in Circular No. 195/07/2023-
GST dated 17th July 2023, the same may be read as ‘goods or its parts, as the case may be’.
b) In the Sr. No. 4 of para 2 of the said Circular, in column 3 of the table, after point (c), point (d)
may be added as below: -
4 In the above scenario where the
distributor provides replacement of
parts to the customer as part of warranty
on behalf of the manufacturer,
whether any supply is involved between
the distributor and the manufacturer and
whether the distributor would be
required to reverse the input tax credit in
respect of such replacement of parts?
(d) There may be cases where the distributor
replaces the goods or its parts, as the case may
be to the customer under warranty by using his
stock and then raises a requisition to the
manufacturer for the goods or the parts, as the
case may be. The manufacturer then provides
the said goods or the parts, as the case may be,
to the distributor through a delivery challan,
without separately charging any consideration
at the time of such replenishment. In such a
case, no GST is payable on such replenishment
of goods or the parts, as the case may be.
Further, no reversal of ITC is required to be
made by the manufacturer in respect of the
goods or the parts, as the case may be, so
replenished to the distributor.


c) In the Sr. No. 6 of para 2 of the said Circular, in column 3 of the table, point (a) and (b) may be
amended as below: -

6. Sometimes companies provide
offers of Extended warranty to
(a) If a customer enters in to an agreement of extended
warranty with the supplier of the goods at the time of
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the customers which can be
availed at the time of original
supply or just before the expiry
of the standard warranty period.
Whether GST would be payable
in both the cases?
original supply, then the consideration for such extended
warranty becomes part of the value of the composite
supply, the principal supply being the supply of goods,
and GST would be payable accordingly. However, if the
supply of extended warranty is made by a person
different from the supplier of the goods, then supply of
extended warranty will be treated as a separate supply
from the original supply of goods and will be taxable as
supply of services.

(b) However, in case where a consumer enters into an
agreement of extended warranty at any time after the
original supply, then the same is a separate contract and
GST would be payable by the service provider, whether
manufacturer or the distributor or any third party,
depending on the nature of the contract(i.e. whether the
extended warranty is only for goods or for services or
for composite supply involving goods and services)
(b) In case where a consumer enters into an agreement
of extended warranty at any time after the original
supply, then the same shall be treated as a supply of
services distinct from the original supply of goods and
the supplier of the said extended warranty shall be liable
to discharge GST liability applicable on such supply of
services.


5. Accordingly, agenda, along with the draft circular, is placed before the GST Council for approval.
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Annexure A
Circular No.-XXXXX
F. No. CBIC-20001/7/2024-GST-CBEC
Government of India
Ministry of Finance
Department of Revenue
*****
North Block, New Delhi
Dated the -- XXX, 2024
To,
All the Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax
All the Principal Directors General/ Directors General

Madam/Sir,

Subject: Clarification in respect of Circular No. 195/07/2023-GST dated 17.07.2023-reg.
Reference is invited to Circular No. 195/07/2023-GST dated 17.07.2023 (herein after referred
to as “the said circular”) clarifying certain issues regarding availability of ITC in respect of warranty
replacement of parts and repair services during warranty period. Representations have been received
from trade and industry requesting for clarifications on certain related matters in respect of the said
circular.
2. In order to ensure uniformity in the implementation of the provisions of law across the field
formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods &
Services Tax Act, 2017 (herein after referred to as the ‘CGST Act”), hereby clarifies the following
issues as below.
3. Clarification regarding GST liability and as well liability to reverse input tax credit in
respect of cases where goods as such or the parts are replaced under warranty:

3.1 Table in Para 2 of Circular No. 195/07/2023-GST dated 17.07.2023 clarifies regarding GST
liability as well as liability to reverse ITC, only in cases involving replacement of 'parts' and not if
goods as such are replaced under warranty. Request has been made to also issue a clarification in
respect of cases where the goods as such are replaced under warranty.

3.2 In cases where warranty is provided by the manufacturer/ suppliers to the customers in
respect of any goods, and if any defect is detected in the said goods during the warranty period, the
manufacturer may be required to replace either one or more parts or the goods as such, depending
upon the extent of damage/ defect noticed in the said goods. However, Table in Para 2 of the said
circular only clarifies in respect of the situations involving replacement of part/ parts and does not
specifically refer to the situation involving replacement of goods as such. It is clarified that the
clarification provided in Para 2 of the said circular is also applicable in case where the goods as such
are replaced under warranty.

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3.3 Accordingly, wherever, ‘any part,’ ‘parts’ and ‘part(s)’ has been mentioned in Para 2 of
Circular No. 195/07/2023-GST dated 17th July 2023, the same may be read as ‘goods or its parts, as
the case may be’.

4. Clarification in respect of cases where the distributor replaces the parts/ goods to the
customer as part of warranty out of his own stock on behalf of the manufacturer and
subsequently gets replenishment of the said parts/ goods from the manufacturer:

4.1 Sr. No. 4 of Para 2 of the said Circular clarifies about the GST liability as well as liability to
reverse ITC in cases where the distributor provides replacement of parts to the customer as part of
warranty on behalf of the manufacturer. However, it does not cover the scenario where the distributor
replaces the goods to the customer as part of warranty out of his own stock on behalf of the
manufacturer to provide prompt service to the customer, and then raises a requisition to the
manufacturer for the goods replaced by him under warranty. The manufacturer, thereafter, provides
the said goods to the distributor vide a delivery challan, as replenishment for the goods provided as
replacement to the customer by the distributor. Request has been made to issue clarification in respect
of such a scenario also.
4.2 In cases where the distributor replaces the parts/ goods to the customer as part of warranty out
of his own stock on behalf of the manufacturer and subsequently gets replenishment of the said parts/
goods from the manufacturer, the key aspects, viz.(i) distributor providing replacement out of his own
stock; (ii) manufacturer replenishing the distributor for the said replacement; and (iii) the replacement
being made at no additional cost on the distributor, are all covered in the scenario specified in point
(b) of Sr. No.4 of Para 2 of the said Circular. Therefore, GST liability as well as liability to reverse
ITC in cases covered by the said scenario should be similar to that in respect of the scenario covered
in point (b) of S. No. 4 of Para 2 of the above circular.

4.3 Accordingly, to specifically clarify in respect of such a scenario, in column 3 of the table in
Para 2 of the said circular, against S. No. 4, after point (c), point (d) shall be inserted as below:
“(d) There may be cases where the distributor replaces the goods or its parts to the customer
under warranty by using his stock and then raises a requisition to the manufacturer for the
goods or the parts, as the case may be. The manufacturer then provides the said goods or the
parts, as the case may be, to the distributor through a delivery challan, without separately
charging any consideration at the time of such replenishment. In such a case, no GST is
payable on such replenishment of goods or the parts, as the case may be. Further, no reversal
of ITC is required to be made by the manufacturer in respect of the goods or the parts, as the
case may be, so replenished to the distributor.”

5. (i) Nature of supply of extended warranty, at the time of original supply of goods, as a
separate supply from supply of goods, if the supply of extended warranty is made by a
person different from the supplier of the goods

(ii) Nature of supply of extended warranty, made after original supply of goods:
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5.1 It has been represented that in respect of cases, where agreement for extended warranty
is made at the time of original supply of goods, and the supplier of extended warranty is
different from the supplier of goods, the extended warranty should be treated as a separate and
independent transaction from the supply of goods, whereas Sr. No. 6 of Para 2 of the said
Circular has treated it to be in the nature of composite supplies, the principal supply being the
supply of goods. Request has been made to issue a suitable clarification in the matter.

5.1.1 There may be cases where the supplier for the goods may be the dealer while the supplier of
extended warranty may be the OEM or third party. In such cases, the supplies being made by different
suppliers cannot be treated as part of the composite supply. It is, therefore, clarified that in cases,
where agreement for extended warranty is made at the time of original supply of goods, and the
supplier of extended warranty is different from the supplier of goods, the supply of extended warranty
and supply of goods cannot be treated as the composite supply. In such cases, supply of extended
warranty will be treated as a separate supply from the original supply of goods.

5.2 It has also been represented that in cases where Extended Warranty is sold subsequent to the
original supply of goods, the same should be considered as supply of services only whereas the said
Circular clarifies that GST on the same would be payable depending on the nature of the contract (i.e.
whether the extended warranty is only for goods or for services or for composite supply involving
goods and services). Request has been made to issue a revised clarification in respect of the same.

5.2.1 Supply of extended warranty is an assurance to the customers by the manufacturer/ third
party that the goods will operate free of defects during the Extended Warranty coverage period, and in
case of any defect attributable to faulty material or workmanship at the time of manufacture, the same
will be repaired/ replaced by the said manufacturer/ third party. Further, whether the goods will later
on require replacement of parts or just repair service or neither during the said extended warranty
period, is also not known at the time of sale/ supply of extended warranty. Thus, Extended Warranty
is in the nature of conveying of an “assurance” and not an actual replacement of part or repairs.
5.3 Accordingly, it is clarified that in cases, where supply of extended warranty is made
subsequent to the original supply of goods, or where supply of extended warranty is to be treated as a
separate supply from the original supply of goods in cases referred in Para 5.1.1 above, the supply of
extended warranty shall be treated as a supply of services distinct from the original supply of goods,
and the supplier of the said extended warranty shall be liable to discharge GST liability applicable on
such supply of services.
5.4 Accordingly, in Sr. No. 6 of Table in para 2 of the said Circular, in column No. 3 of the table,
the following shall be substituted:
“(a) If a customer enters into an agreement of extended warranty with the supplier of the
goods at the time of original supply, then the consideration for such extended warranty
becomes part of the value of the composite supply, the principal supply being the supply of
goods, and GST would be payable accordingly. However, if the supply of extended warranty
is made by a person different from the supplier of the goods, then supply of extended warranty
will be treated as a separate supply from the original supply of goods and will be taxable as
supply of services.
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(b) In case where a consumer enters into an agreement of extended warranty at any time after
the original supply, then the same shall be treated as a supply of services distinct from the
original supply of goods and the supplier of the said extended warranty shall be liable to
discharge GST liability applicable on such supply of services.”

6. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.

7. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the
Board.

Sanjay Mangal
Pr. Commissioner (GST)

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Agenda Item 3(xxv): Clarification regarding ITC entitlement on repair expenses incurred in
case of reimbursement mode of claim settlement.
The insurance companies, which are engaged in providing general insurance services in
respect of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred
by the policyholders and settle the claims in two modes i.e., Cashless or Reimbursement.
Representations have been received from the General Insurance Industry seeking clarity on
availability of input tax credit (ITC) in respect of expenses incurred on repair of motor vehicles in
case of reimbursement mode of insurance claim settlement. It has been represented that:
(i) Empanelled garages (Network Garages) offer a credit facility to the insurance companies
and therefore, no payments are required to be made by the policyholder/ insured immediately
at the time of delivery of the vehicle after repairs. The facility is cashless for the policyholder/
insured (to the extent of claim cost approved by the insurance company based on the
Surveyor/ Loss Assessor’s report), and in trade parlance, generally, it is referred to as
Cashless Mode of claim settlement.
(ii) Alternatively, the insured can also avail repair services from non-network garages, with
which the insurance companies do not have routine business relationship, and therefore, there
is no written contract between the insurance companies and the Non-Network Garages to
provide credit facility for the repair costs. Accordingly, the insurance companies require the
policyholder/ insured to make payment of such repair invoice, and subsequently reimburse the
approved claim cost to the policyholder/ insured. In trade parlance, this option is referred to as
the Reimbursement Mode of claim settlement.
(iii) Under both modes of claim settlement, the insurance company accounts for repair
liability (as assessed by the Surveyor/ Loss Assessor) as claim cost and is liable to make
payment of approved repair charges to the garage. In both the cases, the invoices are issued
by the garages in the name of Insurance companies. While in case of Cashless Mode, the
insurance companies directly make the payment of approved repair charge to the Network
Garage, in case of Reimbursement mode, the payment is first made by the Insured to the Non-
Network Garage, which is subsequently reimbursed by the insurance company to the Insured,
to the extent of approved repair/ claim cost.
(iv) The insurance companies are availing input tax credit on the tax paid in respect of such
repair services provided by the garages, in Cashless Mode of claim settlement as well as in
Reimbursement Mode of claim settlement, on the basis of the invoices issued by the garages
in their name.
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(v) In case of reimbursement mode of claim settlement, some field formations are raising
objections on availment of Input tax credit by insurance companies in respect of repair
invoices issued by the non-network garages on insurance companies. It is being claimed that
in case of reimbursement mode of claim settlement, there is no credit facility offered by the
garages to the Insurance Companies and therefore, the supply of repair service is made by the
garage to the policyholder/ insured and not to the insurer. Accordingly, it is being claimed
that ITC of repair invoices, in such cases, should not be available to the insurance companies.
1.2. Reference is drawn to Section 17(5) of the CGST Act, 2017 whereby a specific proviso has
been added which allows ITC in respect of such services received by a taxable person engaged in the
supply of general insurance services in respect of such motor vehicles.
“(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1)
of section 18, input tax credit shall not be available in respect of the following, namely:-
…
(ab) services of general insurance, servicing, repair and maintenance in so far as
they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause
(aa):
Provided that the input tax credit in respect of such services shall be available-
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or
clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged-
(I) in the manufacture of such motor vehicles, vessels or aircraft; or
(II) in the supply of general insurance services in respect of such
motor vehicles, vessels or aircraft insured by him;
…”
1.3. Reference is also drawn to section 16(1) of CGST Act which provides for the conditions and
eligibility criteria for taking ITC as follows:
(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.”
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Therefore, the insurer is eligible to claim ITC only in respect of supply of goods or services or both
which are used or intended to be used in the course or furtherance of business.
1.4. Section 2(93) of the CGST Act defines ‘recipient’ as follows:
(93) “recipient” of supply of goods or services or both, means–
(a) where a consideration is payable for the supply of goods or services or both, the
person who is liable to pay that consideration;
(b) where no consideration is payable for the supply of goods, the person to whom the
goods are delivered or made available, or to whom possession or use of the goods is
given or made available; and
(c) where no consideration is payable for the supply of a service, the person to whom
the service is rendered,
and any reference to a person to whom a supply is made shall be construed as a reference to
the recipient of the supply and shall include an agent acting as such on behalf of the recipient
in relation to the goods or services or both supplied;
2.1. The insurance companies are engaged in the business of providing insurance, inter alia, to
indemnify the damage to the vehicle by getting the said vehicle repaired in case of damage to the
extent provided as per the terms of the insurance policy. Such indemnification can be made by the
insurance company either by getting the vehicle repaired from a Network Garage and making direct
payment of the approved repair cost to the garage or alternatively, by reimbursing the approved cost
of repairs to the insured in case of repairs through a non-network garage. Therefore, the expenditure,
which is incurred in repair of the vehicle, is integrally connected to the provision of insurance
services. Such costs incurred as repair are, therefore, input services to the insurance companies used
in the course and furtherance of their business.
2.2 As per provisions of section 17(5) of CGST Act, 2017 referred in Para 1.2 above, input tax
credit is available in respect of repair and maintenance services of the motor vehicles received by an
insurance company, which is engaged in the supply of general insurance services in respect of such
motor vehicles.
2.3. It is also noted that in respect of insurance services being provided by the insurance
companies, it is the responsibility of the insurance company to get the damaged vehicle repaired, to
the extent covered under the terms of the insurance. The insurance companies get the repair liability
assessed through a Surveyor/ Loss Assessor, and make the payment of such approved repair liability,
either directly to the garage (cashless mode in case of empanelled or networked garages) or through
the insured, by reimbursement of the approved repair liability paid by the insured to the garage
Agenda for 53rd GSTCM Volume 1
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(reimbursement mode in case of non-networked garages). In both the cases, the liability to make the
payment for such repair cost, to the extent of the approved repair liability, lies with the insurance
company only, as it is the insurance company which has indemnified the insured for damage of the
vehicle. As per clause (a) of section 2(93) of CGST Act, 2017 referred in para 1.4 above, the recipient
of a supply of services, in cases where a consideration is payable for the supply of the services, is the
person who is liable to pay that consideration. Further, as per provisions of section 2(93) of CGST
Act, 2017, “recipient” is the person liable to pay the consideration, and not the person who actually
makes the payment in the first instance. As discussed above, in case of insurance services for motor
vehicles, as per the terms of the insurance policy, it is the insurance company, which is liable to make
any consideration to the garage (to the extent of approved repair liability) for repair of the damaged
vehicle. Such liability to pay consideration can be discharged by the insurance company, either by
making direct payment to the garage (in case of cashless mode) or through the insured (in re-
imbursement mode). A mere change in the mode of claim settlement i.e., reimbursement over
cashless settlement cannot alter the underlying nature of transaction. Furthermore, there is no
condition under Section 16 or Section 17 of CGST Act, 2017 or in the definition of ‘recipient’ under
Section 2(93) of CGST Act, 2017 that the actual payment should be made directly by the recipient to
the service provider. Even in a situation where the insurance company has an existing liability to
make the payment and has actually made the payment, albeit, indirectly through the insured, it will be
regarded as a recipient of services. Once the insurance companies have the liability to pay for the
repairs under the contract of indemnity, its liability to pay for the approved repair liability for repair
services provided by the garages (including non-networked garages) cannot be disputed and the
insurance companies alone would be regarded as the ultimate beneficiary of this services. Thus, in
both cashless mode as well as reimbursement mode, insurance company is the “recipient” of the
services of vehicle repair provided by the garage, to the extent of approved repair liability.
2.4 Further, the invoice of such repair services, to the extent of approved repair liability, are also
issued by the garage in favour of insurance company in both cashless as well as reimbursement modes
of payment. Therefore, in terms of the provisions of section 2(93), section 16(1), section 16(2) and
section 17(5) of CGST Act, 2017, input tax credit cannot be denied to the insurance company, merely
because the payment in case of reimbursement mode is not directly made by the insurance company
to the garage, but is routed through the insured.
2.5 However, there may be cases, where the invoice also includes an amount in excess of the
approved repair liability, wherein the insurance company only pays or reimburses the approved repair
liability to the garage after considering the standard deductions viz. the compulsory deductibles to be
borne by the insured, depreciation, improvements outside the coverage, value of salvage of the
damaged parts of the motor vehicles, etc. The remaining amount is to be paid by the insured to the
garage. In such cases, the input tax credit may be available to the insurance company only to the
Agenda for 53rd GSTCM Volume 1
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extent of payment made by them to the garage directly, or through reimbursement to the insured, and
not on the full invoice value.
2.6 There may also be cases, where the invoice for the repair of the vehicle is not issued in name
of the insurance company. In such a case, condition of clause (a) and (aa) of section 16(2) of CGST
Act, 2017 may not be satisfied and accordingly, input tax credit may not be available to the insurance
company in respect of such an invoice.
3. Accordingly, the Law Committee deliberated on the issue in its meeting held on 27.12.2023
and recommended issuance of a circular to clarify the issue. The draft circular recommended by the
Law Committee is enclosed as Annexure A with this agenda.
4. The agenda is placed for approval of the Council.

Agenda for 53rd GSTCM Volume 1
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Annexure A
F. No. CBIC- 20006/5/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****
New Delhi, Dated the -- March, 2024
To,
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Directors General / Directors General (All)
Madam/Sir,
Subject: Entitlement of ITC by the insurance companies on the expenses incurred for repair of
motor vehicles in case of reimbursement mode of insurance claim settlement
The insurance companies, which are engaged in providing general insurance services in
respect of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred
by the policyholders and settle the claims in two modes i.e., Cashless or Reimbursement.
1.2 Under both modes of settlement, the insurance company accounts for repair liability (as
assessed by the Surveyor/ Loss Assessor) as claim cost and is liable to make payment of approved
repair charges to the garage. In both the cases, the invoices are issued by the garages in the name of
Insurance companies. While in case of Cashless Mode, the insurance companies directly make the
payment of approved repair charge to the Network Garage, in case of Reimbursement mode, the
payment is first made by the Insured to the Non-Network Garage, which is subsequently reimbursed
by the insurance company to the Insured, to the extent of approved repair/ claim cost. Accordingly,
the insurance companies are availing input tax credit on the tax paid in respect of such repair services
provided by the garages in Cashless Mode of claim settlement as well as in Reimbursement Mode of
claim settlement on the basis of the invoices issued by the garages in their name.
1.3 It has been represented by the insurance companies that in case of reimbursement mode of
claim settlement, some field formations are raising objections on availment of Input tax credit (ITC)
by insurance companies in respect of repair invoices issued by the non-network garages on insurance
companies. It is being claimed by the field formations that in case of reimbursement mode of claim
Agenda for 53rd GSTCM Volume 1
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settlement, there is no credit facility offered by the garages to the Insurance Companies and therefore,
the supply of repair service is made by the garage to the insured and not to the insurer. Accordingly, it
is being claimed that ITC of repair invoices, in such cases, should not be available to the insurance
companies.
1.4 Request has been received from the insurance companies seeking clarity on availability of
ITC in respect of repair expenses incurred in case of reimbursement mode of claim settlement.
2. In order to ensure uniformity in the implementation of the provisions of the law across field
formations, the Board, in exercise of its powers conferred by section 168(1) of the Central Goods and
Services Tax Act, 2017 (hereinafter referred to as the CGST Act), hereby clarifies the following:
S. No. Issue Clarification
1 The insurance companies, which
are engaged in providing general
insurance services in respect of
insurance of motor vehicles, insure
the cost of repairs/ damages of
motor vehicles incurred by the
policyholders and settle the claims
in two modes i.e., Cashless or
Reimbursement. Whether ITC is
available to insurance companies
in respect of repair expenses
reimbursed by the insurance
company in case of
reimbursement mode of claim
settlement.
Under reimbursement mode of claim settlement, the
insured avails repair services from non-network
garages with which the insurance companies do not
have routine business relationship. The said garages
issue the invoice in the name of the insurance
company while not extending credit facility for the
repair costs. Accordingly, the policy holder/ insured
makes payment of such repair services, and
subsequently, the insurance company reimburses the
approved claim cost to the insured.
Section 17(5) of the CGST Act provides that ITC in
respect of services of repair of motor vehicles shall be
available where received by a taxable person engaged
in the supply of general insurance services in respect
of motor vehicles insured by him.
Section 16 of CGST Act provides that every
registered person shall, subject to such conditions and
restrictions as may be prescribed and in the manner
specified in section 49 of the said Act, 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.
Agenda for 53rd GSTCM Volume 1
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Further, section 2(93) of CGST Act defines
“recipient" of supply of goods or services or both, as
the person who is liable to pay the consideration,
where such consideration is payable for the said
supply of goods or services or both.
Moreover, as per section 2(31) of CGST Act,
consideration includes any payment made or to be
made in relation to supply of the goods or services or
both, whether by the recipient or by any other person.
In reimbursement mode of claim settlement, the
payment is made by the insurance company for the
approved cost of repair services through
reimbursement to the insured. Further, irrespective of
the fact that the payment of the repair services to the
garage is first made by the insured, which is then
reimbursed by the insurance company to the insured
to the extent of the approved claim cost, the liability
to pay for the repair service for the approved claim
cost lies with the insurance company, and thus, the
insurance company is covered in the definition of
“recipient” in respect of the said supply of services of
vehicle repair provided by the garage under section
2(93) of CGST Act, to the extent of approved repair
liability. Moreover, availment of credit in respect of
input tax paid on motor vehicle repair services
received by the insurance company for outward
supply of insurance services for such motor vehicles
is not barred under section 17(5) of CGST Act.
Accordingly, it is clarified that ITC is available to
Insurance Companies in respect of motor vehicle
repair expenses incurred by them in case of
reimbursement mode of claim settlement.
2. Where the invoice raised by the
garage also includes an amount in
excess of the approved claim cost,
In cases where the garage issues two separate
invoices in respect of the repair services, one to the
insurance company in respect of approved claim cost
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the insurance company only
reimburses the approved claim cost
to the garage after considering the
standard deductions viz. the
compulsory deductibles to be
borne by the insured, depreciation,
improvements outside the
coverage, value of salvage of the
damaged parts of the motor
vehicles, etc. The remaining
amount is to be paid by the insured
to the garage.
What is the extent of ITC available
to the insurer in such cases?
and second to the customer for the amount of repair
service in excess of the approved claim cost, input tax
credit may be available to the insurance company on
the said invoice issued to the insurance company
subject to reimbursement of said amount by insurance
company to the customer.
However, if the invoice for full amount for repair
services is issued to the insurance company while the
insurance company makes reimbursement to the
insured only for the approved claim cost, then, the
input tax credit may be available to the insurance
company only to the extent of reimbursement of the
approved claim cost to the insured, and not on the full
invoice value.
3. Whether ITC is available to the
insurer where the invoice for the
repair of the vehicle is not in name
of the insurance company.
In such a case, condition of clause (a) and (aa) of
section 16(2) of CGST Act is not satisfied and
accordingly, input tax credit will not be available to
the insurance company in respect of such an invoice.


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Agenda Item 3(xxvi): Clarification regarding taxability of the transaction of providing loan by
an overseas affiliate to its related Indian affiliate or by a person in India to a related person.
Representations have been received from trade and industry seeking clarity on whether there
is any supply involved in the transaction of granting of loan by a person to a related person or by an
overseas affiliate to its related Indian entity, where the consideration being paid is only by way of
interest, and whether any GST is applicable on the same.
2. Relevant legal provisions:
2.1 Section 2 of CGST Act, 2017:
2(31) "consideration" in relation to the supply of goods or services or both includes-
(a) any payment made or to be made, whether in money or otherwise, in respect
of, in response to, or for the inducement of, the supply of goods or services or both,
whether by the recipient or by any other person but shall not include any subsidy
given by the Central Government or a State Government;
2(102) "services" means anything other than goods, money and securities but includes
activities relating to the use of money or its conversion by cash or by any other mode, from one
form, currency or denomination, to another form, currency or denomination for which a
separate consideration is charged;
2.2 Section 7. Scope of supply.-
(1) For the purposes of this Act, the expression - "supply" includes-
(a) all forms of supply of goods or services or both such as sale, transfer, barter,
exchange, licence, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business;
…
(c) the activities specified in Schedule I, made or agreed to be made without a
consideration;

2.3 Schedule I of CGST Act, 2017: Activities to be treated as supply even if made without
consideration-
2) Supply of goods or services or both between related persons or between distinct
persons as specified in section 25, when made in the course or furtherance of business:
..
(4) Import of services by a person from a related person or from any of his other
establishments outside India, in the course or furtherance of business.
2.4 Section 15. Value of Taxable Supply.-
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(1) The value of a supply of goods or services or both shall be the transaction value, which is
the price actually paid or payable for the said supply of goods or services or both where the
supplier and the recipient of the supply are not related and the price is the sole consideration
for the supply.
..
(4) where the value of the supply of goods or services or both cannot be determined under
sub-section (1), the same shall be determined in such manner as may be prescribed.
(5) Notwithstanding anything contained in sub-section (1) or sub-section (4), the value of
such supplies as may be notified by the Government on the recommendations of the Council
shall be determined in such manner as may be prescribed.
Explanation. - For the purposes of this Act,-
(a) persons shall be deemed to be "related persons" if-
…..
(iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or
more of the outstanding voting stock or shares of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;

3. Doubts are being raised regarding the taxability and valuation of the services of processing/
administering/ facilitating the loan provided by a person to a related person or by an overseas affiliate
to its related person in India, even when made without consideration, by deeming the same as supply
as per clause (c) of sub-section (1) of section 7 of the CGST Act, 2017, read with S. No. 2 and S. No.
4 of Schedule I of CGST Act.


4. Analysis and Proposal:

4.1 The foreign entity/ foreign company and its affiliate in India, hereinafter referred as Indian
entity, may be related persons as per the Explanation to the sub-section (5) of Section 15 of CGST
Act, 2017. Further, as per clause (c) of sub-section (1) of section 7 of the CGST Act, 2017, read with
S. No. 2 and S. No. 4 of Schedule I of CGST Act, supply of goods or services or both between related
persons, when made in the course or furtherance of business, shall be treated as supply, even if made
without consideration. Therefore, it is evident that the service of granting loan/ credit/ advances by an
entity to its related entity, made with consideration in form of loan or discount, or even without
consideration, is a supply under GST.

4.2 Services by way of extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount (other than interest involved in credit card services) are
exempted under sub entry (a) of entry 27 of Notification No. 12/2017-Central Tax (Rate). The said
entry is reproduced below:
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S.
No.
Chapter, Section,
Heading, Group
or Service Code
(Tariff)
Description of Services
Rate
(per
cent.)
Condition
27 Heading 9971
Services by way of—
(a) extending deposits, loans or advances
in so far as the consideration
is represented by way of interest or discount
(other than interest involved in credit card
services);
Nil Nil

As per the said entry, the supply of services of granting loans/ credit/ advances, in so far as
the consideration is represented by way of interest or discount, is fully exempt under GST.

4.3 At the same time, it is to mention that as a general practice, overseas affiliates or domestic
related persons generally charge no consideration in form of processing fee/ service fee, other that the
consideration by way of interest or discount on the loan amount. The processing fee/ service fee is
generally a one-time charge that lenders levy on applicants when they apply for a loan. This fee is
generally non-refundable and is used to cover the administrative costs of processing the loan
application. Charges of any other nature in respect of loan, other than by way of interest or discount,
would represent taxable consideration for providing the facilitation/ processing/ administration
services for the loan and hence would be liable to GST. This has been clarified in point number 42 in
the Sectoral FAQ on Banking, Insurance and Stock Brokers Sector issued by CBIC.

S. No Question Answer
42 If any service charges or administrative
charges or entry charges are recovered in
addition to interest on a loan, advance or a
deposit, would such charges be also a part of
the exemption?
No. The services of loans, advances or
deposits are exempt in so far as the
consideration is represented by way of
interest or discount. Any charges or
amounts collected over and above the
interest or discount would represent
taxable consideration and hence liable
to GST.

4.4 Doubts are being raised as to whether there is any supply of ‘processing/ administrative/
facilitation service’ involved in all the situations where the activity of granting credit/loan takes place,
including where such loan is provided by the overseas affiliate to its related Indian affiliate or by a
person to a related person without charging any consideration, other than by way of interest or
discount.

4.5 It is significant to note that the processing/ service fee is generally charged by the bank/
financial institution from the recipient of the loan in order to cover the administrative cost of
processing the loan application. An independent lender will carry out a thorough credit assessment of
the potential borrower to identify and evaluate the risks involved and to consider methods of
monitoring and managing these risks. Such credit assessment will include understanding the business
of the applicant, as well as the purpose of the loan, financial standing and credibility of the applicant,
how it is to be structured and the source of its repayment which may include analysis of the
borrower’s cash flow forecasts, the strength of the borrower’s balance sheet, and where any collateral
is offered, due diligence on the collateral offered may also be required to be carried out. To cover
such costs, the independent lender generally collects a fee that is in the nature of processing fee/
administrative charges/ service fee/ loan granting charges, which is leviable to GST.
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4.6 However, when an entity is extending a loan to a related entity, it may not be required to
follow such processes as are followed by an independent lender. For example, it may not need to go
through the same process of information gathering about the borrower’s business, his financial
standing and credibility, and other details, as the required information may already be readily
available within the group, or between related persons. The lender may not also take any collateral
from the borrower. Accordingly, in case of loans provided between related parties, there may not be
the activity of ‘processing’ the loan, i.e. there may not be any administrative cost involved to the
lender in granting the loan. Therefore, it may not be desirable to place the services being provided for
processing the loans by banks or independent lenders vis-a-vis the loans provided by a related party,
on equal footing.
4.7 Even in case of loans provided between unrelated parties, there may not be any processing
fee/ administrative charges/ loan granting charges etc., based on the relationship between the bank/
independent lender and the person taking the loan. The lender might waive off the administrative
charges in full, based on the nature and amount of loan granted, as well as based on the relationship
between the lender and the concerned person taking the loan.
4.8 Accordingly, in the cases, where no consideration is charged by a person from a related
person, or by an overseas affiliate from its related Indian entity, for extending loan or credit, other
than by the way of interest or discount, it cannot be said that any supply of service is being provided
between the said related persons in form of processing/ facilitating/ administering the loan, by
deeming the same as supply of services as per clause (c) of sub-section (1) of section 7 of the CGST
Act, 2017, read with S. No. 2 and S. No. 4 of Schedule I of CGST Act. Accordingly, there is no
question of levy of GST on the same by resorting to open market value for valuation of the same as
per rule 28 of CGST Rules, 2017.
4.9 However, in cases of loans provided between related parties, wherever any fee in the nature of
processing fee/ administrative charges/ service fee/ loan granting charges etc. is charged, over and
above the amount charged by the way of interest or discount, the same may be considered to be the
consideration for the supply of services of supply of services of processing/ facilitating/ administering
of the loan, which will be liable to GST as supply of services by the lender to the related person
availing the loan.

5. Law Committee in its meeting held on 20.12.2023 deliberated on the issue and recommended
issuing a circular to clarify the same as above. The circular recommended by the Law Committee is
enclosed as Annexure-A to this agenda.

6. Accordingly, the recommendations of the Law Committee as detailed in para 4 above are
placed before the GST Council for approval.

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Annexure A
Circular No. XX/XX/2023-GST
F. No. CBIC-20001/12/2023-GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification regarding taxability of the transaction of providing loan by an overseas
affiliate to its Indian affiliate or by a person to a related person.
Representations have been received from trade and industry seeking clarity on whether there
is any supply involved in the transaction of granting of loan by a person to a related person or by an
overseas affiliate to its Indian entity, where the consideration being paid is only by way of interest or
discount, and whether any GST is applicable on the same.
2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions
of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of
the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby
clarifies the issues as under:

S.
No.
Issue Clarification
Clarification regarding taxability of the transaction of providing loan by an overseas entity
to its Indian related entity or by a person in India to a related person
1 Whether the activity of
providing loans by an
overseas affiliate to its Indian
affiliate or by a person to a
related person, where there is
no consideration in the nature
of processing fee/
administrative charges/ loan
granting charges etc., and the
consideration is represented
1. As per clause (c) of sub-section (1) of section 7 of
the CGST Act, 2017, read with S. No. 2 and S. No. 4 of
Schedule I of CGST Act, supply of goods or services or
both between related persons, when made in the course
or furtherance of business, shall be treated as supply,
even if made without consideration. Therefore, it is
evident that the service of granting loan/ credit/
advances by an entity to its related entity is a supply
under GST.
Agenda for 53rd GSTCM Volume 1
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only by way of interest or
discount, will be treated as a
taxable supply of service
under GST or not.
2. Services by way of extending deposits, loans or
advances in so far as the consideration is represented
by way of interest or discount (other than interest
involved in credit card services) are exempted under sub
entry (a) of entry 27 of Notification No. 12/2017-Central
Tax (Rate). Therefore, it is clear that the supply of services
of granting loans/ credit/ advances, in so far as the
consideration is represented by way of interest or discount,
is fully exempt under GST.

3. It is mentioned that overseas affiliates or
domestic related persons are generally charging no
consideration in the form of processing fee/ service fee,
other than the consideration by way of interest or
discount on the loan amount. Doubts are being raised
regarding the taxability of the services of processing/
administering/ facilitating the loan in such cases, by
deeming the same as supply as per clause (c) of sub-
section (1) of section 7 of the CGST Act, 2017, read
with S. No. 2 and S. No. 4 of Schedule I of CGST Act.
The processing fee/ service fee is generally a one-time
charge that lenders levy on applicants when they apply
for a loan. This fee is generally non-refundable and is
used to cover the administrative cost of processing
the loan application. Charges of any other nature in
respect of loan, other than by way of interest or
discount, would represent taxable consideration for
providing the facilitation/ processing/ administration
services for the loan and hence would be liable to GST.
This has been clarified at serial number 42 in the
Sectoral FAQ on Banking, Insurance and Stock Brokers
Sector issued by CBIC.


4. It is significant to note that the processing/
service fee is generally charged by the bank/ financial
institution from the recipient of the loan in order to
cover the administrative cost of processing the loan
application. An independent lender may carry out a
thorough credit assessment of the potential borrower to
identify and evaluate the risks involved and to consider
methods of monitoring and managing these risks. Such
credit assessment may include understanding the
business of the applicant, as well as the purpose of the
loan, financial standing and credibility of the applicant,
how it is to be structured and the source of its
repayment which may include analysis of the
borrower’s cash flow forecasts, the strength of the
borrower’s balance sheet, and where any collateral is
offered, due diligence on the collateral offered may also
be required to be carried out To cover such costs, the
independent lender generally collects a fee that is in the
nature of processing fee/ administrative charges/ service
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fee/ loan granting charges, which is leviable to GST.
5. However, when an entity is extending a loan to a
related entity, it may not require to follow such
processes as are followed by an independent lender. For
example, it may not need to go through the same
process of information gathering about the borrower’s
business, his financial standing and credibility and other
details, as the required information may already be
readily available within the group, or between related
persons. The lender may not also take any collateral
from the borrower. Accordingly, in case of loans
provided between related parties, there may not be the
activity of ‘processing’ the loan, and no administrative
cost may be involved in granting such a loan. Therefore,
it may not be desirable to place the services being
provided for processing the loans by banks or
independent lenders vis-a-vis the loans provided by a
related party, on equal footing.
6. Even in case of loans provided between
unrelated parties, there may not be any processing fee/
administrative charges/ loan granting charges etc.,
based on the relationship between the bank/
independent lender and the person taking the loan. The
lender might waive off the administrative charges in
full, based on the nature and amount of loan granted, as
well as based on the relationship between the lender and
the concerned person taking the loan.
7. Accordingly, in the cases, where no
consideration is charged by the person from the related
person, or by an overseas affiliate from its Indian party,
for extending loan or credit, other than by the way of
interest or discount, it cannot be said that any supply of
service is being provided between the said related
persons in form of processing/ facilitating/
administering the loan, by deeming the same as supply
of services as per clause (c) of sub-section (1) of section
7 of the CGST Act, 2017, read with S. No. 2 and S. No.
4 of Schedule I of CGST Act. Accordingly, there is no
question of levy of GST on the same by resorting to
open market value for valuation of the same as per rule
28 of CGST Rules, 2017.

8. However, in cases of loans provided between
related parties, wherever any fee in the nature of
processing fee/ administrative charges/ service fee/ loan
granting charges etc. is charged, over and above the
amount charged by the way of interest or discount, the
same may be considered to be the consideration for the
supply of services of processing/ facilitating/
administering of the loan, which will be liable to GST
as supply of services by the lender to the related person
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availing the loan.

3. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.

4. Difficulties, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)



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Agenda Item 3(xxvii): – Clarification on availability of input tax credit on ducts and manholes
used in network of optical fibre cables (OFCs).
Representations have been received from Cellular Operators Association of India (COAI)
submitting that input tax credit (ITC) is being denied by some tax authorities on ducts and manholes
used in network of optical fibre cables (OFCs) on the ground that the same is blocked as per section
17(5) of the CGST Act, 2017, being in nature of immovable property (other than Plant and
Machinery).
2. It has been requested to issue clarification in respect of availability of ITC on ducts and
manholes used in network of optical fibre cables (OFCs) so as to prevent unwarranted litigation in the
telecommunication sector across the country.
3. According to COAI, optical fibre cables (OFCs) network is one of the key components of
telecommunication network and constitutes a very significant portion of the total input cost in the
telecom sector. The OFC network is laid with the use of PVC ducts/sheaths in which OFCs are
housed and service/connectivity manholes that are necessary for not only laying of cable but also their
upkeep and maintenance. These manholes or connectivity dumps also serve as nodes of the network.
These are basic components for the OFC network, which is a piece of vital equipment used in
providing telecommunication services and are also capitalized as plants and machinery in the books of
telecom operators. COAI has submitted that these squarely fall in the definition of ‘plant and
machinery’. Brief details of the said components are as under:
Components Details Sample pictures
Optical Fiber
cable (OFC)
The function of OFCs is
transmission of telecommunication
signals from one point to another.

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Optical Ducts
(OD)
These are normally HDPE ducts
used in OFC laying work. The main
functions of the ODs are -
a. To protect the cable from
cuts, soil pressure etc.
b. To act as a conduit and
facilitate blowing of cables
underground. The ducts are
lined with special powder
which ensures frictionless
pulling of the fiber. The
internal cavity of the ducts
(365mm) is more than the
maximum dia- of the fiber
(215 mm) to facilitate
housing and pulling of
OFCs.
c. The colour coding on ODs
helps define the nature of
network at a particular
location.

Manholes All the manholes in the city area are
FRP (Fiber Reinforce Plastic)
tubeless section with each manhole
consisting of four side sections that
Unassembled Manhole panels
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are joined using nuts and bolts
which are placed on a plain cement
concrete (PCC) slab and not bolted
or grouted to PCC slab.
These are removable and
relocatable as per the need of the
network. Normally 6 – 7 manholes
are installed over a length of 1 km
in a city with a manhole located
every 150-200 mts (avg 175 mts).
The manholes perform the
following functions
a. Retaining spare OFC for
replacement. 15 meters
long coil of spare OFC is
kept in alternate manholes
for immediate replacement
in the event of cut/damaged
to OFC.
b. The manholes house fiber
to fiber splicing or joints
using splice boxes which
are used for attaching one
length of the fiber to
another. Normally OFCS
come in 1 km to 2 km rolls
on a drum.
c. For right angle turns to
meet the network needs, the
manholes also house the
joint boxes and joint
closures.


Assembled Manhole:
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Inside of a manhole


4.1 The issue has been examined. The matter pertains to denial of input tax credit in respect of
ducts and manholes used in network of optical fibre cables (OFCs) as a result of interpretation of the
provisions of clause (c) and (d) of sub-section (5) of section 17 of the CGST Act, 2017, read with the
Explanation after clause (d) of sub-section (5) of section 17 of CGST Act, which read as under:
“(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (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;
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(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
re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation,
to the said immovable property;”
4.2 It can be seen that the said provisions restrict availment of ITC in respect of inputs and input
services for construction of an immovable property in circumstances specified therein. However, ITC
in respect of plant and machinery has not been restricted as such. For the purpose of said provisions of
section 17 of CGST Act, “plant and machinery” is defined in the Explanation to section 17 of CGST
Act, as under:
“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.”
4.3 Plain reading of the aforementioned provisions indicate that as per clause (c) of sub-section (5)
of section 17 of CGST Act, input tax credit is not available in respect of work contract services, used
for construction of immovable property (other than plant and machinery), except where it is used as
input services for providing further work contract services. Further, as per clause (d) of sub-section
(5) of section 17 of CGST Act, input tax credit is not available in respect of goods or services or both,
used for construction of immovable property (other than plant and machinery) by a taxable person on
his own account. Therefore, input credit is not restricted as per the above clauses in respect of goods
or services or both, which are not used for construction of immovable property. Even if the goods or
services or both are used for construction of immovable property, input tax credit is not restricted on
the same as per the above clauses, if the said immovable property is in nature of plant and machinery
as per Explanation at the end of section 17 of CGST Act.
4.4 It may be noted that as per details provided in Para 3 above, ducts and manholes are basic
components for the OFC network, which is one of the key component in providing telecommunication
services. The OFC network is laid with the use of PVC ducts/sheaths in which OFCs are housed and
service/connectivity manholes, which serve as nodes of the network, and are necessary for not only
Agenda for 53rd GSTCM Volume 1
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laying of cable but also their upkeep and maintenance. Accordingly, it appears the ducts and manholes
are used in network of optical fibre cables (OFCs) in telecom sector for laying of optical fibre cables
and their upkeep and maintenance. In light of the Explanation to section 17 of the CGST Act, it
appears that being used as part of the OFC network for making outward supply of transmission of
telecommunication signals from one point to another, these ducts and manholes appear to be covered
under the definition of “plant and machinery”. Moreover, ducts and manholes used in network of
optical fibre cables (OFCs) have not been specifically excluded from the definition of “plant and
machinery” in the Explanation to section 17 of CGST Act as these components are neither in nature of
land, building or civil structures nor are in nature of telecommunication towers or pipelines laid
outside the factory premises. Accordingly, availment of input tax credit does not appear to be
restricted in respect of such ducts and manhole used in network of optical fibre cables (OFCs), either
under clause (c) or under clause (d) of sub-section (5) of section 17 of CGST Act.
5. In view of the above, to avoid divergent interpretations, remove confusion and prevent
avoidable litigation, the Law Committee in its meeting held on 20.12.2023 recommended to clarify
the issue through a circular as below:
Issue Clarification
Whether the input tax credit
on the ducts and manholes
used in network of optical
fibre cables (OFCs) for
providing
telecommunication services
is barred in terms of clauses
(c) and (d) of sub-section
(5) of section 17 of the
CGST Act, read with
Explanation to section 17 of
CGST Act, 2017?
1. Sub-section (5) to Section 17 of the CGST Act, 2017 provides
that input tax credit shall not be available, inter alia, in respect
of the following:
i. 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; or
ii. 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.
2. Explanation after section 17 of CGST Act provides that 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 land, building or any other civil structures;
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telecommunication towers; and pipelines laid outside the
factory premises.
3. Ducts and manholes are basic components for the optical fibre
cable (OFC) network used in providing telecommunication
services. The OFC network is generally laid with the use of
PVC ducts/ sheaths in which OFCs are housed and service/
connectivity manholes, which serve as nodes of the network,
and are necessary for not only laying of optical fibre cable but
also their upkeep and maintenance. In view of the Explanation
to section 17 of the CGST Act, it appears that ducts and
manholes are covered under the definition of “plant and
machinery” as they are used as part of the OFC network for
making outward supply of transmission of telecommunication
signals from one point to another. Moreover, ducts and
manholes used in network of optical fibre cables (OFCs) have
not been specifically excluded from the definition of “plant and
machinery” in the Explanation to section 17 of CGST Act, as
they are neither in nature of land, building or civil structures nor
are in nature of telecommunication towers or pipelines laid
outside the factory premises.
4. Accordingly, it is clarified that availment of input tax credit is
not restricted in respect of such ducts and manhole used in
network of optical fibre cables (OFCs), either under clause (c)
or under clause (d) of sub-section (5) of section 17 of CGST
Act.

5. The draft circular as per the above recommendations of the Law Committee is enclosed as
Annexure A with this agenda.
6. Accordingly, the agenda is placed before the Council for approval.




Agenda for 53rd GSTCM Volume 1
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Annexure A
Circular No.-XXXXX
F. No. CBIC-20001/7/2024-GST-CBEC
Government of India
Ministry of Finance
Department of Revenue
*****
North Block, New Delhi
Dated the -- XXX, 2024
To,
All the Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax
All the Principal Directors General/ Directors General

Madam/Sir,

Subject: Clarification on availability of input tax credit on ducts and manholes used in network
of optical fibre cables (OFCs) in terms of section 17(5) of the CGST Act, 2017 - reg.
Representations have been received from Cellular Operators Association of India (COAI)
submitting that input tax credit (ITC) is being denied by some tax authorities on ducts and manholes
used in network of optical fibre cables (OFCs) on the ground that the same is blocked as per section
17(5) of the CGST Act, 2017, being in nature of immovable property (other than Plant and
Machinery). It has been requested to issue clarification in respect of availability of ITC on ducts and
manholes used in network of optical fibre cables (OFCs), so as to prevent unwarranted litigation in the
telecommunication sector across the country.
2. In order to ensure uniformity in the implementation of the provisions of law across the field
formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods &
Services Tax Act, 2017 (herein after referred to as the ‘CGST Act”), hereby clarifies the issue as
below.
Issue Clarification
Whether the input tax credit
on the ducts and manholes
used in network of optical
fibre cables (OFCs) for
providing
telecommunication services
is barred in terms of clauses
(c) and (d) of sub-section
1. Sub-section (5) to Section 17 of the CGST Act, 2017 provides
that input tax credit shall not be available, inter alia, in respect
of the following:
i. 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; or
ii. goods or services or both received by a taxable person
Agenda for 53rd GSTCM Volume 1
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(5) of section 17 of the
CGST Act, read with
Explanation to section 17 of
CGST Act, 2017?
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.
2. Explanation after section 17 of CGST Act provides that 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 land, building or any other civil structures;
telecommunication towers; and pipelines laid outside the
factory premises.
3. Ducts and manholes are basic components for the optical fibre
cable (OFC) network used in providing telecommunication
services. The OFC network is generally laid with the use of
PVC ducts/ sheaths in which OFCs are housed and service/
connectivity manholes, which serve as nodes of the network,
and are necessary for not only laying of optical fibre cable but
also their upkeep and maintenance. In view of the Explanation
to section 17 of the CGST Act, it appears that ducts and
manholes are covered under the definition of “plant and
machinery” as they are used as part of the OFC network for
making outward supply of transmission of telecommunication
signals from one point to another. Moreover, ducts and
manholes used in network of optical fibre cables (OFCs) have
not been specifically excluded from the definition of “plant and
machinery” in the Explanation to section 17 of CGST Act, as
they are neither in nature of land, building or civil structures nor
are in nature of telecommunication towers or pipelines laid
outside the factory premises.
4. Accordingly, it is clarified that availment of input tax credit is
not restricted in respect of such ducts and manhole used in
network of optical fibre cables (OFCs), either under clause (c)
or under clause (d) of sub-section (5) of section 17 of CGST
Act.
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3. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.

4. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the
Board.

Sanjay Mangal
Pr. Commissioner (GST)


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Agenda Item 3(xxviii): Clarification on place of supply of custodial services provided by banks
to Foreign Portfolio Investors.
Reference has been received from the Indian Banks’ Association seeking clarification
regarding the place of supply in cases of provision of custodial services by the banks to the Foreign
Portfolio Investors (hereinafter referred to as “FPIs”) .
2. Background
2.1 As per the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2019, all FPIs are statutorily obligated to appoint a local custodian to manage transactions in
'securities' that are undertaken in India. Various banks enter into custodian agreements with the FPIs
for the provision of such custodial services. The main activity carried out by banks as a custodian in
relation to custodial service is maintaining account of the securities held by the FPIs.
2.2 According to the Securities and Exchange Board of India (Custodian of Securities)
Regulations 1996, ‘Custodial Services’ in relation to securities means safekeeping of securities
of a client and providing services incidental thereto, and includes-
(i) maintaining accounts of securities of a client;
(ii) collecting the benefits or rights accruing to the client in respect of securities;
(iii) keeping the client informed of the actions taken or to be taken by the issuer of securities,
having a bearing on the benefits or rights accruing to the client; and
(iv) maintaining and reconciling records of the services referred above.
2.3 As per Regulation 20(1) of the Securities and Exchange Board of India (Foreign Portfolio
Investors) Regulations, 2019, an FPI is allowed to invest only in the following securities, namely
(a) shares, debentures and warrants issued by a body corporate; listed or to be listed on a
recognized stock exchange in India;
(b) units of schemes launched by mutual funds under Chapter V, VI-A and VI-B of the Securities
and Exchange Board of India (Mutual Fund) Regulations, 1996;
(c) units of schemes floated by a Collective Investment Scheme in accordance with the Securities
and Exchange Board of India (Collective Investment Schemes) Regulations, 1999;
(d) derivatives traded on a recognized stock exchange;
(e) units of real estate investment trusts, infrastructure investment trusts and units of Category III
Alternative Investment Funds registered with the Board;
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(f) Indian Depository Receipts;
(g) any debt securities or other instruments as permitted by the Reserve Bank of India for foreign
portfolio investors to invest in from time to time; and
(h) such other instruments as specified by the Board from time to time.
3. Representation received from the Indian Banks’ Association (IBA)

The IBA has contended that the Place of Supply (hereinafter referred to as “PoS”) in such
cases should be determined as per Section 13(2) of IGST Act, 2017 i.e. the PoS should be the location
of the recipient of custodial services (in this case, outside India as FPIs are located outside India).
Therefore, supply of custodial services by the banks to the FPIs should be considered as export of
services and accordingly the same should be eligible for refund as zero rated supply.

4. View taken by field formations
Some field formations have taken a view that the PoS in case of ‘custodial service’ would be
determined as per Section 13(8)(a) of the IGST Act, 2017 i.e. the location of the service provider
(banks or financial institutions) and have, accordingly, rejected refund claims filed for accumulated
ITC, on account of export of services without payment of taxes, contending that custodial services
do not qualify as zero-rated supplies as the PoS is within the taxable territory and thus, the condition
of the PoS of the said services being outside India as specified under Section 2(6)(iii) of IGST Act,
2017 is not met.

5. Relevant Legal Provisions
Section 13 of IGST Act,2017 provides for place of supply of services in cases where location of the
supplier or the location of the recipient is outside India. Section 13 of IGST Act, 2017 is reproduced
as below:

Section 13. Place of supply of services where location of supplier or location of
recipient is outside India.-
( 1 ) The provisions of this section shall apply to determine the place of supply of
services where the location of the supplier of services or the location of the recipient of
services is outside India.

( 2 ) The place of supply of services except the services specified in sub-sections (3) to
(13) shall be the location of the recipient of services:
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…………………..
…………………..
………………….
( 8 ) The place of supply of the following services shall be the location of the supplier of
services, namely:-
( a ) services supplied by a banking company, or a financial institution, or a non-
banking financial company, to account holders;
…………………….
…………………….
Explanation . - For the purposes of this sub-section, the expression,-
(a) " account " means an account bearing interest to the depositor, and includes a
non-resident external account and a non-resident ordinary account;
(b) " banking company " shall have the same meaning as assigned to it under clause
( a ) of section 45A of the Reserve Bank of India Act, 1934;
6. Analysis
6.1. Various banks have Custodian Agreements with FPIs for the provision of custodial services.
The provision of custodial services is regulated by the Securities Exchange Board of India (SEBI)
and can be provided only by licenced custodians under the SEBI (Custodian of Securities),
Regulations, 1996 ('SEBI Custodian Regulations'). All FPIs are statutorily obligated to appoint a
local custodian to manage transactions in 'securities' that are undertaken in India as per the Securities
and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 (hereinafter referred to
as SEBI (FPI) regulations). FPIs desiring to invest in the Indian Capital Market enter into an
agreement for custodial services with a domestic custodian. The scope of services provided to FPIs
by a custodian are detailed in para 2.2 above.
6.2 As per section 13(8) of IGST Act, 2017, the place of supply of the services provided by banks
or financial institutions etc. to its account holders in relation to account bearing interest to the
depositor, would be the location of the bank. In all other services provided by banks to its customers
(other than holders of interest bearing accounts) would be governed by the default rule i.e. the
location of recipient.
6.3.1 Identical position existed during the service tax regime. The Place of Provision of Service
under Service Tax was governed by the Service Tax Place of Provision of Supply Rules, 2012. Rule
9(a) of the Service Tax Place of Provision of Supply Rules, 2012 was identical to section 13 (8) of
IGST Act, 2017 and read as follows:
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Rule 9., the Place of provision of specified services: - The place of provision of following
services shall be the location of the service provider:-
(a) Services provided by a banking company, or a financial institution, or a non-banking
financial company, to account holders.
(b) ….]
6.3.2. The terms ‘account’, ‘banking company’ and ‘financial institutions’ are identically worded
in Rule 2 of the Place of Provision of Supply Rules, 2012 as in the Explanation to sub-section 13 (8)
of the IGST Act, 2017. As the position in GST is same as was in erstwhile Service Tax, the circulars
and clarifications issued during the erstwhile Tax regime can be relied upon to clarify the legal
position in GST also.
6.3.3 The Education Guide under the Service Tax Law clarified the scope of the term “account
holder” and the services provided by banks to account holders as well as the services which are not
provided to account holders.
Question: 5.9.2 What is the meaning of "account holder "? Which accounts are not covered
by this rule?
Answer: "Account" has been defined in the rules to mean an account which bears an interest
to the depositor. Services provided to holders of demand deposits, term deposits, NRE (non-
resident external) accounts and NRO (non-resident ordinary) accounts will be covered
under this rule.
Question: 5.9.3 What are the services that are provided by a banking company to an account
holder (holder of an account bearing interest to the depositor)?
Answer: Following are examples of services that are provided by a banking company or
financial institution to an “account holder”, in the ordinary course of business:-
i) services linked to or requiring opening and operation of bank accounts such as
lending, deposits, safe deposit locker etc;
ii) transfer of money including telegraphic transfer, mail transfer, electronic transfer
etc.
Question: 5.9.4 What are the services that are not provided by a banking company or
financial institution to an account holder, in the ordinary course of business, and will
consequently be covered under another Rule?
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Answer: Following are examples of services that are generally NOT provided by a banking
company or financial institution to an account holder (holder of a deposit account bearing
interest), in the ordinary course of business:-
i) financial leasing services including equipment leasing and hire purchase;
ii) merchant banking services;
iii) Securities and foreign exchange (forex) broking, and purchase or sale of foreign
currency, including money changing;
iv) asset management including portfolio management, all forms of fund management,
pension fund management, custodial, depository and trust services
In the case of any service which does not qualify as a service provided to an account
holder, the place of provision will be determined under the default rule i.e. the Main
Rule 3. Thus, it will be the location of the service receiver where it is known
(ascertainable in the ordinary course of business), and the location of the service
provider otherwise.”

7. Thus, as per the clarification given in Education Guide under the Service Tax Law, the
custodial services are not covered under the service provided by banks to its account holders but are
covered under the services which are not provided to account holders and accordingly, the place of
supply of the custodial services by banks to FPIs have been treated as the location of the
recipient as per the default rule, i.e., Rule 3 of the Place of Provision of Supply Rules, 2012.

8. The similar provision, as was existing in Service Tax regime, has been brought out in GST
regime vide Section 13 (8) of the IGST Act, 2017 for Place of Supply in respect of services provided
by a banking company or a financial institution or a non-banking financial company to account
holders, along with definitions of “account”, “banking Company”, “financial institution” and “non-
banking financial company” in Explanation to Section 13 (8). It is also mentioned that a clarification,
similar to that given for service tax in Education Guide, has also been given in GST regime in the
form of FAQs on Banking, Insurance and Stockbrokers Sector (updated as on 27 December 2018),
as below:
Q.51 — Which services do not qualify as services provided to 'account holder' as per Section
13(8) of the IGST Act, 2017 and thus the place of supply will be the location of the recipient
of services?
A.51 - Following are examples of services that are generally not provided by a banking
company or financial institution to an account holder (holder of a deposit account bearing
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interest to the depositor including NRE and NRO account holders) in the ordinary course of
business:
(i) financial leasing services including equipment leasing and hire-purchase;
(ii) merchant banking services;
(iii) securities and foreign exchange (forex) broking, and purchase or sale of foreign
including money changing; including portfolio management, custodial, depository and
trust services.
9. Accordingly, as per clarification given in Education Guide given in Service Tax regime as well
as that given in FAQs on Banking, Insurance and Stockbrokers Sector (updated as on 27 December
2018) provided under GST, it is clear that the custodial services being provided by the
banks/financial institutions to the FPIs cannot be considered as the services provided by the
banks/financial institutions to account holders and thus, cannot be covered under Section 13(8)(a) of
the IGST Act, 2017. Accordingly, the Place of Supply of such services cannot be determined under
Section13(8)(a) of the IGST Act, 2017 but is required to be determined under the default rule i.e.,
sub-section (2) of section 13 of the IGST Act, 2017.
10. Law Committee in its meeting held on 31.01.2024 deliberated on the same, and recommended
issuance of a circular on the above lines. The draft circular as recommended by the Law Committee
is enclosed with this agenda as Annexure-A.
11. Accordingly, the agenda is placed before the GST Council for approval.
******************


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ANNEXURE A
Circular No_XXX/GST


F. No. CBIC-20006/03/2024-GST
Government of India
Ministry of Finance
Department of Revenue
CBIC, GST Policy Wing


North Block, New Delhi
DateXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/ Sir,
Subject: Clarification on place of supply applicable for custodial services provided by banks-
reg
Representations have been received seeking clarification on the Place of Supply in cases of
Custodial Services provided by Banks to Foreign Portfolio Investors (hereinafter referred to as
“FPIs”) as a view is being taken by some field formations that the Place of Supply in case of
‘custodial service’ would be determined as per Section 13(8)(a) of the Integrated Goods and Services
Tax Act, 2017 (hereinafter referred to as “IGST Act”), i.e. the location of the service provider (banks
or financial institutions).
2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions
of law across the field formations, the Board, in exercise of its powers conferred by section 168(1) of
the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby
clarifies the issue as under:
Issue Clarification
Whether the activity of
providing Custodial
Services by banks or
financial institutions to
FPIs will be treated as
services provided to
'account holder' under
According to the Securities and Exchange Board of India (Custodian of
Securities) Regulations 1996, ‘Custodial Services’ in relation to
securities means safekeeping of securities of a client and providing
services incidental thereto, and includes-
• maintaining accounts of securities of a client;
• collecting the benefits or rights accruing to the client in respect
of securities;
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Section 13(8)(a) of the
IGST Act, 2017?
Further, how the place of
supply of the said services
shall be determined?

• keeping the client informed of the actions taken or to be taken
by the issuer of securities, having a bearing on the benefits or
rights accruing to the client; and
• maintaining and reconciling records of the services referred
above.
As per Regulation 20(1) of the Securities and Exchange Board of India
(Foreign Portfolio Investors) Regulations, 2019, an FPI is allowed to
invest only in the following securities, namely-
(a) shares, debentures and warrants issued by a body corporate; listed or
to be listed on a recognized stock exchange in India;
(b) units of schemes launched by mutual funds under Chapter V, VI-A
and VI-B of the Securities and Exchange Board of India (Mutual
Fund) Regulations, 1996;
(c) units of schemes floated by a Collective Investment Scheme in
accordance with the Securities and Exchange Board of India
(Collective Investment Schemes) Regulations, 1999;
(d) derivatives traded on a recognized stock exchange;
(e) units of real estate investment trusts, infrastructure investment trusts
and units of Category III Alternative Investment Funds registered
with the Board;
(f) Indian Depository Receipts;
(g) any debt securities or other instruments as permitted by the Reserve
Bank of India for foreign portfolio investors to invest in from time to
time; and
(h) such other instruments as specified by the Board from time to time.
Various banks enter into custodian agreements with the Foreign
Portfolio Investors (FPIs) for the provision of such custodial services.
The main activity carried out by banks as a custodian in relation to
custodial services is maintaining account of the securities held by the
FPIs.
As per clause (a) of sub-section (8) of section 13 of IGST Act, Place of
Supply of services supplied by banking company or a financial
institution or a non-banking company to account holders shall be the
location of the supplier of services.
As per Explanation (a) of Section 13(8) of IGST Act, ‘account’
means an account bearing interest to the depositor, and includes a
non-resident external account and a non-resident ordinary account.
It is mentioned that the provisions similar to above provisions under
IGST Act existed during the Service Tax regime. The place of
provision of service under Service Tax was governed by the Service
Tax Place of Provision of Supply Rules, 2012. Provisions of Rule 9(a)
of the Service Tax Place of Provision of Supply Rules, 2012 were
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identical to that of section 13(8)(a) of the IGST Act. The Education
Guide under the Service Tax Law clarified the scope of the term
“account holder” and the services provided by banks to account holders
as well as the services which are not provided to account holders.
Question: 5.9.2 What is the meaning of "account holder"?
Which accounts are not covered by this rule?
Answer: "Account" has been defined in the rules to mean an
account which bears an interest to the depositor. Services
provided to holders of demand deposits, term deposits, NRE
(non-resident external) accounts and NRO (non-resident
ordinary) accounts will be covered under this rule.
Question:5.9.3 What are the services that are provided by a
banking company to an account holder (holder of an account
bearing interest to the depositor)?
Answer: Following are examples of services that are provided
by a banking company or financial institution to an “account
holder”, in the ordinary course of business:-
iii) services linked to or requiring opening and operation
of bank accounts such as lending, deposits, safe
deposit locker etc;
iv) transfer of money including telegraphic transfer, mail
transfer, electronic transfer etc.
Question:5.9.4 What are the services that are not provided by
a banking company or financial institution to an account
holder, in the ordinary course of business, and will
consequently be covered under another Rule?
Answer: Following are examples of services that are
generally NOT provided by a banking company or financial
institution to an account holder (holder of a deposit account
bearing interest), in the ordinary course of business:-
i) financial leasing services including equipment leasing
and hire purchase;
ii) merchant banking services;
iii) Securities and foreign exchange (forex) broking, and
purchase or sale of foreign currency, including money
changing;
iv) asset management including portfolio management, all
forms of fund management, pension fund management,
custodial, depository and trust services
In the case of any service which does not qualify as a
service provided to an account holder, the place of
provision will be determined under the default rule i.e.
the Main Rule 3. Thus, it will be the location of the
service receiver where it is known (ascertainable in the
ordinary course of business), and the location of the
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service provider otherwise.”
Accordingly, as per clarification given in Education Guide under
Service Tax Regime, the custodial services are not considered to be
covered under the services provided by bank to account holders, but
have been considered to be covered under the services which are not
provided to account holder.
As the provisions of section 13(8)(a) of the IGST Act are similar to
the provisions of Rule 9(a) of the Service Tax Place of Provision of
Supply Rules, 2012, the clarification given in the Education Guide
under Service Tax Regime is equally applicable under GST Regime.
Accordingly, it is clarified that the custodial services provided by
banks or financial institutions to FPIs are not be treated as services
provided to 'account holder' and therefore, the said services are not
covered under Section 13(8)(a) of the IGST Act. Therefore, the place
of supply of such services is not to be determined under Section
13(8)(a) of the IGST Act but has to be determined under the default
rule i.e., sub-section (2) of section 13 of the IGST Act.

2. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
3. Difficulty, if any, in implementation of the above instructions may please be brought to the
notice of the Board. Hindi version would follow.
(Sanjay Mangal)
Principal Commissioner (GST)




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Agenda Item 3(xxix): Clarification on time of supply in respect of supply of services of
construction of road and maintenance thereof of National Highway Projects of National
Highways Authority of India (NHAI) in Hybrid Annuity Mode (HAM) model.

Reference has been received from Secretary, Ministry of Road Transport & Highways to
clarify the time of supply in respect of supply of services of construction of road and maintenance
thereof of National Highway Projects in Hybrid Annuity Mode (HAM) model, where certain portion
of Bid Project Cost is received during construction period and remaining payment is received through
deferred payment (annuity) spread over years.

2. MAIN ISSUE:

2.1 Hybrid Annuity Model (HAM), has been introduced by the Government of India for
expediting highway projects and for ensuring increased participation by the private players in
construction of such projects. The HAM model takes a more balanced financing risk-sharing approach
with the private sector, emphasizes high project readiness, provides early completion incentives, and
responds to several other issues facing the construction industry. HAM has been successful in
enhancing the bankability of road sector projects and attracting private sector interest in these
projects. Under this model, the government is required to finance only 40% of the construction cost
during the construction phase, whereas the remaining 60% is arranged by the private
player/concessionaire. The remaining 60% amount is paid by the government to the concessionaire in
form of annuity/instalments along with interest over a period specified in the contract.

2.2 Under HAM model, the concessionaires are awarded projects by National Highway Authority
of India (NHAI) for Highway Development under Concession Agreement. The relevant extract of the
model Concession agreement mentions as follows:-
“(A) [The Government of India had entrusted to the Authority] the development,
maintenance and management of National Highway No. **including the section from km
**** to km **** (approx. **** km). The Authority had resolved to augment the existing road
from km ** to km ** (approximately*** km) on the *** section of National Highway No. **
(hereinafter called the "NH **") in the State of by [Four-Laning thereof] (the "Project") on
design, build, operate and transfer (the "DBOT Annuity" or "Hybrid Annuity") basis,
which shall be partly financed by the Concessionaire who shall recover its investment and
costs through payments to be made by the Authority, in accordance with the terms and
conditions to be set forth in a concession agreement to be entered into.

(B) The Authority had adopted a single stage two envelope bidding process and accordingly
invited proposals by its Request for Proposals dated*** (the "Request for Proposals" or
"RFP") for qualification and short listing of bidders for construction, operation and
maintenance of the above referred Project on Hybrid Annuity basis.”
2.3 Article 2 of the model concession agreement provides for scope of the project as follows:
“2.1 Scope of the Project
The Scope of the Project shall mean and include, during the Concession Period:
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(a) construction of the Project on the Site set forth in Schedule-A and as specified in
Schedule-B together with provision of Project Facilities as specified in Schedule- (,
and in conformity with the Specifications and Standards set forth in Schedule
(b) operation and maintenance of-the Project in accordance with the provisions of this
Agreement; and
(c) performance and fulfillment of all other obligations of the Concessionaire in
accordance with the provisions of this Agreement and matters incidental thereto or
necessary for the performance of any or all of the obligations of the Concessionaire
under this Agreement”.
2.4 Article 15 of the model concession agreement provides for commercial operation date as
follows:
“15.1 Commercial Operation Date (COD)

15.1.1 The Project shall be deemed to be complete when the Completion Certificate or
the Provisional Certificate, as the case may be, is issued under the provisions of Article
14, and accordingly the commercial operation date of the Project shall be the date on
which such Completion Certificate or the Provisional Certificate is issued (the "COD").
The Project shall enter into commercial service on COD whereupon the Concessionaire
shall be entitled to demand and collect Annuity Payments in accordance with the
provisions of this Agreement.”

2.5 The Ministry of Road Transport & Highways has submitted that:
a. The HAM contract is for supply of construction service and O & M service by the
companies or concessionaire generally spread over a certain period of years, with
periodic payment during this period;
b. The concession agreement for HAM model is a single wholesome contract including
construction, operation and maintenance of the said highway project spread over the
specified number of years;
c. The bids are evaluated on the basis of the total price quoted by the concessionaire i.e.
for entire responsibility under the contract to construct the road including its
maintenance and financing and that the contract remains single and indivisible;
d. The concessionaire is duty bound to complete the entire contract. It has no choice
that it may perform the first phase of construction and not to perform for the second
phase of O&M. The concessionaire gets no right whatsoever to get payment of
money prior to the respective milestone becoming due;
e. The concessionaire is entitled to raise invoice only of the amount which has become
due as per the payment milestone mentioned in the agreement. Any invoice
mentioning any amount in excess of the payment milestone due to the concessionaire
would not be valid for payment under the HAM agreement.

2.6 Article 23 of the model concession agreement provides for payment of bid project cost as
follows:
“ 23.1 Bid Project Cost: The Parties expressly agree that the cost of construction of the
Project, as on the Bid Date, which is due and payable by the Authority to the Concessionaire,
shall be deemed to be Rs (Rupees ) (The " Bid Project Cost "Jf. The Parties further agree that
the Bid Project Cost specified hereinabove for payment to the Concessionaire shall be
inclusive of the cost of construction, interest during construction, working capital, physical
contingencies and all other costs, expenses and charges for and in respect of construction of
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the Project, save and except any additional costs arising on account of variation in Price
Index, Change of Scope, Change in Law, Force Majeure or breach of this Agreement, which
costs shall be due and payable to the Concessionaire in accordance with the provisions of the
Agreement. For the avoidance of doubt, the Bid Project Cost specified herein represents the
amount due and payable by the Authority to the Concessionaire and may be less than, equal
to, or more than the Estimated Project Cost.”

2.7 Article 23.7 of the model concession agreement provides for O&M payments as follows:
“The Parties acknowledge and agree that all O&M Expenses shall be borne by the
Concessionaire and in lieu thereof; a lump sum financial support in the form of biannual
payments shall be due and payable by the Authority, which shall be computed on Rs (Rupees )
(the "First Year O&M cost")", in accordance with the provisions of this Clause 23.7 (the
"O&M Payments"). The Parties further acknowledge and agree that any O&M Expenses in
excess of the O&M Payments shall be borne solely by the Concessionaire, save and except as
expressly provided in this Agreement. For avoidance of doubt it is clarified that the O&M
Payments will be subject to any Change in Scope of the Project of the Concessionaire under
Article 16 of this Agreement.”

2.8 Based on above, the consideration for above activities is to be paid to the concessionaire/
companies by NHAI in following manner:
Activity Consideration (when and how much)
1. New Construction of the road
which is inclusive of the cost
of construction, interest during
construction, working capital,
physical contingencies and all
other costs, expenses and
charges for and in respect of
construction of the Project.
1. 40% of contract price (known as Bid Project Cost i.e.
BPC) is to be paid during the construction period
(generally 2 years) when 100% construction completed
on milestone completion basis.
2. 60% of BPC is to be paid in form of Annuity in 30 bi-
annual instalments in such percentage as agreed in the
contract agreement with NHAI over the period of 15
years which starts from the 180 days from the date of
completion of new construction work (COD date).
2. Operation and maintenance
costs
Maintenance Amount as decided in the agreement
executed with NHAI and starts from the date of completion
of new construction of road i.e. from COD date.


2.9 It has further been represented by the Ministry of Road Transport & Highways that the said
supply of services under HAM contract are covered under the ‘Continuous supply of services’ as
defined under section 2(33) of the CGST Act, 2017. It has also been submitted that the liability to raise
invoice in respect of the said services shall arise as per clause (a) of Section 31(5) of CGST Act, 2017
on or before the due date of payment as mentioned in the contract agreement, and the time of supply
shall be the date of issue of Invoice, or date of receipt of payment, whichever is earlier, as per Section
13(2) of CGST Act, 2017. They have, therefore, contended that the liability to pay GST in respect of
the said services will arise at the time of issuance of invoice, or on receipt of payment, whichever is
earlier, as per the terms of the contract.

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3. VIEW POINT OF FIELD FORMATIONS/ INVESTIGATIVE AGENCIES
3.1 Some of the field formations and investigative agencies are taking a view that in respect of
construction service, GST is payable upfront when the construction of road is completed and can’t be
linked to the due date of payment. They are contending that on conclusion of construction work,
supply of construction services is completed and accordingly, whole remaining tax liability on the
supply of construction services needs to be discharged on completion of the said construction work.
4. GST provisions applicable:

4.1 ‘Continuous supply of services’ is defined under section 2(33) of the CGST Act, 2017 which
is reproduced below:
2. Definitions.— In this Act, unless the context otherwise requires,––
……
……
(33) ―continuous supply of services means a supply of services which is provided, or agreed
to be provided, continuously or on recurrent basis, under a contract, for a period exceeding
three months with periodic payment obligations and includes supply of such services as the
Government may, subject to such conditions, as it may, by notification, specify;

4.2 Section 13 of the CGST Act, 2017 provides for time of supply for payment of the tax liability
on supply of services. Sub-section (2) of section 13 provides for time of supply of services by the
supplier. Section 13 of the CGST Act, 2017 is reproduced below:

13. Time of Supply of Services.—

(1) The liability to pay tax on services shall arise at the time of supply, as determined in
accordance with the provisions of this section.

(2) The time of supply of services shall be the earliest of the following dates, namely:—

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period
prescribed under section 31 or the date of receipt of payment, whichever is earlier; or
(b) the date of provision of service, if the invoice is not issued within the period prescribed
under section 31 or the date of receipt of payment, whichever is earlier; or

(c) the date on which the recipient shows the receipt of services in his books of account, in a
case where the provisions of clause (a) or clause (b) do not apply:
…………..
Explanation.––For the purposes of clauses (a) and (b)––

(i) the supply shall be deemed to have been made to the extent it is covered by the
invoice or, as the case may be, the payment;
(ii) the date of receipt of payment shall be the date on which the payment is entered in the
books of account of the supplier or the date on which the payment is credited to his bank
account, whichever is earlier.
Agenda for 53rd GSTCM Volume 1
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4.3 In cases of continuous supply of services, where the payment is made periodically, either due
on a specified date or is linked to the completion of an event, the invoice is required to be issued on or
before the specified date or the date of completion of that event as laid down in section 31(5) of
CGST Act, 2017. Section 31(5) of the CGST Act, 2017 reads as under:
31. Tax invoice.—
(1)….

(5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of
services,––

(a) where the due date of payment is ascertainable from the contract, the invoice shall be
issued on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, the invoice shall be
issued before or at the time when the supplier of service receives the payment;

(c) where the payment is linked to the completion of an event, the invoice shall be
issued on or before the date of completion of that event.

5. Examination:
5.1 Under the Hybrid Annuity Model (HAM) of concession agreements, the highway
development projects are under Design, Build, Operate and Transfer model (DBOT), wherein the
concessionaire is required to undertake new construction of Highway, as well as the Operation and
Maintenance (O & M) of Highways. As emphasised by the Ministry of Road Transport & Highways,
the contract awarded to the concessionaire is a comprehensive single contract for construction of the
road as well as the operation and maintenance of the same. As per the terms of payment, in respect of
construction of the road, as mentioned in Para 2.8 above, 40% of contract price (known as Bid
Project Cost i.e. BPC) is to be paid during the construction period (generally 2 years) i.e. when 100%
construction is completed on milestone completion basis, whereas 60% of BPC is to be paid in the
form of Annuity in instalments in such percentage as mentioned in the contract over the period of
certain years which starts from 180 days from the date of completion of new construction work (COD
date). Besides, in respect of O & M portion, the maintenance amount, as per the terms of the
agreement, is also to be paid starting from the date of completion of new construction of road i.e. from
COD date.

5.2 In a HAM contract, as can be observed from para 2.5 above, the essence of the contract is that
a concessionaire shall construct and look after the operation and maintenance for a stipulated time.
Although the contract is a single contract for construction as well as operation and maintenance of the
highway, the payment terms are so staggered that the concessionaire is held accountable for the repair
and maintenance of the highway as well. The contract needs to be looked holistically based on the
services to be performed by the concessionaire and cannot be artificially split into two separate
contracts for construction and operation and maintenance, based on the payment terms. In this case,
the concessionaire is bound contractually to complete not only the construction of the highway but
also to operate and maintain the same. The concessionaire cannot simply walk out from the contract
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after completing the work of construction and asking for payment of the full amount payable for the
construction portion as per the contract as the same would involve breach of the contract. Thus, the
view that the contract is divisible and construction portion is separate from the O & M portion appears
to be incorrect. Therefore, this HAM contract to construct Highways and to operate and maintain the
same for the specified period under the contract is a single contract and has to be treated in this
manner for applying the provisions of GST.
5.3. In HAM contract, the payment is made spread over the contract period in installments and
payment for each installment is to be made after specified periods, or on completion of an event, as
specified in the contract. The same appears to be covered under the ‘Continuous supply of services’ as
defined under section 2(33) of the CGST Act, 2017.
5.4 As per clause (a) of Section 13(2) of CGST Act, 2017, the time of supply in respect of a
supply of services shall be the date of issue of Invoice, or date of receipt of payment, whichever is
earlier, in cases where invoice is issued within the period prescribed under section 31 of CGST Act.
Further, as per clause (b) of Section 13(2) of CGST Act, in cases where invoice is not issued within
the period prescribed under section 31, the time of supply of service shall be date of provision of the
service or date of receipt of payment, whichever is earlier. However, as per section 31(5) of CGST
Act, in cases of continuous supply of services, where the payment is made periodically, either due on
a specified date or is linked to the completion of an event, the invoice is required to be issued on or
before the specified date or the date of completion of that event.
5.5 Accordingly, as per section 13(2) of CGST Act, read with section 31(5) of CGST Act, time of
supply of services under HAM contract, including construction and O&M portion, should be the date
of issuance of such invoice, or date of receipt of payment, whichever is earlier, if the invoice is issued
on or before the specified date or the date of completion of the event specified in the contract, as
applicable. However, in cases, where the invoice is not issued on or before the specified date or the
date of completion of the event specified in the contract, as per clause (b) of section 13(2), time of
supply should be the date of provision of the service, or date of receipt of payment, whichever is
earlier. In case of continuous supply of services, the date of provision of service should be deemed as
the due date of payment as per the contract, as the invoice is required to be issued on or before the due
date of payment, as per the provisions of Section 31(5) of CGST Act.
5.6 The tax liability on the construction portion under the HAM contract would, therefore, arise at
the time of issuance of invoice, or receipt of payments, whichever is earlier, if the invoice is issued on
or before the specified date or the date of completion of the event specified in the contract, as
applicable. If invoices are not issued on or before the specified date or the date of completion of the
event specified in the contract, tax liability would arise on the date of provision of the said service
(i.e., due date of payment as per the contract), or the date of receipt of the payment, whichever is
earlier.
5.7 Further, as per the terms of HAM contracts, the installments/annuity payable by NHAI to the
concessionaire also includes some interest component. As per section 15(2)(d) of the CGST Act, 2017
the value of supply shall include any interest or late fee or penalty for delayed payment of any
consideration for any supply. Therefore, the amount of such interest payable as a part of the
annuity/installments is also includable in the taxable value for the purpose of payment of tax on the
said annuity/installment.
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6. Law Committee in its meeting dated 09.02.2024 deliberated on the issue and recommended
clarifying the same on the above lines by issuing a Circular. Draft circular, as recommended by the
Law Committee, is enclosed with this agenda note as Annexure-A.
7. The issue is put up before GST Council for deliberation and approval.
******









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ANNEXURE-A
Circular No. XX/XX/2024-GST

F. No. CBIC-20001/2/2022 - GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification on time of supply in respect of supply of services of construction of road
and maintenance thereof of National Highway Projects of National Highways Authority of India
(NHAI) in Hybrid Annuity Mode (HAM) model -reg.

Representations have been received from the trade and the field formations seeking
clarification regarding the time of supply in respect of supply of services of construction of road
and maintenance thereof of National Highway Projects in Hybrid Annuity Mode (HAM) model,
where certain portion of Bid Project Cost is received during construction period and remaining
payment is received through deferred payment (annuity) spread over years.
5. In order to clarify the issue and to ensure uniformity in the implementation of the
provisions of law across the field formations, the Board, in exercise of its powers conferred by
section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST
Act”), hereby clarifies the issues as under:
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S. No. Issue Clarification
Time of supply in respect of supply of services of construction of road and
maintenance thereof of National Highway Projects of National Highways
Authority of India (NHAI) in Hybrid Annuity Mode (HAM) model
1. Under HAM model of National
Highways Authority of India
(NHAI), the concessionaire has to
construct the new road and provide
Operation & Maintenance of the
same which is generally over a
period of 15-17 years and the
payment of the same is spread over
the years. What is the time of
supply for the purpose of payment
of tax on the said service under the
HAM model?
Under the Hybrid Annuity Model (HAM) of concession
agreements, the highway development projects are
under Design, Build, Operate and Transfer model
(DBOT), wherein the concessionaire is required to
undertake new construction of Highway, as well as the
Operation and Maintenance (O&M) of Highways. The
payment terms for the construction portion as well as
the O&M portion of the contract are provided in the
agreement between National Highways Authority of
India (NHAI) and the concessionaire.

2.1 An HAM contract is a single contract for
construction as well as operation and maintenance of
the highway. The payment terms are so staggered that
the concessionaire is held accountable for the repair and
maintenance of the highway as well. The contract needs
to be looked holistically based on the services to be
performed by the concessionaire and cannot be
artificially split into two separate contracts for
construction and operation and maintenance, based on
the payment terms. The concessionaire is bound
contractually to complete not only the construction of
the highway but also to operate and maintain the same.
2.2 In HAM contract, the payment is made spread
over the contract period in installments and payment for
each installment is to be made after specified periods,
or on completion of an event, as specified in the
contract. The same appears to be covered under the
‘Continuous supply of services’ as defined under
section 2(33) of the CGST Act.
2.3 As per clause (a) of Section 13(2) of CGST Act,
the time of supply in respect of a supply of services
shall be the date of issue of Invoice, or date of receipt
of payment, whichever is earlier, in cases where
invoice is issued within the period prescribed under
section 31 of CGST Act. Further, as per clause (b) of
Section 13(2) of CGST Act, in cases where invoice is
not issued within the period prescribed under section
31, the time of supply of service shall be date of
provision of the service or date of receipt of
payment, whichever is earlier. However, as per
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section 31(5) of CGST Act, in cases of continuous
supply of services, where the payment is made
periodically, either due on a specified date or is linked
to the completion of an event, the invoice is required to
be issued on or before the specified date or the date of
completion of that event.
2.4 Accordingly, as per section 13(2) of CGST Act,
read with section 31(5) of CGST Act, time of supply of
services under HAM contract, including construction and
O&M portion, should be the date of issuance of such
invoice, or date of receipt of payment, whichever is
earlier, if the invoice is issued on or before the specified
date or the date of completion of the event specified in the
contract, as applicable. However, in cases, where the
invoice is not issued on or before the specified date or the
date of completion of the event specified in the contract,
as per clause (b) of section 13(2), time of supply should
be the date of provision of the service, or date of receipt
of payment, whichever is earlier. In case of continuous
supply of services, the date of provision of service may be
deemed as the due date of payment as per the contract, as
the invoice is required to be issued on or before the due
date of payment as per the provisions of Section 31(5) of
CGST Act.

3. In the light of above, it is clarified that the tax liability
on the concessionaire under the HAM contract, including
on the construction portion, would arise at the time of
issuance of invoice, or receipt of payments, whichever is
earlier, if the invoice is issued on or before the specified
date or the date of completion of the event specified in the
contract, as applicable. If invoices are not issued on or
before the specified date or the date of completion of the
event specified in the contract, tax liability would arise on
the date of provision of the said service (i.e., the due date
of payment as per the contract), or the date of receipt of
the payment, whichever is earlier.
4. It is also clarified that as the installments/ annuity
payable by NHAI to the concessionaire also includes
some interest component, the amount of such interest
shall also be includable in the taxable value for the
purpose of payment of tax on the said annuity/installment
in view of the provisions of section 15(2)(d) of the CGST
Act.
Agenda for 53rd GSTCM Volume 1
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6. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
7. Difficulty, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)
Agenda for 53rd GSTCM Volume 1
Page 431 of 477

Agenda Item 3(xxx): Refund of additional Integrated Tax (IGST) paid on account of upward
revision in price of the goods subsequent to export of such goods.

Representations have been received from the trade/ industry requesting for prescribing a
mechanism for seeking refund of additional Integrated Goods & Services Tax (hereafter referred to as
IGST) paid on account of upward revision in price of the goods subsequent to exports, especially in
cases where the prices of the export commodities are linked to some international index or as per the
terms of contract between the two parties or due to any other reason, which may result in revision in
the price of the goods subsequent to exports. In such cases, the export is made at a mutually decided
price but the prices are finalised post export to accommodate for variation in prices as per the terms of
contract which may result in either upward price revision or downward price revision of goods
exported. In cases where there is upward price revision, the exporter is required to pay additional
IGST on account of upward price revision along with applicable interest but there exists no
mechanism for allowing them to claim refund of such additional IGST paid.

2. Reference is made to section 16 of the Integrated Good & Services Tax Act, 2017 (hereafter
referred to as IGST Act) which provides for zero rated supplies. Export of goods or services has been
classified as per clause (a) of sub-section (1) of section 16 of the IGST Act. Sub-section (4) of section
16 provides inter alia that Government may notify (i) a class of persons who may make zero rated
supply on payment of IGST and claim refund of the tax so paid; (ii) a class of goods or services which
may be exported on payment of integrated tax and the supplier of such goods or services may claim
the refund of tax so paid. Further, vide Notification 1/2023-IT dated 31.07.2023 and Notification
5/2023-IT dated 26.10.2023, all goods or services (except the goods specified in column (3) of the
TABLE mentioned in the Notification 1/2023-IT dated 31.07.2023) have been notified as the class of
goods or services which may be exported on payment of integrated tax and on which the supplier
of such goods or services may claim the refund of tax so paid and all suppliers to a Developer or a
unit in Special Economic Zone undertaking authorised operations have been notified as the class of
persons who may make supply of goods or services (except the goods specified in column (3) of the
TABLE mentioned in the Notification 1/2023-IT dated 31.07.2023) to such Developer or a unit in
Special Economic Zone for authorised operations on payment of integrated tax and on which the said
suppliers may claim the refund of tax so paid.

3. In cases of exports on payment of integrated tax, where there is upward revision in price of
the goods subsequent to exports, the exporter is required to issue a debit note/ supplementary invoice
in terms of sub-section (3) of section 34 of the Central Goods & Services Tax Act, 2017 (hereafter
referred to as CGST Act, 2017). Further, in terms of provisions of sub-section (4) of section 34 of the
CGST Act, such debit note/ supplementary invoice has to be declared in the return of the month
during which such debit note/ supplementary invoice has been issued and tax liability thereon has to
be discharged along with the applicable interest.

3.1 In view of the above, in cases of exports made on payment of integrated tax, the exporter or
the supplier of the goods is required to pay additional IGST on account of upward revision in prices
by raising a debit note/ supplementary invoice for such export, along with applicable interest. In case
of domestic supply, it has been prescribed that the supplier can declare the debit note in his FORM
GSTR-1 and pay tax on such increased amount in FORM GSTR-3B along with interest and the
recipient can take ITC on the tax paid on the basis of such debit note. However, in case of export of
Agenda for 53rd GSTCM Volume 1
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goods made with payment of IGST, while additional IGST on account of upward revision in prices is
payable by the exporter, no mechanism is prescribed for refund of such additional IGST paid.

4. Rule 96 of the Central Goods & Services Tax Rules, 2017 (hereafter referred to as CGST
Rules) deals with refund of IGST paid on export of goods or services. As per the provision of sub-rule
(1) of rule 96, in case of export of goods, Shipping Bill filed by exporter of goods is deemed to be an
application for refund of IGST paid on such exports. Therefore, in case of refund of IGST paid on
export of goods, the IGST refund gets processed once the details of the invoice and shipping bill
declared in FORM GSTR-1 matches with those entered on the ICEGATE portal subject to payment of
IGST in FORM GSTR-3B and Export General Manifest (EGM) has been filed.

5. As the process of refund of IGST through Customs is an automated process without manual
intervention of customs officers, there is a possibility that the refund of IGST under Rule 96 might
have been processed before issuance of debit note/ supplementary invoice in case of upward revision
in price of the goods subsequent to exports. There exists no mechanism for either revision of such
refund claim on the basis of debit note/ supplementary invoice or for filing a supplementary claim for
refund of such additional IGST paid.

6. The said issue was discussed with the officers of Customs Policy Wing, GSTN and DG
(Systems) in the meeting held on 02.11.2023. In the said meeting, it was informed by Customs Policy
Wing that as per extant provisions, amendment in shipping bill cannot be done on the grounds of
revision in price of the goods subsequent to exports i.e. once let export order (LEO) has been issued
and goods have been exported out of India. They also informed that at present, there is no
functionality in customs system for re-assessment of shipping bill in such cases and since there is no
possibility of any re-assessment or amendment in shipping bill after filing of Export General Manifest
(EGM), Customs authorities will have no role in processing such refund claims, for the cases where
there is upward revision in price of the goods subsequent to exports, in form of issuance of any
document/ certificate.
7. Further, there may be situations where prices are changed due to business disputes or factors
beyond the control of the exporter. In such a situation, the benefits of zero rating provided under
Section 16 of IGST Act, 2017 may not be denied, if any additional IGST has been paid on such
revised prices, merely on the grounds that the refund of IGST paid through Customs has already been
processed automatically. Therefore, it is felt that there is a need to prescribe a mechanism for refund
of such additional IGST paid on account of upward revision in price of the goods subsequent to
exports.
8. It is therefore proposed that in such cases, GSTN may be requested to develop a separate
category of refund in FORM GST RFD-01, for filing an application of refund of such additional
IGST paid. However, till the time such separate category for claiming refund of additional amount of
IGST paid is developed on the common portal, the said exporters may be allowed to file refund claims
of such additional IGST paid on the portal as FORM GST RFD-01 refund claims under the category
“Any other” with the remarks “Refund of additional IGST paid on account of upward revision in price
of the goods subsequent to exports”. Such claims shall be then handled by the jurisdictional tax officer
of the concerned exporter. For doing the same, amendments would be required in rule 89 and rule 96
of the CGST Rules, 2017 to provide for filing of refund of additional IGST paid on account of upward
revision in price of the goods subsequent to export. The proposed draft amendment in rules are as
follows:
Agenda for 53rd GSTCM Volume 1
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I. Insertion of sub-rule (1B) and proviso to sub-rule (1B) of rule 89:
“(1B) Any person, claiming refund of additional integrated tax paid on account of
upward revision in price of the goods subsequent to exports, and on which the refund of
integrated tax paid at the time of export of such goods has already been sanctioned in
accordance with provisions of rule 96, may file an application for such refund of additional
integrated tax paid, electronically in FORM GST RFD-01 through the common portal,
subject to the provisions of rule 10B, before the expiry of two years from the relevant date
as per clause (a) of Explanation (2) of section 54 of the Act:
Provided that the said application for refund may, in cases where the relevant date as per
clause (a) of Explanation (2) of section 54 of the Act was before the date on which this sub-
rule comes into force, be filed before the expiry of two years from the date on which this
sub-rule comes into force.”

II. Insertion of following clauses below clause (ba) in sub-rule (2) of rule 89 of the CGST Rules,
2017:
“(bb) a statement containing the number and date of export invoices along with copy of such
invoices, the number and date of shipping bills or bills of export invoices along with copy of
such shipping bills or bills of export, the number and date of Bank Realisation Certificate or
foreign inward remittance certificate in respect of such shipping bills or bills of export
invoices along with copy of such Bank Realisation Certificate or foreign inward remittance
certificate issued by Authorised Dealer-I Banks, the details of refund already sanctioned
under sub-rule (3) of rule 96, the number and date of relevant supplementary invoices or
debit notes issued subsequent to the upward revision in prices invoices along with copy of
such supplementary invoices or debit notes, the details of payment of additional amount of
integrated tax, in respect of which such refund is claimed, along with proof of payment of
additional amount of integrated tax and interest paid thereon, the number and date of foreign
inward remittance certificate issued by Authorised Dealer-I Bank in respect of additional
foreign exchange remittance received in respect of upward revision in price of exports along
with copy of such foreign inward remittance certificate, along with a certificate issued by a
practising chartered accountant or a cost accountant to the effect that the said additional
foreign exchange remittance is on account of such upward revision in price of the goods
subsequent to exports and copy of contract/ other document(s), as applicable, indicating
requirement for the revision in price of exported goods which indicate the revision in price of
exported goods, in a case where the refund is on account of upward revision in price of such
goods subsequent to exports;

(bc) a reconciliation statement, reconciling the value of supplies declared in supplementary
invoices/ debit notes/ credit notes issued along with relevant details of Bank Realisation
Certificate or foreign inward remittance certificate issued by Authorised Dealer-I Bank, in a
case where the refund is on account of upward revision in price of such goods subsequent to
exports;”
III. Amendment in sub-rule (1) of rule 96:
(1) The shipping bill filed by an exporter of goods shall be deemed to be an application for
refund of integrated tax paid on the goods exported out of India and such application shall be
deemed to have been filed only when:-
(a) the person in charge of the conveyance carrying the export goods duly files a departure
manifest or an export manifest or an export report covering the number and the date of
shipping bills or bills of export; and
Agenda for 53rd GSTCM Volume 1
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(b) the applicant has furnished a valid return in FORM GSTR-3B:
Provided that if there is any mismatch between the data furnished by the exporter of
goods in Shipping Bill and those furnished in statement of outward supplies in FORM
GSTR-1, such application for refund of integrated tax paid on the goods
exported out of India shall be deemed to have been filed on such date when such
mismatch in respect of the said shipping bill is rectified by the exporter :
(c) the applicant has undergone Aadhaar authentication in the manner provided in rule 10B;
Provided that the exporter of goods may file an application electronically in FORM GST
RFD-01 through the common portal for refund of additional integrated tax paid on
account of upward revision in price of goods subsequent to export of such goods, and on
which the amount of integrated tax paid at the time of export of such goods has already
been refunded in accordance with provisions of sub-rule (3) of this rule, and such
application shall be dealt with in accordance with the provisions of rule 89;
9. Relevant date for claiming refund:
9.1 Another issue which needs to be deliberated is whether there is any time limit for applying for
refund under such cases also, i.e. whether time limit of two years prescribed under Section 54(1) of
CGST Act is applicable to such refund claims, and if so, what is the relevant date for the same. The
relevant date for refund in case of goods exported out of India, in general, is provided in clause (a) of
explanation (2) under section 54 of the CGST Act, which is reproduced as under:

“(2) "relevant date" means-
(a) in the case of goods exported out of India where a refund of tax paid is available in respect
of goods themselves or, as the case may be, the inputs or input services used in such goods,-
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which
such goods are loaded, leaves India; or
(ii) if the goods are exported by land, the date on which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office
concerned to a place outside India;”
9.2 From a plain reading of the aforementioned provision, depending upon the mode of transport,
the relevant date for claiming refund of export of goods can be decided as per the provisions of clause
(a) of Explanation (2) under section 54 of the CGST Act, 2017.

9.3 However, in many cases, where exports have taken place in past, and the time period
provided under Section 54 for filing refund application has already expired, the concerned exporters
will not be able to apply for the refund of the additional integrated tax paid on account of upward
revision in price of the goods subsequent to exports, even though they could not apply for refund of
additional IGST earlier due to unavailability of mechanism regarding the same. Such a delay in filing
of such refund claim cannot be said to be attributable to the said exporter, and therefore, depriving the
said exporter from claiming refund of such additional IGST paid, would not be justifiable.

9.4 Therefore, it is proposed that in such cases, we may allow the refund application to be filed
within two years from the date of these amended rules coming into force, on the same pattern as has
Agenda for 53rd GSTCM Volume 1
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been done through rule 89(1A) in cases of refund under Section 77 of CGST Act. Accordingly, we
may provide that where the relevant date as per clause (a) of Explanation (2) of section 54 of the
CGST Act was before the date on which the proposed sub-rule (1B) of rule 89 of CGST Rules comes
into force, the said refund application may be allowed to be filed before the expiry of two years from
the date on which the said sub-rule comes into force.
10. Also, there may be certain cases where there has been downward revision in the price of the
goods subsequent to exports. In such type of cases, the exporter would have raised the credit note and
declared the same in his returns resulting in downward revision of the tax liability of the month in
which such credit note has been declared in terms of the provisions of sub-section (1) & (2) of section
34. Therefore, in such type of cases, refund of IGST sanctioned in excess of the IGST payable as per
the revised price is in nature of erroneous refund and is liable to be recovered from the exporter.
Therefore, there is a requirement of a mechanism to ensure that proper officers processing the refund
claims of additional IGST paid in case of upward revision in price of the goods subsequent to exports,
as referred in para 8 above, may verify that the exporter has also deposited the excess refund
sanctioned, along with applicable interest, wherever there is downward revision in price of the goods
subsequent to export.
11. The following documents may be prescribed to be accompanied with the said refund claim in
order to establish that refund is due to the exporter:
a. Copy of shipping bill or bill of exports;
b. Copy of original invoices;
c. Copy of contract/ other document(s), as applicable, indicating requirement for the revision in
price of such goods subsequent to exports;
d. Copy of the relevant debit notes/ supplementary invoices;
e. Proof of payment of additional IGST and applicable interest;
f. Proof of remittance of additional foreign exchange (FIRC) issued by Authorised Dealer-I
bank;
g. A certificate of a practising chartered accountant or a cost accountant certifying therein that
the said additional foreign exchange remittance is on account of such upward revision in price
of the goods subsequent to export;
h. Statement 9A of FORM GST RFD 01 (as detailed in Annexure A enclosed); and
i. Statement 9B of FORM GST RFD 01 (as detailed in Annexure A enclosed).

12. Further, GSTN may be requested to ensure that the validated details of shipping bills, the
amount of IGST involved as well as the amount of refund sanctioned via IGST route through the
Customs system are made available to jurisdictional GST officers so as to enable them to process such
refund claims of additional IGST paid on account of upward revision in price of the goods subsequent
to exports.
13. The agenda note was placed before Law Committee for examination and deliberation. The
Law Committee deliberated on the issue in its meeting held on 10.01.2024 wherein the Law
Committee recommended to insert sub-rule (1B) in rule 89 of CGST Rules, clause (bb) and clause
(bc) in sub-rule (2) of rule 89 of CGST Rules, Statement 9A and Statement 9B in FORM GST RFD
01 and amendment in sub-rule (1) of rule 96 of CGST Rules, as proposed in the agenda note. The Law
Committee also recommended to clarify the proposed changes vide a circular. The circular
recommended by the Law Committee is placed at Annexure-B.
14. The agenda note is placed before the GST Council for deliberation and approval.
Agenda for 53rd GSTCM Volume 1
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Annexure ‘A’
I. Insertion of the following statements in FORM GST RFD-01 in the CGST Rules, 2017:
Statement 9A [rule 89(2)(bb)]
Refund Type: Additional integrated tax paid on upward revision in price of goods subsequent to export
Statement 9B [rule 89(2)(bc)]
Refund Type: Details of debit/ credit notes/ supplementary invoice issued for export of goods
S.
No.
Type of
document
(Debit
Note/
Credit
Note/
supplement
ary invoice)
Debit
Note/
Credit
Note/
supple
menta
ry
invoice
Date
of
docu
ment
Document
Declared
in GSTR-1
for the
month
Tax liability paid/
ITC claimed in
respect of document
declared in GSTR-
3B for the month
BRC/ foreign
inward
remittance
certificate
No.
Date of BRC/
foreign
inward
remittance
certificate
Whether
refund
claimed for
shipping bill
under Rule 96
(Y/N)
Details of
such
shipping
Bill No.
Date of
such
shipping
bill
Port of
export
code
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Export Invoice Shipping
Bill
Export remittance
details
Refund
details
Post export price increase
supplementary invoices/ debit note & IGST payment
details
Additional export remittance
details
No
.
D
at
e
Tota
l
valu
e of
Invoi
ce
Por
t
Co
de
N
o.
D
at
e
BRC/
FIRC
No.
Dat
e
Remit
tance
amou
nt
A
m
o
u
nt
Date
of
sanct
ion
N
o.
Dat
e
Total
value of
suppleme
ntary
invoice
Paid in
FORM
GSTR-
3B
return
period
Total
additiona
l IGST
paid
Interest
paid on
IGST
amount
BRC/
FIRC
No.
Date Additional
remittance
amount
(1) (2
)
(3) (4) (5
)
(6
)
(7) (8) (9) (1
0)
(11) (1
2)
(13
)
(14) (15) (16) (17) (18) (19) (20)

Agenda for 53rd GSTCM Volume 1
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ANNEXURE B
DRAFT CIRCULAR
F. No. CBIC-200xx/xx/20xx-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, Dated the , 2024
To,

The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Directors General / Directors General (All)

Madam/Sir,

Subject: Mechanism for refund of additional Integrated Tax (IGST) paid on account of upward
revision in price of the goods subsequent to exports– reg.
Representations have been received from trade/ industry requesting for prescribing a
mechanism for seeking refund of additional IGST paid on account of upward revision in price of
goods subsequent to export. It has been represented that there may be a need to revise the price of
export goods, subsequent to their exports, due to various reasons such as linking of the prices of the
export commodities to some international index or as per the terms of contract between the two
parties etc. In such cases, where there is upward revision in price of goods subsequent to exports, the
exporter is required to pay additional IGST on account of upward price revision along with applicable
interest but there exists no mechanism for allowing them to claim refund of such additional IGST
paid.

2. In order to ensure uniformity in the implementation of the provisions of the law across field
formations, the Board, in exercise of its powers conferred by section 168(1) of the Central Goods and
Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby lays down the following
procedure for claim and processing of refunds of additional integrated tax paid on account of upward
revision in prices of goods subsequent to their exports:
3. Filing of refund claim for additional IGST paid on account of upward price revision of
export of goods subsequent to export:

3.1 The refund of IGST paid on account of export of goods is processed by the proper officer of
Customs in an automated manner without manual intervention in terms of provision of rule 96 of
Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”). However,
there exists no mechanism for processing of refunds of any additional integrated tax paid on account
of upward revision in price of goods subsequent to exports by the proper officer of customs.
Therefore, it has been decided that such exporter may file an application for refund of such additional
IGST paid in FORM GST RFD-01 electronically on the common portal and such application for
refunds would be processed by the jurisdictional GST officer of the concerned exporter. Accordingly,
Agenda for 53rd GSTCM Volume 1
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CGST Rules have been amended vide Notification No. XX/2022-CT dated XX.XX.2023 to provide
for filing of such refund application in FORM GST RFD-01, which shall be dealt with in accordance
with provisions of rule 89 of CGST Rules.

3.2 GSTN is in the process of development of a separate category of refund in FORM GST
RFD-01, for filing an application of refund of such additional IGST paid. However, till the time such
separate category for claiming refund of additional amount of IGST paid is developed on the common
portal, such exporter(s) may claim refund of the additional IGST paid on account of upward revision
in price of goods subsequent to exports, by filing an application of refund in FORM GST RFD-01
under the category “Any other” with remarks “Refund of additional IGST paid on account of increase
in price subsequent to export of goods” along with the relevant documents as prescribed in clause (bb)
of sub-rule (2) of rule 89 of the CGST Rules. The exporter shall also upload the statements 9A & 9B
as prescribed in clause (bb) & clause (bc) of sub-rule (2) of rule 89 of the CGST Rules along with the
said refund claim. The exporter may also upload any other document to establish that the refund is
admissible to him.

3.3 The said refund application shall be processed based on the documentary proof submitted by
the refund applicant. Further, the validated details of shipping bills, amount of IGST involved in such
shipping bills, as well as the amount of IGST refund sanctioned by the customs under rule 96(3) of
CGST Rules will also be made available to jurisdictional GST officers by GSTN to enable them to
process such refund claims of additional IGST paid.
4. Minimum Refund Amount: Sub-section (14) of section 54 of the CGST Act provides that
no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if amount is less than
one thousand rupees. Therefore, no such refund shall be paid if the amount claimed is less than one
thousand rupees.

5. Time limit for filing refund: Sub-rule (1B) of rule 89 of CGST Rules, 2017 provides that
the application for refund of additional IGST paid can be filed before the expiry of two years from the
relevant date as per clause (a) of Explanation (2) of section 54 of the CGST Act. However, in cases,
where the relevant date as per clause (a) of Explanation (2) of section 54 of the CGST Act was before
the date on which sub-rule (1B) of rule 89 of CGST Rules, 2017 has come into force, such refund
application can be filed before the expiry of a period of two years from the date on which the said
sub-rule has come into force.

6. The following documents are required to be accompanied with the refund claim in order to
establish that refund is due to such exporter:
(a) Copy of shipping bill or bill of exports;
(b) Copy of original invoices;
(c) Copy of contract/ other document(s), as applicable, indicating requirement for the
revision in price of such goods subsequent to exports;
(d) Copy of the original invoices as well as relevant debit notes/ supplementary invoices;
(e) Proof of payment of additional IGST and applicable interest and details of the relevant
FORM GSTR-1/ FORM GSTR-3B furnished by the applicant in which the said debit
note(s) were declared and paid by the applicant;
(f) Proof of receipt of remittance of additional foreign exchange issued (FIRC) by
Authorised Dealer-I banks;
Agenda for 53rd GSTCM Volume 1
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(g) A certificate of a practising chartered accountant or a cost accountant certifying therein
that the said additional foreign exchange remittance is on account of such upward
revision in price of the goods subsequent to export;
(h) Statement 9A of FORM GST RFD 01; and
(i) Statement 9B of FORM GST RFD 01.

7. The proper officer while processing such refund claim shall verify that the exporter has duly
reported the details of the export invoice and the debit note in his statement of outward supplies in
FORM GSTR-1 and has duly paid such additional amount of IGST along with applicable interest for
which refund is being sought in their FORM GSTR-3B return. The proper officer while ascertaining
the eligibility of the refund to the exporter shall verify the revised value declared by the exporter in
his FORM GSTR-1/ FORM GSTR-3B and details of foreign exchange remittances received thereof.

8. The proper officer shall scrutinize the application with respect to its completeness and
eligibility and only if the proper officer is satisfied that the whole or any part of the amount claimed is
payable as refund, he shall proceed to issue the refund sanction order in FORM GST RFD-06 and the
payment order in FORM GST RFD-05. The proper officer shall also upload a detailed speaking
order along with the refund sanction order in FORM GST RFD-06 in terms of Instruction No.
03/2022-GST dated 14.06.2022.

9. Further, there may be certain cases where there is downward revision in price of goods
subsequent to exports, when the export has been made with payment of IGST. In all such cases, the
supplier of goods/exporter is required to deposit the refund of the IGST received in proportion to the
reduction in price of exported goods, along with applicable interest. The proper officer while granting
the refund as per para 8 above, shall also verify whether the exporter has deposited the excess refund
amount in the cases where there is a downward revision in price of goods subsequent to exports,
during the relevant tax period, if any.

10. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the
Board. Hindi version will follow.
(Sanjay Mangal)
Principal Commissioner (GST)

Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxxi): Implementation of functionality for online filing of refund application by
Canteen Stores Department (CSD) in GST-RFD 10A.

As per notifications No. 6/2017-Central Tax (Rate), No. 6/2017-Integrated Tax (Rate) and
No. 6/2017-Union territory Tax (Rate), all dated 28th June 2017, the Central Government has specified
that the Canteen Stores Department (“CSD” for short), under the Ministry of Defence, as a person
who shall be entitled to claim a refund of fifty per cent. of the applicable central tax, integrated tax
and Union territory tax paid by the CSD on all inward supplies of goods received by the CSD for the
purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the
authorized customers of the CSD. Identical notifications have been issued by the State Governments
allowing refund of fifty per cent of the State tax paid by the CSD on the inward supply of goods
received by it and supplied subsequently. Consequent to the same, Circular No. 60/34/2018-GST
dated 4th September 2018 was issued which outlined the steps to be followed for manual processing of
refund applications in FORM GST RFD 10A filed by CSDs till the functionality to file online claim is
available in the refund claim.
2. In this regard, GSTN was requested to develop functionality for online filing of refund
application on the common portal by Canteen Stores Department (CSD) in FORM GST RFD 10A.
Now, GSTN have informed that such functionality for electronic filing and processing of refund
application by CSD has been developed and is available for deployment.
3. Accordingly, the matter was deliberated by the Law Committee in its meeting held on
10.01.2024 and 24.01.2024 for requisite amendments in CGST Rules, 2017 for enabling the same.
The Law Committee recommended to insert rule 95B in CGST Rules, 2017 and FORM GST RFD
10A as follows:
(i) “95B. Refund of tax paid on inward supplies of goods received by Canteen Stores
Department (CSD):
(1) Notwithstanding anything contained in rule 95, a Canteen Stores Department under the
Ministry of Defence, which is eligible to claim the refund of fifty per cent of the applicable
central tax paid by it on all inward supplies of goods received by it for the purposes of
subsequent supply of such goods to the Unit Run Canteens of the Canteen Stores
Department or to the authorized customers of the Canteen Stores Department as per
notification issued under section 55, shall apply for refund in FORM GST RFD-10A once
in every quarter, electronically on the common portal.
(2) Such application for refund of tax paid on inward supplies of goods filed in FORM GST
RFD-10A shall be dealt in a manner similar to that for application for refund filed in FORM
GST RFD-01 in accordance with the provisions of rule 89.
(3) The refund of tax paid by the applicant shall be available if-
(a) the inward supplies of goods were received from a registered person against a tax invoice
and details of such supplies have been furnished by the said registered person in his details of
outward supply in FORM GSTR-1 and the said supplier has furnished his return in FORM
GSTR-3B for the concerned tax period;
(b) name and Goods and Services Tax Identification Number of the applicant is mentioned in
the tax invoice; and
Agenda for 53rd GSTCM Volume 1
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(c) goods have been received by Canteen Stores Department for the purpose of subsequent
supply to the Unit Run Canteens of the Canteen Stores Department or to the authorized
customers of the Canteen Stores Department.”
(ii) After FORM GST RFD-10, FORM GST RFD 10A may be inserted, in the format enclosed as
Annexure A.
4. The Law Committee also recommended that the validation of the input supplies should be
made on the system with FORM GSTR-2B (instead of FORM GSTR-2A) of the concerned tax period
as well as of the previous tax periods and that Circular No. 60/34/2018-GST dated 04.09.2018 on
CSD refunds needs to be modified to clarify the proposed changes vide a circular. The draft circular
recommended by the Law Committee is enclosed as Annexure-B. The Law Committee further
recommended that the provisions of the Circular No. 60/34/2018-GST dated 04.09.2018 may continue
to apply for all refund applications filed manually before the said amendments are notified and the
said functionality is made available on the portal. Such application file manually shall continue to be
processed manually accordingly.

6. The agenda note is placed before the GST Council for deliberation and approval.
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Annexure A
FORM GST RFD-10A
(See Rule 95B)
Application for refund by Canteen Stores Department (CSD)

1. GSTIN :
2. Name :
3. Address :
4. Tax Period (Quarter) : From <DD/MM/YY>To <DD/MM/YY>
5. Amount of Refund Claim :<INR><In Words>
6. Details of inward supplies of goods received:

GSTIN of
the
Supplier
Type of the
Document
Invoice details / Debit Notes /
Credit Notes
Rate Taxable
Value
Amount of Tax
Invoices/Credit
Notes/Debit notes
No. Date Value Integrate
d Tax
Central
Tax
State Tax
1 2 3 4 5 6 7 8 9 10
7. Total refund applied for:
Central Tax State/UT Tax Integrated Tax Total


<Total> <Total> <Total> <Total>
8. Details of Bank Account:
a. Bank Account Number
b. Bank Account Type
c. Name of the Bank
d. Name of the Account Holder
e. Address of Bank Branch
f. IFSC
g. MICR

9. Attachment of the documents along with the refund application:

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10. Verification
I _______ as an authorised representative of << Name of Canteen Stores Department>>
hereby solemnly affirm and declare that the information given herein above is true and correct
to the best of my knowledge and belief and nothing has been concealed therefrom. I further declare
that all the goods, in respect of which the refund is being claimed, have been received by us for the
purpose of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the authorized
customers of the CSD and that no refund has been claimed earlier against any of the invoices
against which refund has been claimed in this application.

Date: Signature of Authorised Signatory:
Place: Name:
Designation / Status
Agenda for 53rd GSTCM Volume 1
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Annexure-B
Circular No. xxx /xx/2024 -GST
F. No. CBIC-xx/xx/xx/xxxx-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the xx January,
2024
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
The Principal Chief Controller of Accounts, CBIC

Madam / Sir,
Subject: Processing of refund applications filed by Canteen Stores Department (CSD) -
regarding
The Central Government, vide notifications No. 06/2017-Central Tax (Rate), No. 06/2017-
Integrated Tax (Rate) and No. 06/2017-Union territory Tax (Rate), all dated 28th June 2017, had
specified the Canteen Stores Department (“CSD” for short), under the Ministry of Defence, as a
person who shall be entitled to claim a refund of fifty per cent of the applicable central tax,
integrated tax and Union territory tax paid by the CSD on all inward supplies of goods received by
the CSD for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD
or to the authorized customers of the CSD. Further, vide Circular No. 60/34/2018-GST dated
04.09.2018, the manner and procedure for filing and processing of such refund claims was specified
so as to ensure that the CSD shall apply for refund by filing an application manually to the
jurisdictional tax office till the time the online utility for filing such refund claim is made available
on the common portal.
2. In order to enable such CSD to file application for refund electronically, a new functionality
has been made available on the common portal which allows CSD to apply for refund by filing an
application electronically on the common portal. Further, Central Goods and Service Tax Rules,
2017 (hereinafter referred to as ‘CGST Rules’) have been amended and a new rule 95B and FORM
GST RFD-10A have been inserted in CGST Rules vide Notification No XXX-Central Tax dated
XXX.
3. In order to ensure uniformity in the implementation of the provisions of law across field
formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods
and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby lays down the
following revised procedure for electronic submission and processing of refund application by CSD,
in accordance with Section 55 of CGST Act, 2017, in supersession of Circular No. 60/34/2018-GST
dated 04.09.2018.

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4. Filing of refund application:
The CSD, who wants to wants to file an application for refund under sub- section 55 of
CGST Act, in cases where the refund is claimed of fifty per cent of the applicable central tax,
integrated tax and Union territory tax paid by the said CSD on all inward supplies of goods received
by it, for the purposes of subsequent supply of such goods to its Unit Run Canteens or to its
authorized customers, shall file an application for refund in FORM GST RFD-10A electronically
on the common portal and the same shall be processed electronically. The refund to be granted to the
CSD shall be based on the invoices of the inward supplies of goods received by it for the purposes of
subsequent supply of such goods to its Unit Run Canteens or to its authorized customers.
5. Filing of refund claim by CSD:
The CSD may apply for refund with the jurisdictional Central tax/State tax authority to
whom the CSD has been assigned. In terms of rule 95B of the CGST Rules, the CSD is required to
apply for refund once in every quarter. The CSD will also be allowed to file the refund application
for multiple quarters, clubbing multiple FYs, as per their option. The refund of the tax paid by the
CSD shall be available only if the inward supplies of goods were received from a registered person
against a tax invoice and details of such supplies have been furnished by the said registered person
in his details of outward supply in FORM GSTR-1 and the said supplier has furnished his return in
FORM GSTR-3B for the concerned tax period. The CSD while filing the refund application shall
ensure that all the invoices declared by it have the GSTIN of the supplier and the GSTIN of the
respective CSD clearly mentioned on them. The said refund application form shall be accompanied
with the following documents:
(i) An undertaking stating that the goods on which refund is being claimed have been
received by the CSD for the purposes of subsequent supply of such goods to its Unit Run
Canteens or to its authorized customers; and
(ii) A declaration stating that no refund has been claimed earlier against the invoices on
which the refund is being claimed.

6. Relevant date for filing of refund:
As per sub-section (2) of section 54 of the CGST Act, a person notified under Section 55 of
the CGST Act, 2017, can file the application for refund of tax paid by it on inward supplies of goods
or services or both, before the expiry of two years from the last day of the quarter in which such
supply was received. Therefore, as the CSD have been notified under section 55 of CGST Act vide
notifications No. 06/2017-Central Tax (Rate), No. 06/2017-Integrated Tax (Rate) and No. 06/2017-
Union territory Tax (Rate), all dated 28th June 2017, as a person entitled to claim a refund of fifty per
cent of the applicable central tax, integrated tax and Union territory tax paid by it on all inward
supplies of goods received for the purposes of subsequent supply of such goods to its Unit Run
Canteens or to its authorized customers, the CSD can file the refund of fifty per cent of tax paid on
such inward supplies of goods before expiry of two years from the last day of the quarter in which
such supply was received.
7. Processing and sanction of the refund claim:
7.1 The proper officer shall process the refund claim filed by the CSD in a manner similar to the
refund claims filed in FORM GST RFD-01 under the provisions of rule 89 of CGST Rules. The
proper officer while processing the refund application shall validate the GSTIN details of the CSD on
the common portal to ascertain whether all the returns in FORM GSTR-1 and FORM GSTR-3B,
which were due to be furnished on or before the date on which the refund application is being filed,
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have been filed. The proper officer may scrutinize the details contained in FORM RFD-10A, FORM
GSTR-3B and FORM GSTR-2B, for processing the said refund claim. The proper officer shall also
verify whether the details of the invoices for which refund has been claimed by the CSD, have been
furnished by the concerned supplier in his details of outward supply in FORM GSTR-1 and the said
supplier has furnished his return in FORM GSTR-3B for the concerned tax period.
7.2 Further, the proper officer shall ensure that the amount of refund sanctioned is not more than
50 % of the Central tax, State tax, Union territory tax and integrated tax paid on the supplies received
by CSD. It may be noted that the invoices uploaded by the CSD while filing will be validated on the
portal with FORM GSTR 2B of the applicant and only the validated invoices will be allowed in the
application. The invoices for which refund has already been availed by the CSD will be flagged in the
system and will not be allowed for the refund. The Table in Sl. No. 7 of FORM GST- RFD 10A will
be auto-populated on the portal based on the 50 % of the amount of respective tax (Central, State and
Integrated Tax) as per the Col 8, 9 and 10 of the Table in Sl. No. 6 of FORM GST- RFD 10A.The
Table in Sl. No. 7 of FORM GST- RFD 10A shall be kept editable downwards, i.e., the CSD will be
able to make a downward revision in the auto-populated amount in the said Table and cannot enhance
the auto-populated amount in the said Table. The proper officer shall also verify whether the ITC in
respect of such inward supplies of goods received for the purposes of subsequent supply of such
goods to its Unit Run Canteens or to its authorized customers has been reversed by the CSD as
clarified in Circular no. 170/02/2022-GST dated 06-Jul-2022.
7.3 The proper officer shall scrutinize the application with respect to completeness and eligibility
of the refund claim to his satisfaction and issue the order in FORM GST RFD-06 accordingly. The
proper officer shall also upload a detailed speaking order along with the order in FORM GST RFD-
06.
8. It is also mentioned that the provisions of the Circular No. 60/34/2018-GST dated 04.09.2018
shall continue to apply for all refund applications filed manually before the amendments in CGST
Rules mentioned in Para 2 above and before the said functionality being made available on the
common portal. The said applications filed manually shall continue to be processed manually,
according to the earlier circular.
9. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
10. Difficulty, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)
Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxxii): Procedure for payment of IGST by SEZ unit located in Noida SEZ on
DTA clearances.

A reference has been received from the Secretary, Department of Commerce, wherein it has
been mentioned that due to the inability of the bank to accept IGST payments through TR-6 Challans
on the clearances by Noida SEZ (NSEZ) units to Domestic Tariff Area (DTA) during the period
August 2017 to November 2018, these units have paid the IGST due on such DTA clearances through
the GSTN online payments. He has also mentioned that though the goods have been cleared by these
units on payment of applicable duties on such DTA clearances in a bonafide manner, enforcement
action has been initiated against certain NSEZ units by some tax authorities alleging non-payment of
IGST due on such DTA clearances. He has requested that since these SEZ units have paid IGST due
on such DTA supplies in one manner or the other, the same may be taken into consideration for
regularization of such IGST payments made by NSEZ units as it essentially seems to be a case of
payment of IGST through GSTN online system, instead of the TR-6 challan mode, to avoid further
distress to exporters from avoidable enforcement action. Representations have also been received
from trade on this issue.

1.2 Further, another reference has also been received from the Secretary, Department of
Commerce, wherein it has been flagged that if any interpretation is made regarding levy of IGST on
the clearance of goods in DTA by the SEZ Units/ Developer twice i.e. once as levy of customs under
sub-section (7) of Section 3 of Customs Tariff Act, 1975 and second time under Section 5 of the IGST
Act, 2017, then necessary amendments may be carried out retrospectively in the IGST Act, 2017 so
that IGST is levied only once on clearances from SEZ units to DTA as imports under the Customs
Tariff Act, 1962 read with Section 30 of SEZ Act, 2005.

2. From analysis of the references received from the Secretary, Department of Commerce as
well as representations received from trade, the following two issues need deliberation:-

I. Whether the payment of IGST on DTA clearances by NSEZ units by depositing the
IGST amount in the Electronic Cash Ledger of their GSTIN as per the procedure adopted in
NSEZ during the period of August 2017 to November 2018, due to non-acceptance of TR-6
challans for such duty by Punjab National Bank may be considered as payment of duties of
Customs under Customs Tariff Act, 1975 read with Section 30 of SEZ Act and whether the
same may be regularized; and

II. Whether in respect of the supply of goods to DTA by the SEZ Units/ Developer, in
addition to payment of IGST as duties of Customs under sub-section (7) of Section 3 of
Customs Tariff Act, 1975 (CTA, 1975) read with proviso to sub-section (1) of section 5 of the
IGST Act, 2017 and section 30 of SEZ Act, 2005, payment of IGST is also required to be
Agenda for 53rd GSTCM Volume 1
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made simultaneously as inter-state supplies under sub-section (1) of Section 5 of the IGST
Act, 2017 read with section 7(5)(b) of IGST Act.

3. Briefly stated, facts in respect of issue raised in point (I) of Para 2 above are as follows:

3.1 Prior to GST, the SEZ units, while making clearance of goods to DTA, were discharging the
Customs duties on such clearances vide TR-6 challan in terms of the provisions of Section 30 of
SEZ Act, 2005.

3.2 However, post implementation of GST, during the period August 2017 to November 2018, due to
refusal of the Punjab National Bank to accept IGST payments through TR-6 challans alongwith
payments of Basic Customs Duty (BCD), the SEZ units in NSEZ paid the IGST due on clearances
to DTA through online payments on GSTN portal, even though BCD on such DTA supplies
continued to be paid through TR-6 challans.

3.3 As per the details of the procedure for duty payment by NSEZ units during the said period as
provided by Department of Commerce vide letter dated 27.12.2019, it has been confirmed that the
practice of paying IGST through GSTN (Electronic Cash Ledger on GST portal) for DTA
clearances was prevalent at NSEZ from August 2017 to November 2018 which was necessitated
because of the refusal of the Punjab National Bank to accept the IGST payments through TR-6
challans. NSEZ units were filing Bill of Entry for the clearance of the goods to DTA during this
period by giving details of BCD paid through TR-6 challans on the Bill of Entry, while manually
mentioning the details of IGST paid through FORM GST PMT-06 challan on GST online
system on the said Bill of Entry.
3.4 The IGST payment through TR-6 challan began in November, 2018 after a clarification dated
08.11.2018 issued by Department of Commerce.

3.5 In the meantime, DGGI initiated investigations against units located in NSEZ for alleged non-
payment of IGST on the supplies made by SEZ unit to DTA during the period August 2017 to
November 2018.

3.6 The Department of Commerce has provided the following data regarding the quantum of
IGST involved in such DTA clearances by NSEZ units during the said period:-

(a) Total 97 NSEZ units have deposited IGST amount of Rs. 1,88,96,40,664 in Electronic Cash
Ledger, under section 3(7) of the Customs Tariff Act, 1975 read with Section 30 of SEZ Act
2005.
(b) Out of 97 units mentioned in para 3.6 (a) above:
(i) 37 Units have debited the full amount of Rs. 92,74,00,752 deposited in Electronic
Cash Ledger either by filing return in FORM GSTR-3B or by filing FORM DRC-03.
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(ii) 12 units have debited the partial amount of Rs. 3,55,40,545 out of the total amount
of IGST of Rs. 14,54,83,040 in Electronic Cash Ledger and therefore Rs.
10,99,42,494 is still lying in Electronic Cash Ledger of these 12 SEZ units.
(iii) 48 units have not debited any amount of IGST from Rs. 81,68,03,944 deposited in
Electronic Cash Ledger.

(c) The purpose/ reasons of debiting the above amounts by the 37 units mentioned in para 3.6
(b)(i) are not same for all units and these units have debited the IGST for two different
reasons, which are:
(i) 3 units have debited full amount of IGST i.e. Rs. 67,08,88,802 deposited in Electronic
Cash Ledger by way of filing FORM DRC-03 as correction measure suggested by
senior officers of DGGI team during the investigation and search made by them on
these units (i.e. as payment of IGST for supplies made by NSEZ units to DTA).
(ii) 34 Units have debited full amount of IGST i.e. Rs. 25,65,11,439 by way of setting off
their liability generated on filing of return in FORM GSTR-3B and outwards supply
statement in FORM GSTR -1.
(d) The purpose/ reasons of debiting the above amounts by 12 units mentioned in para 3.6 (b)(ii)
are that they have debited partial amount of IGST amounting to Rs. 3,55,40,545 by way of
setting off their liability generated on filing of FORM GSTR 3B and FORM GSTR -1, and
Rs. 10,99,42,494 is still lying in the Electronic Cash Ledger of these 12 SEZ units.
(e) Thus, 60 units (12 units mentioned in para 3.6 (b)(ii) above and 48 units mentioned in Para
3.6 (b)(iii) above) have either not debited any amount of IGST in Electronic Cash Ledger or
have debited only partial amount of IGST in Electronic Cash Ledger. Therefore, Rs
92,67,46,439 is still lying in the Electronic Cash Ledger of these 60 SEZ units (including the
unutilized balance of Rs. 10,99,42,494 of 12 SEZ units, as mentioned in para 3.6 (b)(ii)
above).
4. The matter was deliberated by the Law Committee in its meeting held on 08.12.2023 and the
following was observed.

4.1 Issue of Dual levy of IGST on supplies from SEZ units to DTA:
4.1.1 In respect of the issue mentioned at point (II) of Para 2 above regarding levy of IGST on
supplies from SEZ units to DTA, reference is invited to sub-section (1) of section 5 of the IGST Act,
2017 which provides for levy and collection, which is reproduced below as under:
“5. Levy and collection.— (1) Subject to the provisions of sub-section (2), there shall be
levied a tax called the integrated goods and services tax on all inter-State supplies of goods
or services or both, except on the supply of alcoholic liquor for human consumption, on the
value determined under section 15 of the Central Goods and Services Tax Act and at such
rates, not exceeding forty percent, as may be notified by the Government on the
recommendations of the Council and collected in such manner as may be prescribed and shall
be paid by the taxable person:
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Provided that the integrated tax on goods imported into India shall be levied and collected in
accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as
determined under the said Act at the point when duties of customs are levied on the said
goods under section 12 of the Customs Act, 1962.”
4.1.2 Reference is further invited to sub-section (7) of section 3 of the Customs Tariff Act,
1975 (CTA, 1975) which provides for levy of IGST on goods imported into India. Sub-section (7) of
section 3 of the Customs Tariff Act, 1975 is reproduced as under:
“(7) Any article which is imported into India shall, in addition, be liable to integrated tax at
such rate, not exceeding forty percent as is leviable under section 5 of the Integrated Goods
and Services Tax Act, 2017 on a like article on its supply in India, on the value of the
imported article as determined under sub-section (8) or sub-section (8A), as the case may
be.”

4.1.3 On perusal of the aforesaid provisions, it is noticed that the levy of IGST on goods imported
in India under sub-section (7) of Section 3 of Customs Tariff Act, 1975 is in accordance with the
powers specified vide proviso to sub-section (1) of the section 5 of the IGST Act, 2017 as the
provisions under CTA, 1975 have been made applicable for levy and collection of IGST on such
imports.

4.1.4 It would also be pertinent to refer to the section 30 of the SEZ Act, 2005 regarding domestic
clearance by SEZ Units. Section 30 of the SEZ Act, 2005 is reproduced below:
“30. Subject to the conditions specified in the rules made by the Central Government in this
behalf:-
(a) any goods removed from a Special Economic Zone to the Domestic Tariff Area shall be
chargeable to duties of customs including anti-dumping, countervailing and safeguard duties
under the Customs Tariff Act, 1975, where applicable, as leviable on such goods when
imported; and
(b) the rate of duty and tariff valuation, if any, applicable to goods removed from a Special
Economic Zone shall be at the rate and tariff valuation in force as on the date of such
removal, and where such date is not ascertainable, on the date of payment of duty.”

4.1.5 Further, section 7(5) of IGST Act is also reproduced below:
“Supply of goods or services or both,-
(a) when the supplier is located in India and the place of supply is outside India;
(b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
(c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this
section,
shall be treated to be a supply of goods or services or both in the course of inter-State
trade or commerce.”
4.1.6 On perusal of the said provisions, it can be stated that supply of goods by SEZ units to DTA are
akin to imports and are thus chargeable to IGST in terms of the provisions of section 30 of the SEZ
Act read with sub-section (7) of section 3 of Customs Tariff Act, 1975 read with proviso to sub-
section (1) of section 5 of the IGST Act, 2017.
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4.1.7 Law Committee was of the view that as section 30 of SEZ Act provides for levy of duties
under Customs Tariff Act, 1975 on all DTA clearances, and clearance of such goods by SEZ Units in
DTA are chargeable to IGST as duties of customs under sub-section (7) of CTA, 1975 read with
proviso to sub-section (1) of section 5 of IGST Act, 2017, IGST is not separately leviable again as
inter-state supply on such DTA supplies by SEZ units as per sub-section (1) of section 5 of IGST Act
read with section 7(5)(b) of IGST Act. Law Committee also observed that the same supply of goods
cannot be levied twice under the Section 5 of IGST Act, once under sub-section (1) of Section 5 and
then under proviso to sub-section (1) of Section 5. Accordingly, Law Committee recommended that
IGST cannot be levied twice on the same supply of goods from SEZ units to DTA and IGST is
payable on such supply, only once as duties of customs as per Section 30 of SEZ Act read with sub-
section (7) of section 3 of CTA, 1975 and proviso to Section 5(1) of IGST Act.

4.2 Issue of regularization of IGST payments done by NSEZ units during the period
August 2017 to November 2018:

4.2.1 In respect of the issue referred at point (I) of Para 2 above regarding the problem faced
by units of NSEZ due to non-acceptance of Customs TR-6 challan by bank for supply of goods from
SEZ units to DTA during the period August 2017 to November 2018, the Law Committee noticed that
from the facts mentioned in Para 3 above, it is found that the process followed by the NSEZ units
regarding the payment of IGST on DTA clearances by depositing the amount in the Electronic Cash
Ledger under IGST head on the GST portal during the period of August 2017 to November 2018, was
due to non-acceptance of TR-6 challans for such duty payment by Punjab National Bank and it was
uniformly followed in NSEZ during the said period for processing DTA bill of entry by specified
officers.

4.2.2 Law Committee also noticed that as per the details received from the Department of
Commerce, the practice being followed by NSEZ units regarding paying of IGST through electronic
cash ledger on GST portal for supplies from NSEZ units to DTA during the said period was in the
knowledge of NSEZ authorities as well as of Department of Commerce and that such payment of
IGST through e-challan (FORM GST PMT-06 challan) was necessitated due to the refusal of the bank
to accept the GST payments through TR-6 challan.

4.2.3 Law Committee observed that this practice of depositing the IGST dues through the e-
payment challan (FORM GST PMT-06 challan) was not a deliberate practice adopted by these SEZ
units themselves but was rather adopted temporarily due to the refusal of the PNB bank in the Noida
SEZ to accept the IGST payments through TR-6 challan and as per the procedure adopted by NSEZ
authorities. Hence, it would not be desirable to demand the IGST in respect of DTA clearances by the
units in NSEZ during the period August 2017 to November 2018 as customs duty again, when they
have already paid the said duty by way of e-payment challan (FORM GST PMT-06 challan) instead
of the payment of IGST through the TR-6 challan.

4.2.4 Law Committee accordingly observed that the amount of IGST of Rs. 1,88,96,40,664/-
deposited by these NSEZ units in their Electronic Cash Ledger through FORM GST PMT-06 challan
during the period August 2017 to November 2018 in respect of the DTA clearances may be treated as
payment of IGST as part of Customs duty under the provisions of sub-section (7) of section 3 of
Customs Tariff Act, 1975, read with Section 30 of SEZ Act 2005 and proviso to Section 5(1) of IGST
Act, and may be regularized as payment of duties of customs.
Agenda for 53rd GSTCM Volume 1
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5. Law Committee further observed that as the said IGST deposits in Electronic Cash
Ledger is proposed to be considered as payment of IGST under the provisions of sub-section (7) of
section 3 of Customs Tariff Act, 1975, read with Section 30 of SEZ Act, the interest on delayed
payment of tax under Section 50 may not be applicable in respect of the said payments, irrespective of
whether the amount lying in Electronic Cash Ledger has been debited or not.

6. Law Committee also observed that in respect of cases where these SEZ units have shown
their DTA removal in FORM GSTR 1 and FORM GSTR 3B to set off their balance in Electronic
Cash Ledger, the same would have been appearing in the FORM GSTR 2A of the buyer. In such
cases, there is a possibility that the buyers have availed input tax credit on the said DTA supplies
twice, once on the basis of the BOE endorsed by Customs and second, on the basis of invoice and
FORM GSTR 2A. Therefore, it needs to be ensured that the DTA recipient of the said NSEZ units
have not availed ITC on such amount two times, once on the basis of Bill of Entry and another on the
basis of invoice/ GSTR 2A/ DRC 03.

7. In view of the above, Law Committee made the following recommendations:
7.1 The amount of IGST of Rs. 1,88,96,40,664/- deposited by NSEZ units in their Electronic
Cash Ledger through FORM GST PMT-06 challan during the period August 2017 to November 2018
in respect of the DTA clearances may be treated as payment of IGST as part of Customs duty under
the provisions of sub-section (7) of section 3 of Customs Tariff Act, 1975, read with Section 30 of
SEZ Act 2005 and proviso to Section 5(1) of IGST Act, and may be regularized as duties of customs.
7.2 As IGST of Rs. 1,88,96,40,664/- has been paid by NSEZ units on such DTA clearances
during the period August 2017 to November 2018 by depositing in their Electronic Cash Ledger
through FORM GST PMT-06 challan, no interest shall be payable under section 50 of CGST Act in
respect of the said amount, irrespective of whether the amount lying in Electronic Cash Ledger has
been debited or not.
7.3 In respect of payment made through FORM DRC-03 by 3 units as mentioned in Para 3.6
(c)(i), the amount Rs. 67,08,88,802/- paid by these 3 units may be treated as IGST paid as part of
Customs duty. However, this regularization may be allowed subject to the condition that ITC is not
availed twice by the recipients in these cases, as there is a possibility that the recipients (in DTA) of
these SEZ units may have taken the benefit of input tax credit two times on their purchases made i.e.
once on the basis of Bill of Entry and another on the basis of invoice/ FORM GSTR 2A/ FORM DRC
03.

7.4 In respect of the amount of Rs. 29,20,51,984/- paid by 46 units through FORM GSTR 3B for
the liability created through FORM GSTR-1/ FORM GSTR-3B as mentioned in Paras 3.6 (c)(ii) &
3.6 (d), since the jurisdiction to collect IGST on SEZ removals as part of Customs duty lies with the
Customs Authorities under sub-section (7) of section 3 of Customs Tariff Act, 1975, the SEZ units are
not required to pay the IGST on SEZ removals by way of creating a liability in FORM GSTR 3B and
setoff the same by debiting the amount lying in Electronic Cash Ledger. Further, the said amount may
be regularized as payment of IGST as part of Customs duty. This regularization may be allowed
subject to the condition that ITC is not availed twice by the recipients in these cases, as there is a
possibility that the recipients (in DTA) of these SEZ units may have taken the benefit of input tax
credit two times on their purchases made i.e. once on the basis of Bill of Entry and another on the
basis of invoice and GSTR 2A.
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7.5 To ensure that no double benefit of ITC is availed by the DTA recipients in cases mentioned
in Paras 7.1 & 7.2 above, the concerned SEZ units may be asked to procure a Chartered Accountant
(CA) or the Cost Accountant (CMA) certificate in respect of each of their DTA recipient unit
during the period August 2017 to November 2018, and submit it to the concerned Specified Officer of
NSEZ, certifying that the concerned DTA recipient has not availed ITC twice on the same supply in
respect of all the DTA supplies made by the said SEZ unit during the said period (i.e. once on the
basis of BOE and another on the basis of invoice/ FORM GSTR 2A/ FORM DRC 03).

7.6 For this purpose, Director General of Export Promotion, CBIC may be mandated to
coordinate with Department of Commerce to procure/ collect the compiled CA/ CMA certificates in
respect of these 49 NSEZ units. Based on these certificates, further action may be taken by DGEP for
regularization of the said IGST payment.

7.7 Besides, the list of such DTA recipients alongwith the concerned SEZ unit may be separately
sent by DGEP to the concerned jurisdictional tax authorities for due time bound verification to ensure
that the said DTA recipient has not availed ITC twice on the same supply in respect of all the DTA
supplies made by the said SEZ unit during the said period (i.e. once on the basis of BOE and another
on the basis of invoice/ FORM GSTR 2A/ FORM DRC 03) and to take remedial action, if required, to
safeguard Government revenue.

7.8 In respect of the amount of Rs. 92,67,46,439, which has not been debited as mentioned in
Para 3.6 (e), the amount lying un-utilized in Electronic Cash Ledger may be regularized and treated as
IGST paid as duties of customs.

7.9. For the regularization of amount of IGST deposited by these NSEZ units in their electronic
cash ledger as per paras above, DGEP may work out the modalities for such regularization in
coordination with GSTN & DG Systems and in consultation with Office of Pr. CCA.
8. The agenda note and the recommendations of the Law Committee are placed before the GST
Council for deliberation and approval.

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Agenda Item 3(xxxiii): Seeking clarity on Time of supply in respect of supply of allotment of
Spectrum to Telecom companies in cases where an option is given to the Telecom Companies for
payment of licence fee and Spectrum usage charges in instalments in addition to an option of
upfront payment.

References have been received from the Secretary, Department of Telecommunications,
Ministry of Communication, Government of India, Member (Finance), Digital Communications
Commission, Government of India and the Cellular Operators Association of India (COAI) to issue
clarification regarding the time of supply for the purpose of payment of GST in respect of supply of
spectrum allocation services in cases of deferred payment for the spectrum allocated to telecom
operators.

2. BACKGROUND:

2.1. The Government of India, through the Department of Telecommunications (DoT), invited
application for auction of Spectrum to assign the right to use certain specified radio spectrum
frequencies in various Licensed Service Areas (LSA), for a period of twenty years from the date of
frequency assignment to the telecom operator. The Notice Inviting Application (NIA) specified
payment terms and the terms of contract which were to be accepted by the telecom operator / bidder.

2.2. Successful bidders were required to make the payment of the final bid amount after issuance
of Frequency Assignment Letter (FAL) by the Wireless Planning and Finance (WPF) Wing of DoT in
any of the following two options:
Option I: Full upfront payment within 10 days of declaration of final price; or
Option II: Deferred payment in instalments for a specified period.

2.3. In addition to the successful bid amount, Spectrum Usage Charge as a percentage of the
Adjusted Gross Revenue (AGR) is also required to be payable by the successful bidders as per the
rates, procedures and methodology notified by the Government from time to time.

2.4. The WPF Wing of DoT issues a Frequency Assignment Letter/ demand note informing the
successful bidder about the acceptance of his bid by Government. This letter inter-alia mentions about
the details of spectrum (band-wise and LSA-wise) along with the details and schedule of payments to
be made by the telecom operator.


3. ISSUE IN BRIEF:

3.1. Most of the telecom operators have chosen Option II i.e. deferred payment in instalments for
a specified period, along with applicable interest, as specified in the Frequency Assignment Letter.

3.2. In respect of supply of spectrum allocation services, the telecom operators, being the
recipients of the said supply, are required to discharge GST liability on reverse charge basis. The
telecom operators are discharging their GST liability on the said supply at the time of making
payment, either upfront fee or annual instalments with interest as specified in the Frequency
Assignment Letter, to the Government.
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3.3. It has been represented that some of the tax authorities have issued letters to the telecom
operators for payment of GST on the entire bid amount payable, irrespective of the payment option
adopted by the operators and irrespective of the fact that in case of option for deferred payment
scheme exercised by the telecom operator, payment may still be required to be made as per the date of
the payment for instalments mentioned in Frequency Assignment Letter/ demand note. As per the
representations, spectrum allocation is a case of ‘continuous supply of services’ as per section 2(33)
of CGST Act, 2017 where its usage is allotted for a period of 20 years with periodic payment
obligation as laid down in NIA, as specified in Frequency Assignment Letter. It has also been
represented that since the Frequency Assignment Letter/ demand note clearly specifies the due dates
for payment of each yearly instalment, the industry has correctly paid the tax as per the Section 13(3)
of CGST Act, 2017.
4. VIEW POINT OF FIELD FORMATIONS/ INVESTIGATIVE AGENCIES:
Some of the field formations are taking a view that as this is a supply in which tax liability is
to be paid on reverse charge basis, the time of supply would be decided in accordance with section
13(3)(b) of the Central Goods and Service Tax Act, 2017 (CGST Act, 2017) and accordingly, the
GST liability would arise from the date immediately following sixty days from the date of issuance
of the Frequency Assignment Letter by DoT.

5. GST provisions applicable:

5.1 The ‘Continuous supply of services’ is defined under section 2(33) of the CGST Act,
2017 as reproduced below:
2. Definitions.— In this Act, unless the context otherwise requires,––
……
(33) ―continuous supply of services means a supply of services which is provided, or
agreed to be provided, continuously or on recurrent basis, under a contract, for a period
exceeding three months with periodic payment obligations and includes supply of such
services as the Government may, subject to such conditions, as it may, by notification,
specify;

5.2 Section 13 of the CGST Act, 2017 provides for time of supply for payment of the tax
liability on supply of services. Sub-section (3) of section 13 provides for time of supply of
services on which tax has to be paid by the recipient on reverse charge basis. Section 13 of the
CGST Act, 2017 is reproduced below:
“13. Time of Supply of Services.—

(1) The liability to pay tax on services shall arise at the time of supply, as determined in
accordance with the provisions of this section.
(2) The time of supply of services shall be the earliest of the following dates, namely:-
(a) the date of issue of invoice by the supplier, if the invoice is issued within the
period prescribed under section 31 or the date of receipt of payment, whichever is
earlier; or
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(b) the date of provision of service, if the invoice is not issued within the period
prescribed under section 31 or the date of receipt of payment, whichever is earlier; or
(c) the date on which the recipient shows the receipt of services in his books of
account, in a case where the provisions of clause (a) or clause (b) do not: apply.
(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge
basis, the time of supply shall be the earlier of the following dates, namely:-
(a) the date of payment as entered in the books of account of the recipient or the
date on which the payment is debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the date of issue of invoice or
any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or
clause (b), the time of supply shall be the date of entry in the books of account of the recipient
of supply:

………………………….

(6) The time of supply to the extent it relates to an addition in the value of supply by way of
interest, late fee or penalty for delayed payment of any consideration shall be the date on
which the supplier receives such addition in value.”

5.3 Section 31 of the CGST Act, 2017 provides for Tax invoices as follows:

“ 31. Tax invoice.—
(1) A registered person supplying taxable goods shall, before or at the time of,—
………………………………………………………………………………
(3) Notwithstanding anything contained in sub-sections (1) and (2)––
………………………………
(f) a registered person who is liable to pay tax under sub-section (3) or sub-section
(4) of section 9 shall issue an invoice in respect of goods or services or both
received by him from the supplier who is not registered on the date of receipt of
goods or services or both;

(g) a registered person who is liable to pay tax under sub-section (3) or sub-section
(4) of section 9 shall issue a payment voucher at the time of making payment to the
supplier.
………………….
(5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of
services,––
(a) where the due date of payment is ascertainable from the contract, the invoice shall be
issued on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, the invoice shall be
issued before or at the time when the supplier of service receives the payment;
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(c) where the payment is linked to the completion of an event, the invoice shall be issued on or
before the date of completion of that event.”

6. Position in Service Tax Regime

6.1 In the Service Tax era, as per the 4th proviso to Rule 7 of the Point of Taxation Rules,
2011, the point of taxation was governed by an explicit provision. The relevant extract reads as
follows:
“Provided also that in case of services provided by the Government or local authority to
any business entity, the point of taxation shall be the earlier of the dates on which, -
(a) any payment, part or full, in respect of such service becomes due, as specified
in the invoice, bill, challan or any other document issued by the Government or
local authority demanding such payment; or
(b) payment for such services is made.”

6.2. Based on the above provisions, CBIC vide Circular No. 192/02/2016- ST dated 13th April,
2016 clarified that in cases of deferred payment of bid amount for spectrum by the telecom
operators, the service tax would be payable as and when the installment payments are due or
made, whichever is earlier. The said clarification is reproduced below:
Issue no 10:
“When does the liability to pay Service Tax arise upon assignment of right to use
natural resource where the payment of auction price is made in 10 (or any
number of) yearly (or periodic) instalments under deferred payment option for
rights assigned after 1.4.2016.”
Clarification:- “ Rule 7 of the Point of Taxation Rules, 2011 has been amended
vide Notification No. 24/2016 –ST dated 13.4.2016 to provide that in case of services
provided by Government or a local authority to any business entity, the point of
taxation shall be the earlier of the dates on which: (a) any payment, part or full, in
respect of such service becomes due, as indicated in the invoice, bill, challan, or any
other document issued by Government or a local authority demanding such payment;
or (b) such payment is made.
Thus, the point of taxation in case of the services of the assignment of right to use
natural resources by the Government to a business entity shall be the date on which
any payment, including deferred payments, in respect of such assignment becomes due
or when such payment is made, whichever is earlier. Therefore, if the
assignee/allottee opts for full upfront payment then Service Tax would be payable
on the full value upfront. However, if the assignee opts for part upfront and
remainder under deferred payment option, then Service Tax would be payable as
and when the payments are due or made, whichever is earlier.”

6.3 Therefore, under the erstwhile law, the liability to pay tax was linked with the due dates of
payment or the actual payment, whichever is earlier.
7. Examination:
7.1 Under the spectrum allocation model followed by DoT, bidder (telecom operator) bids for
securing the right to use spectrum offered by the government. Here, service provider is the
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Government of India (through DoT) and service recipient is the bidder/ telecom operator. The GST is
to be discharged on the supply of spectrum allocation services by the recipient of services (here, the
telecom operator) on reverse charge basis [Notification No. 13/2017-Central Tax (Rate) dated 28th
June, 2017 referred].
7.2. In respect of the said supply of spectrum allocation services, if the telecom operator chooses
the option to make payment in installments, the payment has to be made spread over the contract
period in installments and payment for each installment is to be made after specified periods, as
specified in the Frequency Assignment Letter of DoT, which is in the nature of contract. The same is
a ‘continuous supply of services’ as defined under section 2(33) of the CGST Act, 2017, since the
supply of services (here, spectrum usage) is agreed to be provided by the supplier (DoT) to the
recipient (telecom operator) continuously for a period which is exceeding three months with periodic
payment obligations.
7.3. As per section 13(1) of CGST Act, 2017, the liability to pay tax on supply of services shall
arise at the time of supply. In case of forward charge supplies, the time of supply of services is
governed by section 13(2) of CGST Act, 2017, which is the earlier of date of issue of invoice by the
supplier or date of provision of service or the date of payment, as the case maybe.
7.4. However, in respect of supply of services, on which tax is paid or liable to be paid on reverse
charge basis, as per Section 13(3) of CGST Act, 2017, the time of supply of services shall be the
earlier of the following dates, namely:-
(a) the date of payment as entered in the books of account of the recipient or the date on which
the payment is debited in his bank account, whichever is earlier; or
(b) the date immediately following sixty days from the date of issue of invoice or any other
document, by whatever name called, in lieu thereof by the supplier.
7.5 In the instant case, field formations are considering the Frequency Assignment Letter issued
by DoT as akin to ‘any other document, by whatever name called, in lieu of an invoice’ mentioned in
clause (b) of section 13(3) of CGST Act and are demanding interest on instalments paid after 60 days
from the date of issue of the same. On examination of the Frequency Assignment Letter, it is observed
that the same is in the nature of a bid acceptance document intimating the telecom operator that the
result of the auction has been accepted by the competent authority and the details of blocks and
spectrum allotted to the telecom operator. The frequency allotment letter also clearly mentions the
options and the amounts to be paid by the telecom operator in each of the two options.
7.6 As per section 31(5)(a) of CGST Act, 2017, in cases of continuous supply of services, where
the due date of payment is ascertainable from the contract, the invoice shall be issued on or before
such due date of payment. In the instant case, the date of payment to be made by the telecom operator
to DoT is clearly ascertainable from the Notice Inviting Applications (NIA) read with the Frequency
Assignment Letter. Accordingly, tax invoice will be required to be issued in respect of the said supply
of services, on or before such due date of payment as per the option exercised by the telecom
operator.
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8. In the light of above, in case where full upfront payment is made by the telecom operator,
GST would be payable when the payment of the said upfront amount is made or is due, whichever is
earlier, whereas in case where deferred payment is made by the telecom operator, GST would be
payable as and when such deferred payments are due or made, whichever is earlier.
9. It is worthwhile to highlight that the provisions for tax payment for upfront/ installments
under deferred payment option were same in service tax regime also as mentioned in para 6.2 above.
Since, the nature of supply remains same in GST regime also, it may be desirable that the treatment of
tax payment may also be similar.
10. Further, similar treatment regarding the time of supply, as is discussed in the above Para
should apply in all other cases where any natural resources are being allocated by the government to
the successful bidder/purchaser for right to use the said natural resource over a period of time,
constituting continuous supply of services as per the definition under section 2(33) of the CGST Act,
with the option of payments for the said services either through an upfront payment or in deferred
periodic installments over the period of time.
11. Law Committee in its meetings held on 24.01.2024 and 31.01.2024 deliberated on the issue
and recommended clarifying the time of supply in respect of supply of service of allocation of
spectrum and other natural resources as per Para 8 and 10 above through a circular. Draft circular, as
recommended by the Law Committee, is enclosed with this agenda note as Annexure-A.
12. The agenda is placed before GST Council for deliberation and approval.

**********











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ANNEXURE-A
Circular No. XX/XX/2024-GST

F. No. CBIC-20001/2/2022 - GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

New Delhi, Dated the XXXXXX, 2024
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification on time of supply of services of spectrum usage and other similar services
under GST -reg.

Representations have been received from the trade and the field formations seeking
clarification regarding the time of supply for payment of GST in respect of supply of spectrum
allocation services in cases where the successful bidder for spectrum allocation (i.e. the
telecom operator) opts for making payments in instalments under deferred payment option as
per Frequency Assignment Letter (FAL) issued by Department of Telecommunication (DoT),
Government of India.
6. In order to clarify the issue and to ensure uniformity in the implementation of the
provisions of law across the field formations, the Board, in exercise of its powers conferred by
section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST
Act”), hereby clarifies the issues as under:
S. No. Issue Clarification
Clarification on time of supply of services of spectrum usage and other
similar services under GST

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1. In cases of spectrum allocation
where the successful bidder (i.e.
the ‘telecom operator’) opts for
making payments in instalments as
mentioned in the Notice Inviting
Application (NIA) and Frequency
Assignment Letter (FAL) issued by
Department of Telecommunications
(DoT), Government of India, what
will be the time of supply for the
purpose of payment of GST on the
said supply of spectrum allocation
services.

Under the spectrum allocation model followed by
DoT, bidder (the telecom operator) bids for securing
the right to use spectrum offered by the government.
Here, service provider is the Government of India
(through DoT) and service recipient is the bidder/
telecom operator. The GST is to be discharged on
the supply of spectrum allocation services by the
recipient of services (the telecom operator) on
reverse charge basis [Notification No. 13/2017-
Central Tax (Rate) dated 28th June, 2017 referred].
2.1 In respect of the said supply of spectrum
allocation services, if the telecom operator chooses
the option to make payment in installments, the
payment has to be made spread over the contract
period in installments and payment for each
installment is to be made after specified periods, as
specified in the Frequency Assignment Letter of
DoT, which is in the nature of contract. The same is
a ‘continuous supply of services’ as defined under
section 2(33) of the CGST Act, since the supply of
services (spectrum usage) is agreed to be provided
by the supplier (DoT) to the recipient (telecom
operator) continuously for a period which is
exceeding three months with periodic payment
obligations.
2.2 As per section 13(1) of CGST Act, the
liability to pay tax on supply of services shall arise
at the time of supply. In case of forward charge
supplies, the time of supply of services is governed
by section 13(2) of CGST Act, which is the earlier
of date of issue of invoice by the supplier or date of
provision of service or the date of payment, as the
case maybe.
2.3 However, in respect of supply of services,
on which tax is paid or liable to be paid on reverse
charge basis, as per Section 13(3) of CGST Act,
2017, the time of supply of services shall be the
earlier of the following dates, namely:-
(a) the date of payment as entered in the
books of account of the recipient or the date
on which the payment is debited in his bank
account, whichever is earlier; or
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(b) the date immediately following sixty
days from the date of issue of invoice or
any other document, by whatever name
called, in lieu thereof by the supplier.
2.3.1 Some of the field formations are considering
the Frequency Assignment Letter issued by DoT as
akin to ‘any other document, by whatever name
called, in lieu of an invoice’ invoice’ mentioned in
clause (b) of section 13(3) of CGST Act and are
demanding interest on instalments paid after 60 days
from the date of issue of the same.
2.3.2 It is observed that Frequency Assignment
Letter is in the nature of a bid acceptance document
intimating the telecom operator that the result of the
auction has been accepted by the competent
authority and the details of blocks and spectrum
allotted to the telecom operator. The Frequency
Allotment Letter also mentions the options and the
amounts to be paid by the telecom operator in each
of the two options.
2.4 Further, as per section 31(5)(a) of CGST
Act, in cases of continuous supply of services,
where the due date of payment is ascertainable from
the contract, the invoice shall be issued on or before
such due date of payment. In the instant case, the
date of payment to be made by the telecom operator
to DoT is clearly ascertainable from the Notice
Inviting Applications read with the Frequency
Assignment Letter. Accordingly, tax invoice will be
required to be issued in respect of the said supply of
services, on or before such due date of payment as
per the option exercised by the telecom operator.
3. In the light of above, it is clarified that in
case where full upfront payment is made by the
telecom operator, GST would be payable when the
payment of the said upfront amount is made or is
due, whichever is earlier, whereas in case where
deferred payment is made by the telecom operator in
specified installments, GST would be payable as and
when the payments are due or made, whichever is
earlier.
4. It is also clarified that the similar treatment
regarding the time of supply, as is discussed in the
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8. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
9. Difficulty, if any, in implementation of this Circular may please be brought to the notice of
the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)



above paras, may apply in other cases also where
any natural resources are being allocated by the
government to the successful bidder/ purchaser for
right to use the said natural resource over a period of
time, constituting continuous supply of services as
per the definition under section 2(33) of the CGST
Act, with the option of payments for the said
services either through an upfront payment or in
deferred periodic installments over the period of
time.
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Agenda Item 3(xxxiv): Proposal for creation of unique identifiers for unregistered persons opting
to generate e-way bill.
In the 2nd National Co-ordination meeting of Central and State Tax officers held on
14.12.2023 under the chairmanship of the Hon’ble Union Revenue Secretary, it was discussed that there
is a need for providing a unique identifier for the unregistered persons desirous of generating e-way bill
for causing movement of goods, so as to keep track of supplies made or received by such unregistered
persons.
2. In terms of rule 138 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred
to as CGST Rules, 2017) every registered person causing movement of goods of consignment value
exceeding fifty thousand rupees is required to generate e-way bill. Further, in accordance with the first
proviso to sub-rule (3) of rule 138, generation of e-way bill is optional for a registered person or the
transporter in case the consignment value is less than fifty thousand rupees.

2.1 The second proviso to sub-rule (3) of rule 138 of CGST Rules, 2017 makes it optional for an
unregistered person causing movement of goods to generate e-way bill in FORM GST EWB-01.
Furthermore, in terms of the fourth proviso to sub-rule (1) of rule 138 of CGST Rules, 2017, in case of
inter-state movement of handicrafts goods by a person who has been exempted from the requirement of
obtaining registration under clauses (i) & (ii) of section 24 of the Central Goods And Services Tax Act,
2017 (hereinafter referred to as CGST Act, 2017), e-way bill is mandatorily required to be generated by
the said person, irrespective of the value of the consignment.

2.2 An unregistered person desirous of generating e-way bill has to generate the same from the facility/
module ‘E-way bills for citizens’. There is no mechanism to keep the track of the e-way bills he might
have generated on the earlier occasion(s), since the system does not create or store a unique identifier
in respect of the said unregistered person.

3. It appears that a system for creating or storing of a unique identifier in cases of generation of
e-way bill by an unregistered person engaged in business activities would not only help in data analysis
but would also prove to be user friendly for such persons.

3.1 Further, reference is drawn to Rule 58 of the CGST Rules, 2017 that provides for a provision for
enrolment of owner or operator of a godown or warehouse or transporter upon submission of his business
details on the common portal in FORM GST ENR-01 if they are not already registered under the GST
Acts. A transporter having the same PAN and who is registered in multiple states/ UTs, can also apply
for a unique common enrolment number by submitting details in FORM GST ENR-02.
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3.2 A similar facility, if created for unregistered persons engaged in business activities and desirous of
generating e-way bill, would prove to be beneficial in keeping a track of their business volume. This
would also relieve such unregistered persons from entering the same details over and over again for
generation of e-way bill.
4. The issue was deliberated by the Law Committee in its meeting held on 25.04.2024. The Law
Committee recommended that CGST Rules, 2017 may be amended suitably by incorporating a provision
for enrolment/ creation of a unique user id for unregistered persons engaged in business activities who
are desirous of generation of e-way bill, by way of insertion of a fourth proviso to sub-rule (3) of 138 of
the said Rules and also to create a functionality for the same on the common portal. The same is as given
below:


“Provided also that an unregistered person required to generate e-way bill in FORM GST
EWB-01 in terms of the fourth proviso to sub-rule (1) or an unregistered person opting to
generate e-way bill in Form GST EWB-01, on the common portal, shall submit the details
electronically on the common portal in FORM GST ENR- 03 either directly or through a
Facilitation Centre notified by the Commissioner and, upon validation of the details so
furnished, a unique enrolment number shall be generated and communicated to the said
person.”

4.1 Further, Law Committee in its meeting dated 25.04.2024 recommended that a new functionality may
be created on the common portal for enrolment/ creation of a unique user id and password for
unregistered persons engaged in business activities who opt to generate e-way bill and also to require
them to use such enrolment number/ unique user id and password for generation of e-way bill. For the
same, Law Committee recommended that a new FORM GST ENR-03 may be inserted in CGST Rules,
2017, which may allow unregistered persons who opt to generate e-way bill, to apply for unique
enrolment number. Draft FORM GST ENR-03 is as given below:












Agenda for 53rd GSTCM Volume 1
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FORM GST ENR-03
[See rule 138(3)]
Application for Enrolment
[only for un-registered persons]

1. Name of the State
2. (a) Name as per PAN
(b) Trade Name, if any
(c) PAN
(d) Aadhaar, if applicable (optional)
3. Type of enrolment
(i) Unregistered supplier of goods (ii) Unregistered recipient of goods
(iii) Both (i) & (ii)
4. Contact Information (the email address and mobile number will be used for authentication)
Email Address
Mobile Number
5. Consent
I on behalf of the holder of Aadhaar number <pre-filled based on Aadhaar number
provided in the form> give consent to “Goods and Services Tax Network” to obtain my details
from UIDAI for the purpose of authentication. “Goods and Services Tax Network” has informed
me that identity information would only be used for validating identity of the Aadhaar holder and
will be shared with Central Identities Data Repository only for the purpose of authentication.
6. List of documents uploaded
7. Verification
I hereby solemnly affirm and declare that the information given herein above is true and
correct to the best of my knowledge and belief and nothing has been concealed therefrom.


Place: Signature
Date: Name of Authorised Signatory
For Office Use:
Enrolment no Date-

5. The Agenda Note is placed before the GST Council for deliberation and approval.
Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxxv): Alignment of rule 96A of CGST Rules, 2017 with the provision of FEMA
Act, 1999.
Representations have been received from trade and industry requesting for amendment in
Rule 96A of the Central Goods & Services Rules, 2017 (hereinafter referred to as the CGST Rules) to
align the clause for realization of sale proceeds for exports of services in Rule 96A of CGST Rules
with the extensions permitted by the Reserve Bank of India (RBI) for realization of sale proceeds for
such exports.

2. Rule 96A of CGST Rules, 2017 provides for export of goods/services under LUT or bond. It
was inserted in CGST Rules pursuant to the recommendation of the Committee on Exports to extend
the facility of supplying goods or services for export without payment of integrated tax under Letter
of Undertaking, to all registered persons, subject to certain conditions and safeguards. Rule 96A of
CGST Rules is reproduced below:
“96A. Export of goods or services under bond or Letter of Undertaking
1) Any registered person availing the option to supply goods or services for export
without payment of integrated tax shall furnish, prior to export, a bond or a Letter of
Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself
to pay the tax due along with the interest specified under sub-section (1) of section 50
within a period of—

a) fifteen days after the expiry of three months, or such further period as may be allowed
by the Commissioner, from the date of issue of the invoice for export, if the goods are not
exported out of India; or

b) fifteen days after the expiry of one year, or such further period as may be allowed by
the Commissioner, from the date of issue of the invoice for export, if the payment of such
services is not received by the exporter in convertible foreign exchange or in Indian
rupees, wherever permitted by the Reserve Bank of India.”
2.1 Accordingly, as per clause (b) of rule 96A (1) of CGST Rules, in case of export of services
without payment of Integrated Tax under Letter of Undertaking, if the payment for such supply of
services is not received by the exporter in convertible foreign exchange or in Indian rupees, wherever
permitted by the Reserve Bank of India, then the said exporter is required to pay the due Integrated
Tax alongwith interest on expiry of 15 days beyond one year from the date of issue of the invoice for
export. However, the said period can be extended by the Commissioner, on request made by the
exporter on case to case basis.

2.2 It has been represented that RBI’s Master Directions provide for extension of time for
realization of export proceeds/ foreign remittances and accordingly, fixing a timelimit of one year and
fifteen days for receiving remittances for export of services or for seeking specific permission of
Commissioner for extension of such time, even in cases where such extension of time for realization
of export proceeds/ foreign remittances has already been granted as per RBI’s Master Directions, is
not only contrary to RBI’s Master Directions but is also adding to the compliance burden. The Master
Directions (FED Master Direction No. 16/2015-16) of RBI on export of goods and services (updated
as on 22.11.2022)) for extension of time in respect of foreign remittance corresponding to exports are
as follows:
“C.20 Extension of time
Agenda for 53rd GSTCM Volume 1
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(i) The Reserve Bank of India has permitted the AD Category – I banks to extend the period of
realization of export proceeds beyond stipulated period of realization from the date of export,
up to a period of six months, at a time, irrespective of the invoice value of the export subject
to the following conditions:
a) The export transactions covered by the invoices are not under investigation by
Directorate of Enforcement / Central Bureau of Investigation or other investigating
agencies,
b) The AD Category – I bank is satisfied that the exporter has not been able to realize
export proceeds for reasons beyond his control,
c) The exporter submits a declaration that the export proceeds will be realized during the
extended period,
d) While considering extension beyond one year from the date of export, the total
outstanding of the exporter does not exceed USD one million or 10 per cent of the
average export realizations during the preceding three financial years, whichever is
higher.
e) In cases where the exporter has filed suits abroad against the buyer, extension may be
granted irrespective of the amount involved / outstanding.
(ii) Cases which are not covered by the above instructions would require prior approval from
the concerned Regional Office of the Reserve Bank.

(iii) Reporting should be done in EDPMS.”

2.3 It is also relevant to note that rule 96B of CGST Rules, which provides for recovery of refund
in respect of export of goods on non realization of export proceeds, also incorporates the provisions
regarding extension of time limit provided by RBI in respect of realization of foreign exchange. The
said rule is reproduced as below:
“96B. Recovery of refund of unutilised input tax credit or integrated tax paid on export of
goods where export proceeds not realised. –
(1) Where any refund of unutilised input tax credit on account of export of goods or of
integrated tax paid on export of goods has been paid to an applicant but the sale proceeds in
respect of such export goods have not been realised, in full or in part, in India within the
period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999),
including any extension of such period, the person to whom the refund has been made shall
deposit the amount so refunded, to the extent of non-realisation of sale proceeds, along with
applicable interest within thirty days of the expiry of the said period or, as the case may be,
the extended period, failing which the amount refunded shall be recovered in accordance
with the provisions of section 73 or 74 of the Act, as the case may be, as is applicable for
recovery of erroneous refund, along with interest under section 50.
Provided that where sale proceeds, or any part thereof, in respect of such export goods are
not realised by the applicant within the period allowed under the Foreign Exchange
Management Act, 1999 (42 of 1999), but the Reserve Bank of India writes off the
requirement of realisation of sale proceeds on merits, the refund paid to the applicant shall
not be recovered.
(2) Where the sale proceeds are realised by the applicant, in full or part, after the amount of
refund has been recovered from him under sub-rule (1) and the applicant produces evidence
about such realisation within a period of three months from the date of realisation of sale
Agenda for 53rd GSTCM Volume 1
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proceeds, the amount so recovered shall be refunded by the proper officer, to the applicant to
the extent of realisation of sale proceeds, provided the sale proceeds have been realised
within such extended period as permitted by the Reserve Bank of India.”

3. The matter has been examined. In this regard, it is submitted that in cases of export of
services, where the extension of time for realization of export proceeds/ foreign remittances has been
permitted as per Master Directions of the RBI, there may not be any further requirement of seeking
extension of timelines from the Commissioner as it only adds to compliance burden and is against the
principles of ease of doing business.

3.2 In addition, it is also mentioned that rule 96B of CGST Rules already takes into account any
extension of time as permitted by RBI for receiving export remittances. Accordingly, it is proposed to
align rule 96A (1)(b) with rule 96B as well as the Master Directions of RBI so that the tax due is
required to be paid on export of services under LUT, alongwith interest, only when export proceeds/
foreign remittances are not realized within the time period allowed under the Foreign Exchange
Management Act, 1999 (42 of 1999), including any extension of time granted as per RBI’s Master
Directions.

4. Proposal for amendment: In light of the discussions held in the preceding paras, it is
proposed that rule 96A may be amended (in red) as follows:
“96A. Export of goods or services under bond or Letter of Undertaking
1) Any registered person availing the option to supply goods or services for export
without payment of integrated tax shall furnish, prior to export, a bond or a Letter of
Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself
to pay the tax due along with the interest specified under sub-section (1) of section 50
within a period of—

a) fifteen days after the expiry of three months, or such further period as may be allowed
by the Commissioner, from the date of issue of the invoice for export, if the goods are not
exported out of India; or

b) fifteen days after the expiry of one year, or the period as allowed under the Foreign
Exchange Management Act, 1999 (42 of 1999) including any extension of such period as
permitted by the Reserve Bank of India, whichever is later, from the date of issue of the
invoice for export, or such further period as may be allowed by the Commissioner, from
the date of issue of the invoice for export, if the payment of such services is not received
by the exporter in convertible foreign exchange or in Indian rupees, wherever permitted
by the Reserve Bank of India.”

5. The matter was deliberated by the Law Committee in its meeting held on 16.05.2024 wherein
the Law Committee recommended to amend rule 96A of CGST Rules, as proposed in Para 4 above.
6. The agenda note is placed before the GST Council for deliberation and approval.
Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxxvi): Change in due date for filing of return in FORM GSTR-4 for
composition taxpayers from 30th April to 30th June.

Representations have been received from trade and industry to extend the time limit to furnish
FORM GSTR-4, i.e. the return required to be filed by a registered person who opts to pay tax under
composition levy.

2. As per sub-section (2) of section 39 of CGST Act, 2017 read with sub-rule (1) of rule 62 of
CGST Rules, 2017, a registered person opting to pay tax under composition scheme as per section 10
of CGST Act, is required to furnish return in FORM GSTR-4 for every financial year, by 30th April
following the end of such financial year. The said provisions are reproduced below:

Section 39.

(2) A registered person paying tax under the provisions of section 10, shall, for each financial
year or part thereof, furnish a return, electronically, of turnover in the State or Union territory,
inward supplies of goods or services or both, tax payable, tax paid and such other particulars in
such form and manner, and within such time, as may be prescribed.
…

Rule 62. Form and manner of submission of statement and return. –

(1) Every registered person paying tax under section 10 shall-
(i) furnish a statement, every quarter or, as the case may be, part thereof, containing the
details of payment of self-assessed tax in FORM GST CMP-08, till the 18th day of the
month succeeding such quarter; and

(ii) furnish a return for every financial year or, as the case may be, part thereof in
FORM GSTR-4, till the thirtieth day of April following the end of such financial year,
electronically through the common portal, either directly or through a Facilitation
Centre notified by the Commissioner.
…
3. It is to be mentioned that FORM GSTR-4 is the return to be filed by the taxpayers under
composition levy, who are typically small taxpayers, after completion of a financial year. The
self-assessed tax liability is discharged by such taxpayers on quarterly basis through FORM GST
CMP-08, as per provisions of clause (i) of sub-rule (1) of Rule 62 of CGST Rules. Further,
whereas, the due date to furnish annual return in FORM GSTR-9 by registered taxpayers other
than those under composition levy, has been kept as 31st December following the end of financial
year to which such return pertains, the due date for FORM GSTR-4 is 30th April of the following
year, i.e. much before the due date for FORM GSTR-9, although both are the returns for a
financial year.
4. Therefore, Law committee in its meeting held on 30.05.2024 recommended that the due date of
filing of FORM GSTR-4 be extended to 30th June following the end of the financial year to which it
Agenda for 53rd GSTCM Volume 1
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may pertain. Further, it recommended that the said extension be made applicable in respect of FORM
GSTR-4 to be filed for the financial year 2024-25 onwards. The same would require amendment of
clause (ii) of sub-rule (1) of Rule 62 of CGST Rules and Instructions of the FORM GSTR-4, as
below, to be made effective after 30th June 2024.

a) amendment of clause (ii) of sub-rule (1) of Rule 62 of CGST Rules:
(ii) furnish a return for every financial year or, as the case may be, part thereof in
FORM GSTR-4, till the thirtieth day of April June following the end of such financial
year, electronically through the common portal, either directly or through a Facilitation
Centre notified by the Commissioner.

b) amendment in Sr. No. 2 of the Instructions in the FORM GSTR-4:

2. The details in FORM GSTR-4, for every financial year or part thereof, should
be furnished till the thirtieth day of april following the end of such financial year for the
financial year upto FY 2023-24.
Further, the details in FORM GSTR-4, for every financial year or part thereof, should be
furnished till the thirtieth day of June following the end of such financial year for the
financial year 2024-25 onwards.

5. Accordingly, the agenda is placed up before GST Council for approval.

Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxxvii): Amendment in FORM GSTR -8 to capture place of supply.
It has been represented by some tax authorities that extant FORM GSTR-8, i.e. statement to
be furnished by an electronic commerce operator (ECO) required to collect tax at source under section
52, does not capture place of supply details in respect of the supplies effected through such ECO, due
to which it is difficult for the tax authorities to verify whether the suppliers have correctly reported the
place of supply in their FORM GSTR-1 and correctly paid tax in FORM GSTR-3B.
2. The matter has been examined. As per section 52 (4) of CGST Act, read with Rule 67 of
CGST Rules, every ECO is required to collect tax at source under section 52 is required to furnish a
statement in FORM GSTR-8, containing details of supplies effected through such operator and the
amount of tax collected by him in terms of section 52(1) of CGST Act. The relevant extract of the
said provisions are reproduced below:
Section 52. Collection of tax at source.-
….
(4) Every operator who collects the amount specified in sub-section (1) shall furnish a
statement, electronically, containing the details of outward supplies of goods or services or
both effected through it, including the supplies of goods or services or both returned through
it, and the amount collected under sub-section (1) during a month, in such form and manner
as may be prescribed, within ten days after the end of such month:
Provided that the Commissioner may, for reasons to be recorded in writing, by notification,
extend the time limit for furnishing the statement for such class of registered persons as may
be specified therein:
Provided further that any extension of time limit notified by the Commissioner of State tax or
the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.
…
Rule 67. Form and manner of submission of statement of supplies through an e-commerce
operator .-
(1) Every electronic commerce operator required to collect tax at source under
section 52 shall furnish a statement in FORM GSTR-8 electronically on the common portal,
either directly or from a Facilitation Centre notified by the Commissioner, containing details
of supplies effected through such operator and the amount of tax collected as required under
sub-section (1) of section 52.
(2) The details of tax collected at source under sub-section (1) of section 52 furnished
by the operator under sub-rule (1) shall be made available electronically to each of the
registered suppliers on the common portal after filing of FORM GSTR-8 for claiming the
amount of tax collected in his electronic cash ledger after validation
3. From a perusal of the FORM GSTR-8, it is seen that the extant format of FORM GSTR-8
does not capture place of supply details in respect of the supplies which are made though the e-
commerce operator, which makes it difficult for tax authorities to cross verify whether the suppliers of
such supplies have correctly reported the place of supply details in their FORM GSTR-1 and correctly
Agenda for 53rd GSTCM Volume 1
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paid their tax liabilities in FORM GSTR-3B. In view of the same, Law committee in its meeting held
on 16.05.2024 and 07.06.2024 recommended that FORM GSTR-8 may be suitably amended to
incorporate place of supply details in Table 3 and Table 4 of the said form, as below:.
3. Details of supplies made through e-commerce operator
(Amount in Rs. for all Tables)
GSTIN of
the
supplier
Details of supplies made which
attract TCS
Amount of tax collected at source Place of
Supply (POS)
Gross
value of
supplies
made
Value of
supplies
returned
Net
amount
liable for
TCS
Integrated
Tax
Central
Tax
State /UT Tax
1 2 3 4 5 6 7 8
3A. Supplies made to registered persons



4. Amendments to details of supplies in respect of any earlier statement
Original details Revised details
Month GSTIN of
supplier
GSTIN of
supplier
Details of supplies made
which attract TCS
Amount of tax collected at
source
Place of
Supply
(POS) Gross
value of
supplies
made
Value of
supply
returned
Net
amount
liable
for TCS
Integrated
Tax
Central
Tax
State/UT
Tax
1 2 3 4 5 6 7 8 9 10
4A. Supplies made to registered persons

4B. Supplies made to unregistered persons


The draft Notification to revise FORM GSTR-8 is attached as Annexure A to this agenda.
4. Accordingly, the agenda is placed before GST Council for its approval.


Agenda for 53rd GSTCM Volume 1
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Annexure A
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs

Notification
No. XX/2024 – Central Tax
New Delhi, the xxxxxx, 2024
G.S.R…(E).- In exercise of the powers conferred by section 164 of the Central Goods and Services
Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby
makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:
—
1. Short title and commencement. -(1) These rules may be called the Central Goods and Services
Tax (Second Amendment) Rules, 2024.
(2) Save as otherwise provided in these rules, they shall come into force on the date of their
publication in the Official Gazette.
2. In the Central Goods and Services Tax Rules, 2017, in FORM GSTR-8,–
(i) for serial number 3, the following shall be substituted, namely:-
“3. Details of supplies made through e-commerce operator
(Amount in Rs. for all Tables)
GSTIN of
the
supplier
Details of supplies made which
attract TCS
Amount of tax collected at source Place of
Supply (POS)
Gross
value of
supplies
made
Value of
supplies
returned
Net
amount
liable for
TCS
Integrated
Tax
Central
Tax
State /UT Tax
1 2 3 4 5 6 7 8
3A. Supplies made to registered persons

3B. Supplies made to unregistered persons
”;
(ii) for serial number 4, the following shall be substituted, namely:-



Agenda for 53rd GSTCM Volume 1
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“4. Amendments to details of supplies in respect of any earlier statement
Original details Revised details
Month GSTIN of
supplier
GSTIN of
supplier
Details of supplies made
which attract TCS
Amount of tax collected at
source
Place of
Supply
(POS) Gross
value of
supplies
made
Value of
supply
returned
Net
amount
liable
for TCS
Integrated
Tax
Central
Tax
State/UT
Tax
1 2 3 4 5 6 7 8 9 10
4A. Supplies made to registered persons

4B. Supplies made to unregistered persons
”;
[F. No. CBIC-20013/7/2024-GST]



(Raghavendra Pal Singh)
Director
Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June, 2017, published vide
number G.S.R. 610(E), dated the 19th June, 2017 and were last amended, vide notification No.
52/2023 -Central Tax, dated the 26th October 2023, vide number G.S.R. 798 (E), dated the 26th
October 2023.




Agenda for 53rd GSTCM Volume 1
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Agenda Item 3(xxxviii): Amendment in GST Rules and FORM GSTR-1 to reduce the current
threshold of invoice value of Rs. 2.5 lakhs for inter-state B2C supplies to Rs. 1 lakh.
As per section 37 of CGST Act, 2017, read with rule 59 of CGST Rules, 2017, a statement of
outward supplies has to be furnished by a registered person for a tax period in FORM GSTR-1. While
in respect of B2B supplies, invoice-wise details are required to be furnished in FORM GSTR-1,
however, in respect of B2C supplies, invoice-wise details are required to be furnished in Table 5 in
respect of inter-State supplies with invoice value more than Rs 2.5 Lakh only, whereas for other B2C
supplies, only consolidated details are required to be furnished in Table 7 thereof.

2. It has been represented by some tax administrations that this threshold of invoice value for
declaration of invoice-wise details of intra-State supplies may be reduced from Rs. 2,50,000/- now to
facilitate availability of more information to the tax administrations for verification of correct
reporting of B2C supplies by the suppliers, thus improving tax compliance, as well as to enable the
consumption states to cross-verify the IGST settlement made to them.
3. It is mentioned that clause (e) of Rule 46 of CGST Rules mandates that in respect of
supplies made to unregistered persons, where the value of supply is fifty thousand rupees or more, the
name and address of the recipient and the address of delivery, along with the name of the State and its
code are required to be captured in the invoice. The said clause is reproduced below:
Rule 46. Tax invoice.- Subject to rule 54, a tax invoice referred to in section 31 shall be issued by
the registered person containing the following particulars, namely,-
..
(e) name and address of the recipient and the address of delivery, along with the name of the
State and its code, if such recipient is un-registered and where the value of the taxable supply
is fifty thousand rupees or more;
..
…
4. Law Committee deliberated on the issue in its meeting held on 16.05.2024. The law
Committee observed that as per rule 46(e) of CGST Rules, a tax invoice of taxable value of Rs.
50,000/- or more, issued to a unregistered person, is required to capture the address of the recipient.
Accordingly, there may not be any difficulty for the registered person for furnishing invoice-wise
details in respect of B2C inter-State supplies of value of Rs 50,000 or more in FORM GSTR-1.
However, lowering the threshold value from Rs 2.5 Lakh to Rs 50,000 for reporting invoice-wise
details for inter-State B2C supplies, may increase the compliance burden on the taxpayers
substantially, and accordingly, Law committee recommended that the said threshold value may be
lowered in a phased manner. Law Committee recommended that initially, the said threshold value
may be reduced from the present Rs. 2,50,000/- to Rs. 1,00,000/-.
Agenda for 53rd GSTCM Volume 1
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5. Law Committee also recommended that clause (a)(ii) and (b)(ii) of sub-rule (4) of rule 59 of
CGST Rules , which pertains to the threshold value in respect of Inter-state B2C supplies for which
invoice wise details are required to be furnished in FORM GSTR-1, may be amended as follows:
Rule 59. Form and manner of furnishing details of outward supplies.-
…
(4) The details of outward supplies of goods or services or both furnished in FORM GSTR-1
shall include the-
(a) invoice wise details of all -
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than one lakh rupees two and a half
lakh rupees made to the unregistered persons;
(b) consolidated details of all -
(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto one lakh rupees two and a
half lakh rupees made to unregistered persons for each rate of tax;
(c) debit and credit notes, if any, issued during the month for invoices issued previously.
…
6. Law Committee further recommended that Table 5 and 7 of FORM GSTR -1 and the
instructions in column 3, against Sr. No. 3. of Table specific instructions may also be suitably
amended.
7. It is also mentioned that return in FORM GSTR-5, to be furnished by a Non-resident taxable
person under section 39(5) of CGST Act read with rule 63 of CGST Rules, and the relevant
instructions, may also be suitably amended so as to reduce the current threshold of invoice value of
Rs. 2.5 lakhs for inter-state B2C supplies to Rs. 1 lakh, in line with the changes proposed in the
FORM GSTR 1.
7.1 Accordingly, Law Committee, in its meeting held on 07.06.2024 recommended that
amendment may be made in Table 6 and Table 7 of FORM GSTR-5 and Instruction No. 7(ii), 8(ii)
and 9 in the said return, so as to reduce the current threshold of invoice value for reporting invoice-
wise details for B2C inter-State supplies from Rs. 2.5 lakhs to Rs. 1 lakh.

8. The agenda is placed before GST Council for approval.



Agenda for 53rd GSTCM Volume 1
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Confidential


Agenda for
53rd GST Council Meeting
22nd June, 2024
Volume-II






Agenda for 53rd GSTCM Volume 2
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Agenda for 53rd GSTCM Volume 2
Page 3 of 189
GST Council Secretariat New Delhi
5th Floor, Tower-II, Jeevan Bharti Building, New Delhi
13th June, 2024

OFFICE MEMORANDUM
Subject: Notice for the 53rd GST Council Meeting to be held on 22nd June, 2024-reg

The undersigned is directed to refer to the above subject and to convey that the 53rd Meeting
of the GST Council will be held on 22nd June, 2024 at New Delhi. The schedule of the
meeting is as follows:-
Saturday, 22nd June, 2024 from 2.00 P.M. onwards
2. In addition, an Officers’ Meeting will be held on 21st June, 2024 at New Delhi as per the
following schedule:
Friday, 21st June, 2024 from 11.30 A.M. onwards

3. The venue of the meeting, agenda items and other details for the 53rd 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
53rd 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
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Agenda for 53rd GSTCM Volume 2
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TABLE OF CONTENTS (VOLUME-II)



Sl. No. Agenda Item Page No.
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 (17 issues)
– Annexure-I
7-30
b) Issues where no change has been proposed by the Fitment Committee in
relation to goods (3 issues) – Annexure-II
31-34
c) Issue in relation to goods placed before the Council for information (1
issue) – Annexure-III
35-36
d) Recommendations made by the Fitment Committee for making changes
in GST rates or for issuing clarifications in relation to services (9
issues) – Annexure-IV
37-61
e) Issues where no change has been proposed by the Fitment Committee in
relation to services (1 issue)– Annexure-V
62-64
5.
Issues recommended by GSTN
a) All India roll-out of the Biometric-based Aadhaar Authentication and
Document Verification System
65-66
b) Waiver of Interest on delayed receipt of Advance User Charges (AUC)
from a few states and CBIC.
67-73
6. Recommendations of the 20th meeting of the IT Grievance Redressal
Committee for approval/decision of the GST Council
74-179
7. Review of revenue position under Goods and Services Tax. 180-189
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Discussion on Agenda Items

Agenda Item 4: Issues recommendations by the Fitment Committee for the consideration
of the GST Council:

This agenda item deals with proposals regarding GST rates on supply of goods and
services. The proposed changes in GST rates emanate from the recommendations made by the
Fitment Committee.
2. Briefly stated, representations/recommendations have been received from various
stakeholders including Ministries and other offices of Centre and States, seeking changes in GST
rates and certain clarifications regarding GST rates applicable on supply of certain goods/services.
3. Meetings of Fitment Committee were held on 27th October 2023, 9th November 2023, 29th
November 2023, 15th December 2023, 28th December 2023, 5th January 2024, 18th January 2024,
30th January 2024, 8th February 2024, 29th February 2024, 4th April 2024, 17th May 2024, 31st May
2024 and 14th June, 2024 to deliberate on the issues referred by industry, line ministries, State
governments and other bodies for issuance of clarifications, granting exemptions or making changes
in GST rates on goods and services. The Fitment Committee discussed these issues in detail and has
made recommendations on the same. Further, one issue is being kept before the Council for
information.
4. Accordingly, Fitment Agenda for consideration of the GST Council is summarized as
below:
a. Recommendations made by the Fitment Committee for making changes in GST rates
or for issuing clarifications in relation to goods – Annexure-I
b. Issues where no change has been proposed by the Fitment Committee in relation to
goods – Annexure-II
c. Issue in relation to goods placed before the Council for information– Annexure-III
d. Recommendations made by the Fitment Committee for making changes in GST rates
or for issuing clarifications in relation to services – Annexure-IV
e. Issues where no change has been proposed by the Fitment Committee in relation to
services – Annexure-V

5. The proposals, as contained in para 4 above are placed before the GST Council for
consideration.

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a) Recommendations made by the Fitment Committee for making changes in GST rates or for
issuing clarifications in relation to goods

Annexure – I

S.
No
.
Descriptio
n of Goods
/HSN
Present
Rate
Requested
Rate
Comments
1. Compensat
ion Cess on
goods
imported
by a SEZ
unit or SEZ
developer
for
authorised
operations.


As
applicab
le
Exemption
with effect
from 1st July,
2017
 Prior to GST, all imports by SEZ units or a SEZ
developer for authorized operations were exempt
from basic customs duty (BCD), CVD in lieu of
Central Excise duty and Special Additional duty
(SAD) to facilitate export competitiveness of such
units keeping in view that such units are expected to
export the resultant final goods.
 At the time of roll out of GST, exemptions with
respect to IGST leviable on the such imports were
continued vide 64/2017-Customs based
recommendation of GST Council. The present issue
has arisen as no such notification was issued for
continuation of exemption from Compensation Cess
leviable on such imports.
 Since all pre-GST exemptions were continued at the
time of roll out of GST, the intent appears to be to
continue exemption from Compensation Cess on
import of goods to SEZ, but the exemption from
compensation cess was not notified.
 The request is to exempt the Compensation Cess
leviable on the imports into SEZ retrospectively
from 1st July, 2017
 Dept of Commerce (DoC) informed that as per
declared data for 1st July, 2017 to January, 2024,
123 units/ developer/co-developers filed
transactions with HSN attracting ₹ 6848 Cr
Compensation Cess. Out of which Compensation
Cess to the tune of ₹ 2511.46 Cr on the goods
imported from abroad into SEZ has been paid.
Agenda for 53rd GSTCM Volume 2
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 Fitment Committee deliberated this issue in detail
and recommended to provide:
o exemption from Compensation Cess
leviable on the imports by SEZ
Unit/developer for authorised operations
prospectively from the date of issue of
Notification.
o retrospective exemption also for the period
from 1st July, 2017 till the date of
notification referred above.
2. Extension
of validity
of IGST
exemption
at the time
of imports
under
notification
No.
19/2019-
Customs
dated
06.07.2019
18/28% Nil  Vide Notification 19/2019-Customs dated
06.07.2019, exemption from BCD and IGST was
provided on imports of specified defence items for
defence forces (Airforce, Navy and Army) for a
period of five years. This exemption is lapsing on
30.06.2024.
 Considering that these items are not indigenously
manufactured and have to be necessarily imported
by the armed forces for operational readiness and
strategic importance, the M/o Defence has sought
for extension of the aforementioned exemption.
 The revenue implication is not quantifiable.
 Fitment Committee recommended extension of
IGST exemption for another 5 years.
3. Aircraft
parts/comp
onents
mentioned
in aircraft
maintenanc
e manuals
for use in
aircraft
mentioned
irrespective
of their
18/28% 5%  The Committee of Secretaries (CoS) on facilitating
growth of Aircraft MROs in India, has
recommended harmonizing GST rate at a
maximum of 5% on aircraft parts/components
mentioned in the various manuals of aircraft
maintenance.
 Presently, aircraft parts classified under HSN 8807
attract GST at 5% (Sl. No. 245 of Sch I to Notfn
01/2017-CTR). Some other parts like aircraft
engines classifiable under Chapter 8407 1000 and
8411, aircraft tyres classifiable under Chapter 40
also attract GST at 5% (refer Sl. No. 230A and 189
Agenda for 53rd GSTCM Volume 2
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classificati
on in any
chapter.
respectively of Sch I in 1/2017-CTR)
 However, there are other parts used in aircraft
classifiable under chapters 84, 85 etc. that attract
GST ranging from 18%-28%. Examples of such
parts include transducers, radars, aircraft pantry
equipment like coffee machines etc.
 Further, ‘Parts, testing equipment, tools and tool-
kits for MRO activities for aircrafts’ attract ‘Nil’
BCD when imported by MRO operators registered
with the DGCA. This exemption from BCD is
available on all parts and equipment falling under
any chapter. However, IGST is payable on such
imports at the applicable rate as mentioned above.
 The domestic MRO industry has stated that the
domestic manufacturing capability for such parts is
non-existent and consequently they are all
imported. At the time of import of these parts, the
IGST is applicable at 18%-28%. This becomes
imputed cost for the MROs, which is passed on to
its consumers thereby making them uncompetitive
vis-à-vis established international MRO hubs like
Turkey, Singapore etc.
 The issue of uniform 5% on aircrafts parts under
any chapter was placed before the Council in its
47th and 50th Meeting. However, considering the
dual use nature of such parts, the Council did not
recommend any change.
 However, in the CoS as well as follow up meetings
with the M/o Civil Aviation, it has been ascertained
that the Country is 100% import dependent of all
such parts.
 Ministry of Civil Aviation has clarified that only
parts which feature in the following manuals can be
considered for 5% GST rate which will translate to
5% IGST for import of these parts:
i. aircraft maintenance manual
(AMM),
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ii. component maintenance manual
(CMM),
iii. Illustrated Parts Catalogue (IPCL),
iv. Structural Repair Manual (SRM)
and
v. the Standard Procedures Manual
(SPM) of the OEMs
 Further, MoCA has also clarified that the existing
conditions applicable for Nil customs duty should
be made applicable to import of such aircraft parts
for 5% GST rate.
 The conditions in the customs Notification no
50/2017-Customs dated 30.06.2017 (Sl. No. 536)
reads as below:
‘If,-
(A) imported by units approved by Director
General of Civil Aviation in the Ministry of Civil
Aviation, for maintenance, repair, or overhauling
of-
(a) aircraft registered in India; or
(b)aircraft not registered in India, which are
brought into India for the purpose of flight
to or across India, or for the purpose of
maintenance, repair or overhauling and
which are intended to be removed from
India within six months or for such periods
as extended by the Director General of
Civil Aviation, as the case may be; or
(c) aircraft components or parts, including
engines of aircrafts;
(B) the importer submits documents duly certified
by the Director General of Civil Aviation approved
Quality Managers of aircraft maintenance
organisations indicating such parts, testing
equipment, tools and tool-kits;
(C) the importer maintains a proper account of
import, use and consumption of the specified goods
Agenda for 53rd GSTCM Volume 2
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imported for the purpose of servicing, repair and
maintenance of aircrafts, aircraft components,
parts including engines of aircrafts and submits
such account periodically to the Commissioner of
Customs in such manner as may be specified by the
said Commissioner;
(D) the importer, by the execution of bond, in such
form and for such sum as may be specified by the
said Commissioner, binds himself to pay on demand
an amount equal to the duty leviable,-
(i) on parts, tools and tool kits as are not
proved to the satisfaction of the said
Commissioner to have been used or
consumed for the aforesaid purpose;
(ii) on the testing equipment, as are not
proved to the satisfaction of the said
Commissioner to have been installed or
otherwise used for the aforesaid purposes,
within a period of three years from the date of
importation thereof or within such extended period
as that Commissioner, on being satisfied that there
is sufficient cause for not installing, using or
consuming as the case may be, for the aforesaid
purposes within the said period, allow.’
 Fitment Committee recommended a uniform rate of
5% IGST for imports of these parts/components
irrespective of their classification subject to
conditions similar to Customs Notification.
4




Scientific
Equipment
required
for
Research
Moored
Array for
African-
18% Nil  The Ministry of Earth Sciences (MoES) has stated
that the National Institute of Ocean Technology
(NIOT) is a Scientific and Research Organization
under Ministry of Earth Sciences (MoES), which
provides information on weather, cyclone and
Tsunamis for India as well as to global community.
 MoES and National Oceanic and Atmospheric
Administration (NOAA), USA entered into an MoU
Agenda for 53rd GSTCM Volume 2
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.
Asian-
Australian
Monsoon
Analysis
and
Prediction
(RAMA)
programme
.
for Technical Co-operation in Earth Observation
and Earth Sciences. The present Implementing
Arrangement (IA) between NOAA & MoES was
signed on 06/08/2021 and is valid for duration of
five years i.e. till July 2026.
 Under the RAMA programme, research buoys are
sent to India for storing and basic maintenance
activity and are subsequently deployed in the
International waters in the Indian Ocean region and
Bay of Bengal region for data collection. Further,
post deployment period, the buoys are re-exported
to NOAA (USA) after maintenance, for re-
calibration for re-import for next round. This whole
cycle takes around 16-24 months.
 Notification No. 47/2017-Integrated Tax (Rate)
dated 14.11.2017 prescribed a concessional IGST
rate of 5% on equipment supplied to specified
institutions related to scientific research and
notification No. 51/96-Customs prescribed a
concessional IGST rate of 5% on such equipment at
the time of import. Imports under the RAMA
programme were availing benefits of these
exemptions.
 On the basis of recommendations of the GoM on
Rate Rationalization, which were accepted by the
GST Council in its 47th Meeting, the exemption to
scientific and technical instruments supplied to
public funded research institutes was withdrawn.
 Accordingly, notification No. 47/2017-Integrated
Tax (Rate) were rescinded and also the
corresponding customs notification No. 51/96-
Custom was amended vide notification No.
42/2022-Customs dated 13.07.2022.
 Consequently, the research buoys and moorings
now attract 18% GST, which is being borne by the
NOAA.
 The issue was deliberated in the meeting and
Agenda for 53rd GSTCM Volume 2
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Fitment Committee recommended to extend GST
exemption to research equipment/buoys imported
under the RAMA programme for a period of 3
years i.e. till July 2026 as recommended by the
MoES subject to the condition that such imports are
certified Ministry of Earth Sciences and that such
goods are re-exported within 2 years, extendable to
further period of 1 year. If the imported goods are
not exported back in stipulated time, importer will
pay tax/duty along with interest.
5. Technical
documentat
ion related
to AK-203
rifle kits.
(HSN
4911)


18% Ad-hoc
Exemption
from import
IGST
 Ministry of Defence (MoD) requested for
exemption of duty in terms of section 25(2) of the
Customs Act, 1962 on imports of technical
documentation related to AK-203 rifles by the Indo-
Russian Rifles Pvt Ltd. (IRRPL), which is a JV
under the Inter-Governmental Agreement between
India and Russia for manufacturing AK-203 rifles
exclusively for Indian Defence forces.
 IRRPL had imported two consignments of AK-203
rifle kits under notification 19/2019-Customs
covered by Bill of Entry dated 19.11.2022 and
26.02.2023. However, the scope of the said
notification did not cover technical documentation
under chapter 49. Consequently, a notice was issued
for recovery of applicable duties at the time of
import of such kits.
 On the request of Ministry of Defence, ad-hoc
exemption order under Section 25(2) of the
Customs Act, 1962 from the basic customs duty for
these consignments has been issued vide Ad-hoc
Exemption Order No. 01/2024 dated 01.02.2024.
 The matter has been referred for recommendation
of the Council for providing ad-hoc IGST
exemption on these imports.
 The value of imports of such technical
documentation is Rs 177 Cr. Thus, the revenue
Agenda for 53rd GSTCM Volume 2
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implication of the requested IGST exemption is Rs.
31 Cr. approx.
 Fitment Committee after considering request from
Defence Ministry, recommended to provide ad-hoc
IGST exemption on the said imports.
6. Carton
Boxes for
packaging
apples and
other
horticulture
produce.
18% 12%/5%  Carton boxes fall under HSN heading 4819.
 Before 01.10.21, items falling under HSN 4819 like
cartons, boxes and cases of non-corrugated paper or
paper board attracted a GST rate of 18% and
cartons, boxes and cases of corrugated paper or
paper board attracted a concessional GST rate of
12%.
 The matter in respect to the GST rates on the items
falling under HSN 4819 was placed before the GST
Council in its 45th meeting held in September,
2021. The Council recommended that all items
falling under HSN 4819, irrespective of being
corrugated or non-corrugated, shall attract a
uniform GST rate of 18%. This change was made
effective from 1st October, 2021.
 The matter was again raised in 49th GSTC meeting
by Himachal Pradesh (HP). The matter was
examined by Fitment Committee and status quo
was recommended in 50th GSTC. The matter was
deliberated in 50th GSTC where HP and J&K
requested for reducing the rate as these are used for
packaging of apples and horticulture products.
 Representatives from Himachal Pradesh and J &K
were invited in the Fitment Committee meeting for
presenting their view, wherein it is informed by
Himachal that the apple has contributed to the tune
of Rs 4500 Cr to state’s economy amounting to
13% of SGDP. The prices of cartons have gone up
to the tune of 15.4% to 10.1% in May 2022 as
compared to May 2021 mainly due to hike in GST
from 12% to 18% and it was requested that GST
Agenda for 53rd GSTCM Volume 2
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rate of specified apple carton boxes be reduced to
5%.
 Jammu & Kashmir highlighted that Horticulture
contributes 8% of SGDP and around 27% of
population is dependent on the sector. Around 75%-
80% of apples are packed in corrugated boxes. GST
rate hike in 2021 has led to increase in prices of
apple carton boxes by 10%-15%. A differentiation
in tax rate based on end-use would lead to
confusion, litigation. A lower rate of 5% would
introduce inversion as the inputs (paper products)
also attracts GST of 12%. Thus, a uniform lower
rate of 12% on all corrugated boxes may be
considered.
 Cartons/boxes either corrugated or non-corrugated
are intermediate products which are used by the
manufacturer/trader to transport or deliver the
commodity. Thus, the recipient of the boxes has an
option to utilise ITC on tax paid on the cartons to
set-off final tax liability.
 Further, as the carton/box is naturally bundled with
the final commodity, it becomes composite supply
and the tax liability is that of principal supply is
applicable. In case the principal supply attracts Nil
rate, or the supplier of principal supply is
unregistered, then the GST paid on carton becomes
a cost to the supplier. In the instant case, the
principal supply is of apples which attracts Nil rate
[Sl.No. 55 of 2/17-CT(R)] and there are no other
taxable supplies to be made by apple farmers. Thus,
the GST paid on cartons becomes cost to the apple
farmer. However, agro sector would be around 10%
of total user.
 Other uses of carton boxes are in FMCG sector,
healthcare/pharma. E-commerce supplies, industrial
packaging, pharmaceuticals, electronics and
processed. This constitutes around 90 % of total
Agenda for 53rd GSTCM Volume 2
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turnover of carton boxes. And, in these end-uses the
tax will be utilised as ITC by such end-users.
 If, the tax is reduced to 12% then the loss to
exchequer will be in case where the cartons are sold
to horticulture sector. In other cases, the reduced
tax would be used as ITC.
 A further reduction to 5% would introduce
inversion in the value chain.
 Providing end-use based or specification based
differentiation of rate are not advisable as they are
difficult to administer, prone to litigation.
 Fitment Committee deliberated this issue in detail
and recommended a uniform GST rate of 12 % on
carton, boxes and cases of corrugated paper or
paper-board as well as of non -corrugated paper or
paper -board falling under heading 4819 10 and
4819 20 respectively.
7. Fire water
sprinklers
(HSN
8424)


- Request is
to clarify
that fire
sprinklers
are also
covered
under entry
195B.
 All Sprinklers are classified under CTH 8424.
 Entry 195 B of Schedule-II (12%) of Notification
01/2017-CTR reads as follows:
“Sprinklers; drip irrigation system including
laterals; mechanical sprayers”.
 This entry was inserted vide Notification No.
6/2018-Central Tax (Rate) dated 25.01.2018 based
on recommendation of GST Council in its 25th
meeting held on 18.01.2018 accepting the
recommendations of Fitment Committee which
recommended concessional 12% GST for ‘micro
irrigation systems, namely, sprinklers, drip
irrigation system, including laterals.’ The intent
appears to have been to extend the benefit of
concessional rates to sprinklers being used for
irrigation/agriculture.
 Field formations are holding that sprinklers for
uses other than irrigation will fall under Sl. No. 325
of Schedule III of Notification no. 1/2017- CT
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(Rate), dated 28.06.2017 and will attract 18%. The
entry reads as follows:
Mechanical Appliances (whether or not hand-
operated) for projecting, dispersing or
spraying liquids or powders; fire
extinguishers, whether or not charges; spray
guns and similar appliances; steam or sand
blasting machines and similar jet projecting
machines [ other than sprinklers; drip
irrigation systems including laterals;
mechanical sprayer; nozzles for drip
irrigation equipment or nozzles for sprinklers]

 However, CESTAT, New Delhi vide Final Order
51063 /2022 (Decision on 04.11.22) held against
the revenue and observed, inter alia that –it is also
clear that Sl. No.195B of the notification does not
restrict the sprinklers to any category.
 Although intent appears to be to extend the benefit
of concessional rate to sprinklers for use in
irrigation system, the notification entry providing
concessional rate of 12% (Entry No. 195 B) does
not explicitly exclude any type of sprinklers, hence
the different interpretation in field and quasi-
judicial fora.

 After deliberations, Fitment Committee
recommended :
o to clarify that all types of sprinklers
including fire sprinklers are covered
under the above entry (195 B Schedule-II
@ 12%), and
o to regularize the past practice on ‘as is
basis’ in view of genuine doubts.
Agenda for 53rd GSTCM Volume 2
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8. Parts of
Poultry
machinery

( 8436
9100)



- 12%  GST classification is based on Customs
classification and ‘Parts of Poultry keeping
Machinery’ are specifically classified under HSN
8436 9100. Customs Heading of HSN 8436 which
explicitly includes ‘parts’( 8436 9100) is as
follows:
Other agricultural, horticultural, forestry,
poultry keeping or bee-keeping machinery,
including germination plant fitted with
mechanical or thermal equipment; poultry
incubators and brooders.
 In GST, HSN 8436 is covered under Sl. No. 199 of
Schedule II (@12%) to Notification no. 1/2017- CT
(Rate) and corresponding States / UT / IGST
notification Entry 199 reads as:
Other agricultural, horticultural, forestry,
poultry keeping or bee-keeping machinery,
including germination plant fitted with
mechanical or thermal equipment; poultry
incubators and brooders
 It can be seen that description of goods for Customs
heading 8436 (which includes parts as well) has
been entirely incorporated in GST.
 Parts of poultry machinery which can only be for
use specifically in these machinery shall be
classified under CTI 8436 91, whereas general use
parts which can be used in poultry machinery and
other machinery/usages also, shall be classified
under their respective headings. Thus, parts of
poultry-keeping machinery are also included in Sl.
No. 199 even though these are not explicitly
mentioned.
 However, in the past, for goods under heading 8432
and 8433, ‘parts’ have been specifically included at
a later stage in Sl. No. 196 & 197 of Schedule II to
Notification no.1/2017- CT (Rate), dated
28.06.2017, which has created ambiguity for entries
Agenda for 53rd GSTCM Volume 2
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wherein parts are not explicitly included.
 Fitment Committee recommended to amend
notification entry to add ‘parts thereof’ and to
regularize past practice on ‘as is basis’.
9. Pulses and
cereals
supplied to
or by any
agency
engaged by
Governme
nt.
5% NA  For the period from 01.07.2017 up to 17.07.2022,
supplies of any goods falling under heading 0713
(pulses) or chapter 10 (cereals) attracted GST at the
rate of 5%, when such goods are put up in a unit
container and bear a registered brand name and/or
bear a brand name on which an actionable claim or
enforceable right in a court of law is available.
 For the purposes of the said levy:
o the phrase "registered brand name" means: a
brand registered as on the 15th May, 2017
under the Trademarks Act, 1999, irrespective
of whether or not the brand is subsequently
deregistered; a brand registered as on the 15th
May, 2017 under the Copyright Act, 1957; a
brand registered as on the 15th May, 2017
under any law for the time being in force in
any other country.
o the phrase “brand name” means brand
name or trade name, that is to say, a name or a
mark, such as symbol, monogram, label,
signature or invented word or writing which
is used in relation to such specified goods
for the purpose of indicating, or so as to
indicate a connection in the course of trade
between such specified goods and some
person using such name or mark with or
without any indication of the identity of that
person.
 Pulses and cereals are goods procured by
Governments for distribution free of cost or at
subsidized rate to the eligible beneficiaries like
economically weaker sections of the society or
under schemes of the Government such as PDS,
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ICDS etc.
 Agencies and Government Cooperatives such as
NAFED stock these goods under Government
purchase in packages with their name to ensure the
stock of Government is identified in the warehouses
of State/Central Warehousing Corporations and
safely stored. Buyers purchase the stock as per
prevailing market rate of raw pulses. No special
price is realised by these agencies by putting its
name on the bags. However, if the name of the
agency happens to be a trademark (such as
NAFED), then supplies that are put up in a unit
container and bearing a registered brand name are
leviable to GST at the rate of 5%.
 In view of genuine interpretational issues, the
Fitment Committee recommended to regularise on
“as is where is” basis, the issue on supplies of
pulses (falling under HS 0713) and cereals (chapter
10) when supplied to or by any agency engaged by
Union Government or State Government/ Union
Territory for procurement and sale, for the entire
period from 01.07.2017 up to 17.07.2022, under
any programme/scheme duly approved by the
Central Government or any State Government that
intends to distribute such goods at free of cost or at
subsidized rate to the eligible beneficiaries like
economically weaker sections of the society subject
to the condition that :
(i) the concerned supplier shall submit a certificate
from an officer not below the rank of the Deputy
Secretary to the Government of India or the State
Government /Union Territory, within 180 days
from the date of issuance of the Circular, and
(ii) Input Tax Credit shall not be allowed on such
inputs, and if availed on such inputs, shall be
reversed within a period of 180 days from the date
of issuance of the Circular if the supplier intends or
Agenda for 53rd GSTCM Volume 2
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takes the benefit under the proposed regularisation.
10. Solar
Cooker
[7321]

18% Nil or 5%  Goods falling under heading 7321 attract GST rate
of 18% vide Sl. No. 235 of Schedule III of
notification No. 01/2017-CT (Rate) dated
28.06.2017. Description of goods under Sl. No. 235
is as follows:
“Stoves, ranges, grates, cookers (including
those with subsidiary boilers for central
heating), barbecues, braziers, gas-rings, plate
warmers and similar non-electric domestic
appliances, and parts thereof, of iron or steel
[other than kerosene burners, kerosene stoves
and wood burning stoves of iron or steel]”.
 “Kerosene burners, kerosene stoves and wood
burning stoves of iron or steel” falling under
heading 7321 have been provided a concessional
GST rate of 12%.

 As per the WCO explanatory notes, heading 7321
covers all cooking appliances which are normally
used in household and use solid, liquid or other
source of energy including solar energy.
 In light of the description, such solar cookers are
classifiable under CTH 7321 attracting 18%.
 However, heading 7321 excludes electro-thermic
appliances falling under heading 8516 and
appliances also using electricity for heating
purpose, as in case of combined gas-electric
cookers for example (heading 8516). Therefore,
solar cookers which may have electricity as an
alternate source of energy are out of purview of
heading 7321.
 A concessional GST rate of 12% is provided to
various renewable energy devices and parts for their
manufacture, which may fall under chapter 84, 85
and 94, vide Sl. No. 201A of Schedule II of
Agenda for 53rd GSTCM Volume 2
Page 22 of 189
notification No. 01/2017-CT (Rate) dated
28.06.2017. The goods covered under this entry are
falling under chapters 84, 85 and 94, and are
described as shown below:
Following renewable energy devices and parts for
their manufacture:-
(a) Bio-gas plant;
(b) Solar power based devices;
(c) Solar power generator;
(d) Wind mills, Wind Operated Electricity
Generator (WOEG);
(e) Waste to energy plants / devices;
(f) Solar lantern / solar lamp;
(g) Ocean waves/tidal waves energy
devices/plants;
(h) Photo voltaic cells, whether or not
assembled in modules or made up into panels.
 The heading 8516 of chapter 85 covers the
following goods as described below:
Electric instantaneous or storage water heaters
and immersion heaters; electric space heating
apparatus and soil heating apparatus; electro-
thermic hair-dressing apparatus (for example,
hair dryers, hair curlers, curling tong heaters)
and hand dryers; electric smoothing irons;
other electro-thermic appliances of a kind used
for domestic purposes; electric heating
resistors, other than those of heading 8545
 Further, while tariff item 8516 50 00 covers
microwave ovens, tariff item 8516 60 00 covers
other ovens; cookers, cooking plates, boiling rings,
grillers and roasters. Therefore, it appears that solar
cooker with a dual source of both solar energy and
electricity may fall under heading 8516 and attract
GST rate of 12% under Sl. No. 201A of Schedule II
of notification No. 01/2017- CT (Rate) dated
28.06.2017.
 Since there is duality of rates on solar cookers
Agenda for 53rd GSTCM Volume 2
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depending on whether it is a single energy source or
multiple energy source, Fitment Committee
recommended to provide uniform concessional rate
which would also promote renewable energy
devices, and also bring parity with GST rate
applicable on kerosene and wood burning stoves
which are more harmful to the environment.
 Fitment Committee recommended that along with
issuing a clarification that Solar cookers that work
on dual energy sources of solar energy and grid
electricity are classifiable under 8516 and already
attract 12%, a uniform rate of 12% for all kinds of
solar cookers to avoid litigation.
11. Steel/Alum
inium Milk
Can used
in milk
dairies


18% 12%  Goods (Table, kitchen or other household articles of
iron & steel; Utensils) falling under HSN 7323 and
7615 ( Table, kitchen or other household articles of
aluminium; Utensils ) attract GST Rate of 12% vide
Sl. No. 184 and 186 respectively of Schedule II of
Notification No. 01/2017-CT (Rate) dated
28.06.2017.
 WCO Explanatory Notes for HSN 7323, states that
articles for kitchen use such as domestic milk cans
are included within its ambit. Similarly, WCO
Explanatory Notes for HSN 7615 state that this
heading covers the same type of articles as are
described in the explanatory notes to headings 7323
and 7324, particularly the kitchen utensils, sanitary
and toilet articles described therein.
 Further, as mentioned above, goods falling under
HSN 7310 (Tanks, casks, drums, cans, boxes and
similar containers, for any material (other than
compressed or liquefied gas), of iron or steel, of a
capacity not exceeding 300 l) and 7612 (Aluminium
casks, drums, cans, boxes, etc.) attract GST Rate of
18% vide Sl. No. 224 and 273 respectively of
Schedule III of Notification No. 01/2017-CT (Rate)
dated 28.06.2017.
Agenda for 53rd GSTCM Volume 2
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 As per the WCO Explanatory Notes (for HSN
7310), this heading inter alia covers sheet or plate
iron or steel containers of a capacity not exceeding
300 l, commonly used for the commercial
conveyance. Further, the larger containers covered
by this heading include tar, or oil drums; petrol
cans; milk churns; casks and drums for alcohol,
latex, caustic soda, calcium carbide, dyestuffs or
other chemicals. The smaller containers include
boxes, cans, tins, etc. mainly used as sales packing
for butter, milk, beer, preserves, fruit or fruit juices
etc.
 Similarly, for HSN 7612, the WCO Explanatory
Notes state that the provisions of Explanatory Note
to heading 7310 also apply mutatis mutandis to this
heading. Further, it states that “casks and drums of
aluminium are mainly used for the transport of
milk, beer, wine etc.”
 It is also pertinent to mention that Sl. No. 275 A of
Schedule III (goods at 18% GST) pertaining to
HSN 7615 deals with “goods [other than table,
kitchen or other household articles, of aluminium;
Utensils]”.
 Thus, a clear distinction is created between goods
for domestic use/consumption, which are to be
taxed at 12%; and goods for commercial use (which
are to be taxed at 18%) with respect to HSN 7615.
 Thus, from the WCO Explanatory Notes for the
relevant chapters, it is clear that milk cans for use at
a commercial scale/for business purpose would be
covered under the heading 7310/7612, whereas,
domestic milk cans would be classifiable under
HSN 7323/7615.
 Fitment Committee recommended to provide a
uniform rate of 12 % for all kinds of milk cans
irrespective of their use by way of creating a
Agenda for 53rd GSTCM Volume 2
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separate entry.

12 Aerated
beverages
and energy
drinks (HS
2202) sold
by Unit
Run
Canteens.

GST
Compen
sation
Cess:12
%
Cess payable
by URC on
outward
supply of
good may be
fully
exempted
OR
applicable
cess may be
collected at
the Depot
level for
supplies
made by
URCs
 Aerated beverages and energy drinks are sold by
Canteen Stores Department (CSD) through URCs
to the authorised customers.
 On account of exemption from GST on outward
supply of goods by the URCs to the authorized
customers, they are not required to be registered
under GST. However, this exemption does not
apply to Compensation Cess and therefore, URCs,
being the point of sale, are required to be registered
and pay compensation cess.
 Ministry of Defence has represented that URCs are
required to move along with Army units to different
often remote locations across India and due to these
challenges for the URCs to comply with GST
Compensation Cess only for sale of aerated and
energy drinks and therefore requested to either
exempt the compensation cess or allow for the
applicable cess may be collected at the Depot level.
 Based on the recommendation of the GST Council
in its 52nd meeting, the matter was referred to the
Law Committee. The Law Committee has opined
that there are no provisions as per which tax can be
collected and deposited by a registered person in a
State on behalf of a supply made by a supplier
located in another state. Further, in the GST
regime, supply is a taxable event and a person
making taxable supply (except in case of RCM) is
supposed to collect and deposit the applicable GST
& cess and no such exception can be made within
the current scheme of GST to collect and deposit
GST at a different place than the point of sale.
 In view of the observations of the Law Committee,
the Fitment Committee recommended to exempt
Agenda for 53rd GSTCM Volume 2
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Compensation Cess on supply of aerated beverages
by URCs.
13 Fertilizers 5% Further
reduction
 All fertilizers attract GST at the rate of 5%. The
fertilizers are urea, DAP, Potassic (muriate of
potash) fertilizers, and ammonium sulphate.
 The Standing Committee on Chemicals &
Fertilizers in its 43rd Report has recommended that
the issue to further reduce GST on fertilizers may
be placed before the GST Council.
 The issue to further reduce GST (from 5%) on
fertilizers was placed before the GST council in its
45th and 47th meetings held in September, 2021
and June, 2022, respectively. The GST Council,
however, did not recommend any change in the
rates of fertilizers or other organic farm inputs.
 Blanket exemption from items such as fertilizers,
chemicals and nutrients will cause duty inversion
and blocking of capital for the industry.
 However, in light of the strong recommendations of
Standing Committee on Chemicals & Fertilizers,
the matter is being placed again before the Council.
 The Fitment Committee recommended that since
the matter has been discussed in the previous GST
Council meetings, the matter may be referred to the
GoM on Rate Rationalization to take a holistic
view.
14 Fertilizer
Raw
Materials
(like
Sulphuric
Acid and
Ammonia)
18% 5%/12%

 The Standing Committee on Chemicals &
Fertilizers in its 43rd Report has stated that lower
the GST on raw materials
 Sulphur and Ammonia have been prescribed GST
rate of 18% considering the pre-GST rate. Both
Sulphur and Ammonia have multiple uses.
 While sulphuric acid is used to make fertilisers, it is
also used in the production of detergents, paints,
dyes, plastics, artificial fibres etc. Similarly, while
Agenda for 53rd GSTCM Volume 2
Page 27 of 189
ammonia is mostly used in agriculture as fertilizer,
it is also used as a refrigerant gas, for purification of
water supplies, and in the manufacture of plastics,
explosives, textiles, pesticides, dyes and other
chemicals. It is found in many household and
industrial-strength cleaning solutions also.
 GST reduction for actual use on fertilizers would
entail an end use-based exemption. This besides
being difficult to administer are usually prone to
misuse.
 However, in light of the strong recommendations of
Standing Committee on Chemicals & Fertilizers,
the matter is being placed before Fitment
Committee
 The Fitment Committee recommended that the
matter may be referred to the GoM on rate
rationalization to take a holistic view.
15 Micronutri
ents
12%/18
%
Reduce GST


 The Standing Committee on Chemicals &
Fertilizers in its 43rd Report has opined that GST
rates on micronutrients should be brought down
 Micronutrients are considered as an essential plant
nutrient under the Fertilizer (Inorganic, Organic
Mixed) Control order, 1985. For example, Copper
Sulphate (CuSO4.5H2O) [HS 2833 25 00] is inter
alia used in agricultural fungicide. It attracts GST at
18%. Fertilizers attract GST at rate of 5%. Copper
sulphate has other uses like drying agent, as an
additive in fertilizer and food, and in industrial
applications like textile, leather, wood batteries etc.,
as well.
 Normally, micronutrients (like Zinc, manganese,
copper and boron) are used in smaller quantities
compared to fertilizer. Further, these have multiple
uses across various industries.
 Providing concession to micronutrients specifically
for use as fertilizer would entail an end use-based
Agenda for 53rd GSTCM Volume 2
Page 28 of 189
exemption which besides being difficult to
administer are usually prone to misuse.
 The matter has been discussed in various GST
council meetings including the 25th, 31st and 37th
meetings.
 However, in light of the strong recommendations of
Standing Committee on Chemicals & Fertilizers,
the matter is being taken up before Fitment
Committee
 Fitment Committee recommended that since the
matter has been discussed in various GST council
meetings including the 25th, 31st and 37th
meetings, the matter may be referred to the GoM on
rate rationalization to take a holistic view.
16 Tobacco
products
like
cigarettes,
bidis,
smokeless
tobacco
products
etc
28% To notify
maximum
tax of 20%
under CGST
and 20%
under SGST
 Request has been received to notify the maximum
tax rate of 20% under CGST and 20% under SGST
Act on tobacco products like cigarettes, bidis,
smokeless tobacco products etc.
 Fitment Committee recommended to refer the issue
to GoM on Rate Rationalisation.
17 Pulses 5%,
“pre-
package
d and
labelled
”
Nil,
other
wise
Clarification
on IGST rate
applicable
on imported
raw pulses
packed in
packages
above 25 kg
 In the 47th GST Council meeting, the GST
Council (based on the Interim Report of GoM on
Rate Rationalisation) had recommended a change
in levy of GST on specified goods like pulses,
cereals like rice, wheat, flour, etc., from ‘when
bearing a registered brand or brand in respect of
which an actionable claim or enforceable right in
a court of law is available’ to when “pre-
packaged and labelled” as required under the
Legal Metrology Act, 2009 and rules made
thereunder.
 The change was notified on 13th July, 2022, with
effect from 18th July, 2022. Herein, it was
Agenda for 53rd GSTCM Volume 2
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defined that “the expression ‘pre-packaged and
labelled’ means a ‘pre-packaged commodity’ as
defined in clause (l) of section 2 of the Legal
Metrology Act, 2009 (1 of 2010) where, the
package in which the commodity is pre-packed or
a label securely affixed thereto is required to bear
the declarations under the provisions of the Legal
Metrology Act, 2009 (1 of 2010) and the rules
made thereunder.”
 Prior to 01.01.2018, Rule 3 of the Legal
Metrology (Packaged Commodities) Rules, 2011
read that as regards the applicability of Chapter II
(provisions applicable to packages intended for
retail sale), it was provided that the provisions of
this Chapter shall not apply to - (a) packages of
commodities containing quantity of more than 25
kg or 25 litre excluding cement and fertilizer sold
in bags up to 50 kg; and (b) packaged
commodities meant for industrial consumers or
institutional consumers.
 After the Legal Metrology (Packaged
Commodities) Amendment Rules, 2017, with
effect from 01.01.2018, it was amended to
provide that the provisions of this Chapter shall
not apply to - (a) packages of commodities
containing quantity of more than 25 kilogram or
25 litre; (b) cement, fertilizer and agricultural
farm produce sold in bags above 50 kilogram; and
(c) packaged commodities meant for industrial
consumers or institutional consumers.
 FAQ was issued (after deliberation by the Fitment
Committee) on 17th July, 2022, to clarify the
scope of pre-packaged and labelled for the
purposes of GST levy.
 For eg. In Sl No. 3 of the FAQ it was clarified
that “ For such commodities (food items- pulses,
cereals, flour, etc.), rule 3 (a) of Chapter-II of
Agenda for 53rd GSTCM Volume 2
Page 30 of 189
Legal Metrology (Packaged Commodities) Rules,
2011, prescribes that package of commodities
containing quantity of more than 25 kg or 25 litre
do not require a declaration to be made under
rule 6 thereof. Accordingly, GST would apply on
such specified goods where the pre-packaged
commodity is supplied in packages containing
quantity of less than or equal to 25 kilogram.
Illustration: Supply of pre-packed atta meant
for retail sale to ultimate consumer of 25 Kg shall
be liable to GST. However, supply of such a 30
Kg pack thereof shall be exempt from levy of
GST.”
 From the above FAQ, it is clear that the intention
of the GST Council was that supply of specified
items like cereals, pulses, flour etc., containing a
quantity of more than 25 Kg/25 litre would not
fall in the category of pre-packaged and labelled
commodity for the purposes of GST and would
therefore not attract 5% GST.
 The Fitment Committee observed that the
intention of the GST Council was always to tax
agricultural farm produce less than 25 kg. In view
of above, in order to align the GST rate
notification with the intention of the GST
Council, the Fitment Committee recommended
that suitable amendment may be made in the
definition of the expression ‘pre-packaged and
labelled’ in the concerned GST rate notifications
to align it with the afore-said intention of the GST
Council, to exclude the supply of agricultural
farm produce in packages of more than 25 kg or
25 litre from the scope of pre-packaged and
labelled for the purpose of taxation.
 Further, the Fitment Committee also
recommended to regularise the issue for the past
period on “as is where is” basis.
Agenda for 53rd GSTCM Volume 2
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b) Issues where no change has been proposed by the Fitment Committee in relation to goods
Annexure II
S.
No.
Description of
Goods /HSN
Present
Rate
Requested
Rate
Comments
1. Ice cream
(HS 2105)


18% To
reconsider
the exclusion
of Small
Scale
Manufacture
rs of Ice
Cream from
the benefit of
Section 10(1)
of the GST
Act
(composition
levy scheme).
 The Hon’ble High Court of Chhattisgarh,
Bilaspur in W.P. (C) No. 2139 of 2019 has
directed the GST Council to reconsider its
decision on exclusion of ice cream from
composition levy.
 In the 17th GST Council meeting, the GST
Council had approved to exclude
manufacturers of ice cream and other edible
ice, whether or not containing cocoa from
composition scheme.
 In view of the directions of the Hon’ble High
Court of Delhi to reconsider the exclusion of
small scale manufactures of ice cream from
the benefit of Section 10(1) of the Act, the
issue was placed before the Council in its 43rd
meeting and the GST Council approved the
continuation of exclusion of ice cream from
composition levy.
 Fitment Committee has recommended that the
issue has been deliberated at length time and
again by the GST Council and the Council has
made a well-thought out recommendation.
Therefore, the Fitment Committee
recommends to maintain status quo.
2. Pharmaceutical
products/
equipment for
research
(Chapter 30)
5%/
12%
Nil IGST on
imports
 PAC recommended for :
(i) exempting imports of pharmaceutical
products to those organisations that
are carrying out serious research in
scientific field .
(ii) Hospitals carrying out research on life
saving medicines and treatment may
Agenda for 53rd GSTCM Volume 2
Page 32 of 189
S.
No.
Description of
Goods /HSN
Present
Rate
Requested
Rate
Comments
also be considered for extending the
benefit IGST exemption.
 Prior to GST, imports scientific equipment,
instruments, apparatus, parts and
consumables were exempt from additional
duty (Countervailing duty in lieu of central
excise duty and special additional duty
leviable under section 3 of the Customs Tarff
Act,1975) under Notification no. 51/96-
Customs. Such countervailing duty and
special additional duty based on existing
domestic taxes like excise duty and VAT
was to ensure that a level playing field was
available to domestic manufacturers. With
the enactment of GST, IGST is levied on
imported goods at a rate equivalent to the
domestic GST.
 Upon introduction of GST, Notification no.
51/96-Customs was amended by Notification
no. 43/2017-Customs dated 30th June 2017
to substitute, among others, the reference to
“additional duty leviable thereon under
Section 3” with “Integrated Tax leviable
thereon under sub-section (7) of section 3 of
the said Tariff Act”. Consequently, such
imports enjoyed IGST exemption after the
introduction of GST.
 Thereafter it was felt that domestic
manufacturers of such goods were put in a
disadvantageous position by paying
18%/28% while making inter-state supplies,
the GST Council, in its 23rd meeting held on
10.11.2017, recommended 5% concessional
IGST to restore a level playing field for
Agenda for 53rd GSTCM Volume 2
Page 33 of 189
S.
No.
Description of
Goods /HSN
Present
Rate
Requested
Rate
Comments
domestic manufacturers.
 The GoM on rate rationalization
recommended that the concessional GST
structure (including IGST on imports) may
be withdrawn to avoid inverted duty
structure. This was accepted in the 47th GST
Council meeting held in June 2022.
Accordingly, vide notification No. 11/2022-
Integrated Tax (Rate) dated 13.7.2022
(which came into effect from 18.7.2022),
notification 47/2017- Integrated Tax (Rate)
was rescinded. Further, vide notification No.
42/2022-Customs dated 13.07.2022 the
reference to “from the whole of Integrated
tax leviable thereunder under sub section (7)
of the Customs Tarff Act” in notification No.
51/96-Customs has been omitted.
 The above position was also placed before
the PAC.
 As regards the second issue, this will entail
end use-based exemption which are difficult
to administer and monitor. The policy of the
Government is to move away from end use-
based exemptions.
 Fitment Committee did not recommend to
exempt IGST on imports of such goods as it
would be detrimental to domestic
manufacturers of such goods. The IGST
exemption to imports were withdrawn to
restore a level playing field for domestic
manufacturers.
3. Orthopaedic
Implants
5% 18%  In the 47th GST Council, the GST rate of 5%
was fixed on all goods falling under heading
9021 (S. No. 255A of Schedule I of
Agenda for 53rd GSTCM Volume 2
Page 34 of 189
S.
No.
Description of
Goods /HSN
Present
Rate
Requested
Rate
Comments
HSN – 9021


notification No. 01/2017-CT Rate refers) in
order to bring uniformity for all these goods
falling under heading 9021 and bring relief to
consumers needing such medical items.
 Prior to this change some of the items like
splints, implants etc attracted 12% GST rate.
 Now, request is for increase the GST rate on
orthopaedic implants to 18% stating that the
inverted duty structure leads to blocking of
working capital.
 Further, it has also been mentioned that the
imports have an advantage over domestic
producers due to ‘Nil’ BCD and low 5%
IGST rate.
 Further, inputs were sought from Ministry of
Social Justice & Empowerment (MoSJE) with
respect to the request for increase in GST
rates, which has replied that increase in GST
rates would increase the cost of these goods
and not be in the interest of persons with
disabilities (Divyangjan).
 Fitment Committee recommended to maintain
status quo considering inputs from Ministry of
Social Justice that the increase in GST rate
would increase cost of these goods and not be
in the interest of Divyangjan.






Agenda for 53rd GSTCM Volume 2
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c) Issue in relation to goods placed before the Council for information
Annexure III
S.
No.
Description of
Goods /HSN
Present
Rate
Requeste
d Rate
Comments
1. Updation in list
of banks/entities
eligible for IGST
exemption as per
S No. 359 A of
Notification No.
50/2017
(Customs) dated
30.06.2017 to
align with the
change in
Appendix 4B
HBP of Foreign
Trade Policy,
2023, by DGFT.

NA NA  A general approval was obtained from
GST Council (in the 52nd Meeting) to
update the lists as and when Appendix 4B
is amended by DGFT, and thereafter place
the changes before Council for
information as the changes are technical
in nature.
 In light of the Corrigendum dated
09.02.2024 to Public Notice 28/2023
dated 18.08.2023 issued by DGFT to
make it explicitly clear that the list of
banks authorised by RBI to import- both
Gold & Silver and only Gold is for FY
2023-24 w.e.f. 01.04.2023 and valid upto
31.03.24, a corrigendum was also issued
with respect to Notification No. 60/2023-
Customs dated 19.10.2023 so as to align it
with the partially modified Appendix 4B
of the Handbook of Procedure, 2023 (FTP
2023).
 For the FY 2024-25, after issuance of
updated list of authorised banks by RBI,
DGFT also amended Appendix 4B of
Handbook of Procedure, Foreign Trade
Policy (FTP) ,2023 vide Public Notice
No. 54/2023, dated 28.03.2024, updating
the list of banks authorised for import of
Gold and Silver by way of removing 4
banks namely- Bank of India, Indian
Overseas Bank, Punjab National Bank &
Union Bank of India from the existing list
Agenda for 53rd GSTCM Volume 2
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*****

and by way adding 3 banks in the list of
banks authorised for import of only Gold
,namely Indian Overseas Bank, Punjab
National Bank & Union Bank of India, for
the financial year 2024-25 wef 01.04.24
to 31.03.25.Accordingly, Notification No.
25/2024-Customs, dated 6th May, 2024
was issued to amend the list in
Notification 50/2017-Cus implementing
the same.
 As general approval has already been
obtained from GST Council to update the
lists as and when amended by DGFT, and
thereafter place the changes before the
Council for information as the changes
are only technical in nature,
 Fitment Committee recommended to
place the same before the GST Council
for information.
Agenda for 53rd GSTCM Volume 2
Page 37 of 189
d) Recommendations made by the Fitment Committee for making changes in GST rates or
for issuing clarifications in relation to services
Annexure IV
Sl.
No.
Proposal Details of request Discussions in Fitment Committee
and its recommendations
1. To clarify the
GST liability
on the
premium
settlement by
lead insurer
to co-
insurers in
the co-
insurance
agreement.


 Transfer of money by lead insurer to
the other co-insurers is merely a
settlement of money.
 There is no supply of service by co-
insurers to the lead insurer.
 The insurance service is jointly
rendered by all the insurers to the
insured.
 GST is being discharged on the entire
premium by the lead insurer. It is the
tax suffered premium which is
apportioned by the lead insurer to the
co-insurers.
 Based on the recommendations of the
47th GST Council meeting held on 28th
& 29th June, 2022, it was clarified to
IRDAI that though lead insurer pays tax
on the entire amount, the co-insurer(s)
being separate legal entities and
receiving a share of premium from lead
insurer are liable to pay GST on the
portion of the premium they receive.
 In GST, this arrangement could only
ensure that co-insurers avail ITC on
their input services and pay GST on
their output service, i.e., share of
premium. Lead insurer could avail the
ITC of GST paid by the co-insurer(s).
 It was also conveyed that no extra
liability is created if co-insurer(s) pay
 The issue of taxability of co-
insurance premium apportioned by
lead insurer to the co-insurer in
coinsurance agreements was
placed before GST Council in its
47th meeting held in June, 2022
and based on recommendation of
the Council, it was clarified to
IRDAI that though lead insurer
pays tax on the entire amount, the
co-insurer(s) being a separate legal
entity and receiving a share of
premium from lead insurer are
liable to pay GST on the portion of
premium they receive.
 Thereafter, IRDAI has brought to
the notice certain challenges in
implementing the above decision
of the GST council.
 In co-insurance, insured (policy
holder) chooses to get the
risk/asset insured by more than
one insurer. The insured
determines the panel of insurers
and their share of participation at
the time of commencement of
insurance cover.
 Lead insurer and co-insurers
jointly provide the insurance
service to the insured. All co-
Agenda for 53rd GSTCM Volume 2
Page 38 of 189
Sl.
No.
Proposal Details of request Discussions in Fitment Committee
and its recommendations
tax on their share of premium received
from lead insurer. In fact, if co-insurers
are absolved of their liability, they
would lose their proportionate ITC,
while lead insurer would end up paying
higher amount of tax in cash.
 IRDAI has represented that it may not
be appropriate for co-insurers to raise
an invoice on the lead insurer against
the co-insurance premium apportioned
to them in absence of any underlying
supply by the co-insurers to the lead
insurer.
 For the same reason, it may not be
appropriate for the lead insurer also, to
take ITC of the GST charged by co-
insurers on such invoices.
 IRDAI has also raised the issue as to
what should be the description of
service declared in such invoices as the
same definitely cannot be insurance
service by co-insurer to the lead
insurer.
insurers are signatories to the co-
insurance agreement with the
insured. The lead insurer handles
the premium and claim, as a single
point of contact for the insured
(policy holder).
 The entire premium is collected by
the lead insurer which is
apportioned among the lead insurer
and the other co-insurers in the
ratio of the risk assumed by them.
 The claims are also processed by
the lead insurer but paid by all the
co-insurers in the ratio of the risk
assumed by them.
 Lead insurer pays GST on the
entire amount of premium.
 All co-insurers including the lead
insurer are distinct legal entities
who jointly supply insurance
service to a common insured.
 Since the entire GST @18% is paid
by the lead insurer on behalf of all
the co-insurers, after deliberation,
Fitment Committee recommended
as below:
(i) Supply between lead
insurer and co-insurer may
be declared as no supply
under Schedule III of the
CGST Act, 2017.
(ii) To regularise the past cases
on “as is where is basis” by
way of issuance of a
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circular.
2. To clarify
regarding
GST
taxability on
re-insurance
commission.


 As per General Insurance Council (GIC)
and Insurance Regulatory and
Development Authority of India (IRDAI),
under the Insurance Act, 1938, every
general insurer reinsures a part of the
general insurance risk assumed by it with
other insurers/ reinsurers. This is known
as reinsurance.
 The reinsurer allows a deduction (as a
certain percentage of the premiums
received) as per mutual agreement. This is
treated as a discount allowed by the
reinsurer in the premium payable. This is
referred to as “reinsurance commission”
in trade parlance.
 Reinsurer charges GST on the gross
premium charged without deducting
reinsurance commission. Here, the
reinsurance commission operates like a
credit note.
 Reliance has been placed on circular
dated 16-04-2010 issued by CBIC in the
context of service tax in the positive list
regime which clarified as below
“…… the arrangement between the
insurance company and the reinsurer is
only sharing of expenses and there is no
service provided by the insurance
company to the re-insurer for a
consideration. Since the policy holder
may not even be aware of the operations
of the re-insurer, it cannot be said that the
payment made by the re-insurer to the
 Reinsurance is an insurance of the
insurance companies. Insurance
companies spread their risk by
reinsuring whole or part of the risk
assumed by them for which re-
insurance premium is paid by
insurance companies to the re-
insurer.
 Primary insurers make marketing,
administrative and underwriting
efforts and incur expenses in
procuring the insurance business.
 The reinsurers do not incur these
costs. Therefore, it is a general
practice that reinsurers participate
in the insurers acquisition cost by
paying reinsurance commission
from the premium ceded to them.
 Reinsurance commission is a fee
paid by a reinsurance company to a
ceding company to cover such
administrative costs, underwriting
and business acquisition expenses.
 The very reinsurance contract
which specifies the risk and the
premium ceded by the insurer to
the reinsurer also specifies the
reinsurance commission as a
percentage of the ceded insurance
premium.
 While calculating operating profit,
ceding commission received by
insurer is not added to his earnings.
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insurance company is for its business
promotion or a service on behalf of the
re-insuring company (i.e., Business
Auxiliary Service). In fact, it is the
reinsurer which provides insurance
service to the insurance company. As
both the insurance company and
reinsurer pay service tax on the entire
amount of premium charged by them, the
question of charging service tax under
any other taxable service does not arise.”
 IRDAI have requested for a clarification
along the lines of 2010 circular that no
GST is payable on reinsurance
commission.
 Thus, it was observed that the
arrangement between the insurance
companies and the reinsurer in this
transaction is only sharing of
expenses.
 After deliberations, Fitment
Committee recommended as
follows:
(i) Transaction of ceding
commission between Insurer
and Reinsurer may be declared
as no supply under Schedule
III of CGST Act, 2017.
(ii) To regularise the past cases on
“as is where is basis” by way
of issuance of a circular.


3. (a) To restore
GST
exemptions
on outward
supplies
made by
Ministry of
Railways
(MoR) and
exemption
on intra-
railway
supplies
(those made
between
different
 Indian Railways vide representation
dated 12.01.2024 has stated the
following:
o Railways provide transport services
to general public carrying both
passengers and vital goods at
subsidized rates. They recover only
57% of the cost of travel from
passengers;
o Various commodities across both
agriculture and industry sectors are
carried at less than cost, as part of
socio-economic service rendered
by Railways;
o Railways also operated a host of
services and lines including branch
(a) To restore GST exemptions on
outward supplies made by Ministry
of Railways (MoR).

 Based on the request of Indian
railways, all supplies of goods and
services made by Indian Railways
were brought under Forward
change mechanism after
recommendation of the GST
Council in its 52nd Meeting and
consequently exemptions that were
available to Indian railways were
withdrawn.
 Indian Railways had brought
difficulties in compliance of the
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railway
zones).

AND

(b) To
exempt GST
on
transactions
between
Special
Purpose
Vehicles
(SPVs) and
Ministry of
Railways
(MoR)
retrospectivel
y w.e.f
01.07.2017


lines and strategic lines in the
interest of regional equity and to
serve the defence needs of the
country. They are designed to serve
the larger public interest of
economic development of
backward areas and are not focused
on earning profits.
o Since various State Governments
are also partnering the Railways in
various JV projects they are also
impacted by changes in taxation.
o IR are an environmentally friendly
mode of transport which is now
losing to road transport; from 80%
in 1950s it has come down to 26%
in 2023
o IR has set a target to raise the
modal share of transportation by
rail from the current level of to
35% by 20230-31 to mitigate the
adverse impact on environment and
to reduce the overall logistics cost
for the country. This will result in
savings of Rs 1.2 lakh crores on
account of HSD oil with
consequential environmental
impact.
 In addition to above Indian Railways
has submitted the following points in
support of their request for restoring
exemptions on outward supplies:
o IR plays a vital role in ensuring the
smooth movement of goods and
decision of the 52nd GST Council
meeting given that Indian
Railways provide transport
services to general public carrying
both passengers and vital goods at
subsidized rates. They recover
only 57% of the cost of travel from
passengers.
 They also provide services to
general public such as platform
tickets, facility of cloak room
services etc at very nominal
charges. It would create a burden
on Indian railways as it would not
be possible to pass on the burden.
 After deliberations, Fitment
Committee recommended that
following specific services
provided to general public may be
exempted from GST:
(i) Platform tickets,
(ii) Facility of retiring
rooms/waiting rooms,
(iii) Cloak room services and
(iv) Battery-operated car services.

 As regards, intra railway supplies,
Railway officials explained before
the Fitment Committee that the
structure of the Indian Railways is
such that Zonal railways are
responsible for operating and
managing transportation services
among specific zone.
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services. Constituent Zonal
Railways are responsible for
operating and managing railway
services within specific geographic
region cutting across state
boundaries.
o Each zone has its own
administrative and operational
structure and these zones are
further divided into divisions,
which are responsible for specific
routes and services with zone.
o Zonal divisions help in efficient
operation and management of vast
railways network in India. All the
zonal railways work in tandem
with each other.
o Many long distance and important
trains pass through the
jurisdictions/states of several zonal
railways.
o Coordination among them is of
utmost importance for seamless
running of trains and other issues
like scheduling route planning,
repair, maintenance and crew
management are handled
collectively.
o On day-to-day basis, Railways are
engaged in enormous volume of
transactions with its customers,
other railway zones or divisions,
various central/state government
agencies or departments, public
 Each Zone has been further
divided into divisions. Many
trains, especially long distance
pass through states of several
zones.
 Intra Railways services include
services such as train operations,
repair and maintained services,
supply of wagons, coaches,
locomotives etc. amongst various
zones and divisions of the
railways.
 Indian Railways has not been
charging for intra railways activity
and no invoices are being issued
for these transactions. Taxing the
intra railways transactions will
hamper the operational efficiency.
 There are intricate issues involved
in intra railways supply such as
identifying the supply from one
zone/division to other; nature of
supply such as mixed, composite
supply; place of supply as one
zone may be located in one or
more states etc.
 Further, value of supply is also
difficult to be ascertained as there
is no actual flow of consideration
and no cost allocation per supply is
there.
 Fitment Committee recommended
to restore exemption on intra-
railway supplies (those made
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sector undertakings, etc.
o As a government entity, the
Railways does not charge for intra
railway activities, hence
implementing GST on transactions
is not possible since pricing and
invoicing cannot be done.
o Additionally due to several
limitations on availing the ITC
including restriction on using the
credit of GST paid on goods (since
only services are permitted for
availment of ITC) for providing
transportation services, the overall
costs will increase for MoR and
this will need to be passed on to
the general public or will need
additional GBS from Government
of India.
 Indian Railways has submitted the
following points in support of their
request to exempt GST on transactions
between SPV and IR
o The issue of GST on transactions
between SPVs and Indian
Railways and charging of GST on
transactions within the component
units of Indian railways will push
up Railway’s logistics cost
significantly and will render rail
transport costly.
o Given the huge social costs borne
by the Railways and being a part
of Government of India its
between different railway zones).
 Further, the intervening period i.e.
from 20.10.2023 till date of
notification on above services has
been recommended to be
regularised on “as is where is
basis”.
(b) To exempt GST on transactions
between Special Purpose Vehicles
(SPVs) and Ministry of Railways
(MoR) retrospectively w.e.f.
01.07.2017.
 MoR has earlier requested for
issuance of clarification that both
apportioned revenues paid to SPVs
and O&M costs charged by Indian
Railways from the SPV do not
attract GST.
 This request was placed before 48th
GST Council held on 17.12.2022
and based on the recommendations
of the Council, it was clarified that
Indian Railways and the SPV are
distinct persons.
 Supply of services by SPV to IR
by way of allowing it to use
infrastructure built and owned by
them during the concession period
against consideration in the form
of pro rata share of revenue is a
taxable supply. Similarly,
maintenance of services supplied
by Indian Railways to SPV are
also taxable.
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operations cannot be treated as
commercial in nature.
o MoR has been exploring options
for supplementing funds for
capacity building since 1986, in
view of the need to supplement
budgetary support and internal
generation. MOR created financial
structures (mainly Joint Ventures)
to raise debt for implementing
sanctioned ports/mines
connectivity projects.
o In 2012, CCEA approved new PPP
policy of MoR whereby various
participative models including
Joint Ventures, BOT, Non-
Government Line, Customer
Funding, Annuity models were
approved. Under the JV model
interested stake holders in
partnership with railway PSU
could participate in funding to
expedite execution. In many cases,
project specific SPVs were formed
by RVNL. Stakeholders of SPVs
include the state governments of
Odisha, Andhra Pradesh, Gujarat,
Karnataka, Chhattisgarh,
Maharashtra, Goa and Kerala,
besides MoR.
o Currently, GST is charged at 5%
on rail transport, including
transport on SPV lines. The SPVs
do not run a separate transport
 MoR has brought out the
difficulties faced by them in
implementation of the issue and
matter has been examined.
 SPVs are created for funding
projects of Indian Railways and to
supplement the Gross Budgetary
Support of the Government to
meet the infrastructure
requirements of the Indian
Railways. MOR created financial
structures (mainly Joint Ventures)
to raise debt for implementing
sanctioned ports/mines
connectivity projects.
 The additional 18% cannot be
transferred to ultimate user as
SPVs do not decide the fare/freight
structure which is based on tariffs
set by Railways which are uniform
throughout the country.
 After deliberations, Fitment
Committee recommended to
exempt GST on transactions
between SPVs and MoR and to
regularise the past cases on “as is
where is basis.”

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business. To tax the transaction
between IR and SPVs cannot be
transferred to ultimate user as
SPVs do not decide the
fare/freight structure which is
based on tariffs set by Railways
which are uniform throughout the
country. The ITC on this
transaction would also be partially
blocked.
o SPVs finances are also adversely
affected due to this sudden tax
burden leasing to financial
unviability. The financial burden
would result in either in rendering
these crucial transport connections
defunct or the Governments would
have to step in to fund these lines
to keep them functional. This is
not in interest of Government or
the national economy.
 These projects were conceived during the
period 2000-2010 and changing their
revenue streams mid-concession period,
by imposition of huge tax burden, will be
against the spirit of PPP scheme. It shall
dissuade private sector participation in
MoR’s future railway projects. Even
future projects canvassed by state
governments premised on part funding by
states may not find any traction in view of
the adverse tax implications.
4. To either
exempt or
 Post 1st July 2012, Notification No.
25/2012-ST dated 20.06.2012 was
 Under GST, Crop Insurance under
Pradhan Mantri Fasal Bima
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regularize
reinsurance
services of
specified
insurance
schemes
from
payment of
the GST
liability for
the period
from
01.07.2017
to
24.01.2018.



issued. Sl. No. 26 of this notification
exempted services concerning general
insurance business provided under
certain specified schemes.
 The exemption vide entry no. 35 of
Notification Number 12/2017 - Central
Tax (Rate) dated 28/06/2017 pertains to
general insurance under various notified
schemes. All such schemes are
Government programmes for priority
areas of the Indian public policy. One of
the specified schemes is the Pradhan
Mantri Fasal Bima Yojna (PMFBY). As
per the operational guidelines issued by
the Ministry of Agriculture and Farmers
welfare for this scheme, insurer is
required to take appropriate reinsurance
cover for their portfolio to safeguard the
interest of insured. Accordingly, as per
the regulations and guidelines, every
PMFBY policy is required to have both
components – insurance and reinsurance.
Reinsurance is an integral part of the
arrangement.
 Under service tax regulations, both
insurance and reinsurance were
exempted. If this was not done, service
tax charged by reinsurance companies
(or paid by insurer under reverse charge
in case of import of such services) would
become a cost to the insurer, thereby
impacting the cost of providing such
insurance to farmers.
 The reinsurance service provided to
Yojana (PMFBY) and Rashtriya
Krishi Bima Yojana are exempt
from GST vide Sl. No. 35 of
notification No. 12/2017-CT(R).
 In the 25th GST Council meeting
held in January, 2018, it was
recommended to exempt re-
insurance services in respect of
services related to insurance
schemes already exempt under Sl.
Nos. 35 and 36 of notification No.
12/2017-CT (Rate). Accordingly,
exemption was notified w.e.f.
25.01.2018.
 The issue of exemption of
reinsurance services of the
specified insurance schemes for
the period from 1st July 2017 to
24.01.2018 was discussed in the
47th GST Council meeting held in
June, 2022. However, no change
was recommended.
 The matter has been re-examined
and the Fitment Committee viewed
that the issue is for a brief period of
7 months only before exemption
was granted to reinsurance of
specified exempt services covered
by Sl. Nos. 35 & 36 of notification
No. 12/2017-CT (Rate).
 Fitment committee recommended
to regularize the payment of GST
on reinsurance services of specified
insurance schemes covered by Sl.
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insurance companies is a part and parcel
of the same activity provided by the
insurance company to the farmers. No
GST is required to be paid on supply of
such reinsurance services as the said
reinsurance services are required to be
provided in relation to the insurance
policies which are exempted from
payment of GST under the Notification
Number 12/2017 CT (Rate) as amended.
Nos. 35 & 36 of notification No.
12/2017-CT (Rate) for the period
from 01.07.2017 to 24.01.2018 on
‘as is where is basis’ i.e., suppliers
who have paid GST shall not be
eligible for refund and those who
have not paid shall not be required
to pay. This may be done by way
of issuance of a circular.


5. To clarify
that
reinsurance
services of
the insurance
schemes for
which total
premium is
paid by the
Government
is exempt
from GST
for the period
01.07.2017
to
26.07.2018.



 Certain insurance services under the
erstwhile regime of service tax were
exempted from the levy of service tax
under Sl. Nos. 26 and 26A of
Notification No. 25/2012-ST dated
20.06.2012.
 With advent of GST, such exemption
was extended to insurance services for
schemes covered under Sl. Nos. 35, 36
and 40 of the Notification No. 12/2017 -
CTR.
 Reinsurance services provided to
insurance companies engaged in
providing insurance services under
specified schemes as notified under Sl.
Nos. 35, 36 and 40 of Notification No.
12/2017-CTR dated 28.06.2017 were not
exempted initially.
 GST being an indirect tax levy, the
burden was ultimately borne by the end
customer, and in the present case, by the
state exchequer, which increased the
 In the 28th GST Council meeting
held on 21.07.2018, it was decided
to exempt re-insurance of
insurance schemes already exempt
under Sl. No. 40 of Notification
No. 12/2017-CTR. The exemption,
brought into effect by Notification
No. 14/2018-CT(R) dated 26-Jul-
2018, is prospective w.e.f. 27-Jul-
2018.
 Sl. No. 40 of Notification No.
12/2017-CT(R) exempts services
provided to the Central
Government, State Government
and Union Territory under any
insurance scheme for which total
premium is paid by the Central
Government, State Government
and Union territory.
 The matter has been examined and
Fitment Committee viewed that
the issue is for a period of 13
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cost of premium.
 In addition, since the credit of GST
charged by reinsurance company was
not available as an input tax credit to the
insurance companies, any GST collected
by the reinsurance company was
ultimately added to the cost of the
premium.
 The GST Council in its 25th meeting
dated 18.01.2018 recommended
exemption of reinsurance of specified
government insurance schemes under Sl.
No. 35 and 36 to the Notification No.
12/2017-CTR.
 To give effect to the said decision of the
GST Council, vide Notification No.
02/2018-CTR dated 25.01.2018, Sl. No.
36A was inserted in Notification No.
12/2017-CTR.
 However, the notification failed to
consider public insurance scheme(s) run
by Central Government /State
Government/Union Territories specified
under Sl. No. 40 of Notification No.
12/2017-CTR.
 That on account of such fallacy,
reinsurance services only for selective
public insurance scheme(s) provided by
the Central Government got exempted.
 It would be evident that it was never the
intention of the Government to levy
GST on reinsurance services provided to
insurance companies for insurance
schemes which were funded by the
months before exemption was
granted to reinsurance of insurance
services covered by Sl. No. 40 of
Notification No. 12/2017-CTR
dated 26.07.2018.
 Fitment committee recommended
to regularize the payment of GST
on reinsurance services of the
insurance schemes for which total
premium is paid by the
Government covered under Sl. No.
40 of notification No. 12/2017-
CTR dated 28.06.2017 for the
period from 01.07.2017 to
26.07.2018 on ‘as is where is
basis’ i.e., suppliers who have paid
GST shall not be eligible for
refund and those who have not
paid shall not be required to pay.
This may be done by way of
issuance of a circular.

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Government.
 After the 28th GST Council meeting,
Notification No. 14/2018-CTR dated
26.07.2018 extended exemption to
reinsurance services covered under Sl.
No. 40.
 The decision of GST Council was
merely to clarify and make explicit that
was implicit in the Notification No.
02/2018-CTR and therefore the benefit
of such curative Notification No.
14/2018-CTR should be available from
01.07.2017.
6. To clarify
that the
term
‘reinsuranc
e’ as
mentioned
at Sl. No.
36A of
Central Tax
Notification
No.
12/2017-
CT(Rate)
dated
28.06.2017
means and
includes
‘retrocessio
n’ services
and
therefore
 In the 25th GST Council meeting dated
18.01.2018 and 28th GST Council
meeting dated 21.07.2018, it was
recommended that re-insurance of
government sponsored insurance
schemes should be exempt from GST.
 Exemption Notification No. 02/2018-
Central Tax (Rate) dated 25.01.2018 and
Exemption Notification No. 14/2018-
Central Tax (Rate) dated 26.07.2018
were issued to exempt reinsurance
services with respect to such
government sponsored insurance
schemes.
 Insurance Regulatory and
Development Authority of India
(“IRDAI”), recognises retrocession
services to be included in reinsurance
services and that no distinction has
been made by IRDAI between the two.
 The term ‘retrocession’ refers to a
 Entry at Sl. No. 36A in the
notification No. 12/2017-CTR
dated 28.06.2017 provides for
exemption to services by way of
reinsurance of the insurance
schemes specified in serial number
35, 36 (w.e.f. 25.01.2018) and serial
number 40 (w.e.f. 27.07.2018).
 An insurance company (primary
insurer) takes on a risk by insuring
someone's property. To manage
their own exposure to potential
large losses, they might purchase
reinsurance from another company
(reinsurer).
 However, the reinsurer might also
want to further spread their risk by
transferring a portion of the risk
they have taken on to other
reinsurers. This process of
reinsuring a reinsurance contract is
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retrocession
services of
specified
insurance
schemes are
also eligible
for
exemption
from GST.


reinsurance transaction where
‘reinsurers’ further reinsures its risk in
an underlying insurance scheme. It is a
settled position of law that reinsurance
means and includes retrocession, and
that retrocession is nothing but a term of
commercial use.
 The retrocession is nothing but a re-
insurance transaction whereby the risk
of a reinsurance is ceded to another
insurer while in reinsurance agreement
also part of one insurer’s risk is ceded to
another insurer.
 A position has been taken that retrocession
services are different from reinsurance
services by some field formations.
called retrocession. This practice
enhances the overall stability of the
insurance industry by mitigating the
impact of large losses.
 IRDAI (Re-insurance) Regulations,
2018 provides for the following
definition of ‘retrocession’:
2(21)’Retrocession' means a
re-insurance transaction
whereby a part of assumed
reinsured risk is further ceded
to another Indian Insurer or an
IIO (IFSC Insurance Office) or
a CBR (Cross border re-
insurer);
 From the above, it is seen that
retrocession is a ‘re-insurance of re-
insurance’ transaction wherein the
reinsurer further cedes a part of its
risk to the retrocessionaire.
 Fitment committee recommended
that the issue may be clarified that
retrocession is a ‘re-insurance of re-
insurance’ transaction wherein the
reinsurer further cedes a part of its
risk to the retrocessionaire and
therefore, eligible for the exemption
under Sl. No. 36A of the
notification No. 12/2017-CTR
dated 28.06.2017. This may be
done by way of issuance of a
circular.
7. To clarify
regarding
 A Gazette notification was issued in
compliance with the budget
 This issue was deferred by the 52nd
Council held on 07.10.2023.
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incentive
amount that
is shared by
acquirer
bank with
other
stakeholders
in the digital
payment
ecosystem,
as this also
comes under
the purview
of the
Gazette
notification
issued to
notify the
Incentive
scheme for
promotion of
RuPay Debit
Cards and
low value
BHIM-UPI
transactions
(Scheme in
short).


announcement (FY 2021-22), to give
further boost to digital transactions in
the country.
 It was decided by government to
incentivise the acquiring banks by way
of paying percentage of value of RuPay
Debit card transactions and low value
BHIM UPI transactions for a period of
one year w.e.f. April, 2021.
 Further, in the same Gazette
notification, it has been notified that the
incentive will be shared by the
acquiring banks with other
stakeholders.
 Under the said scheme, the Government
has paid incentive for FY2021-22 and
is in process of making Q4 FY2022-23
payment.
 To boost the digital transactions,
government is incentivizing the
acquiring banks by way of paying
percentage of value of RuPay
Debit card transactions and low
value BHIM UPI transactions.
 Applicability of GST on the
incentive paid by MeitY to
acquiring banks under the said
incentive scheme was examined in
the 48th GST Council meeting held
in December, 2022.
 Based on the recommendations of
the 48th GST Council meeting, it
was clarified that incentives paid
by MeitY to acquiring banks under
the said scheme are in the nature
of subsidy and thus not taxable.
 The instant request is for
clarification regarding incentive
amount that is further shared by
acquiring bank with other
stakeholders in the digital payment
ecosystem.
 As per Section 10A of Payments
and Settlement Act, 2007, no bank
or system provider shall impose,
whether directly or indirectly, any
charge upon a person making or
receiving a payment by using the
electronic modes of payment
prescribed under section 269SU of
the Income Tax Act, 1961 and
debit card powered by RuPAY,
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BHIM UPI are notified under said
section.
 The gazette notifications dated 17th
December 2021 and 14th January
2023 issued by MeiTY state that
the incentives will be shared by the
acquiring banks with other
payment system participants and
the payment system operator, in
the proportion and manner decided
by NPCI in consultation with the
participating banks.
 However, under the preview of the
Incentive Scheme FY2021-22 and
2022-23, no specific guidelines
have been issued for Payer
Payment Service Providers (PSPs)
(typically banks) to share
incentives with Third Party
application Providers (TPAPs) at a
specified rate. The sharing of
incentive is determined by the
business agreement between the
payer PSP and TPAP.
 The incentive given by the
government to acquiring banks has
already been clarified as being in
the nature of subsidy and the same
is being shared with stakeholders.
 The portion of the incentive to be
shared with the stakeholders is not
income of the acquiring banks and
has to be shared with the
stakeholders on the proportions as
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decided by the NPCI in
consultation with the acquiring
banks and stakeholders.
 The acquiring bank is merely
acting as a single point for the
government to disburse the
incentive scheme.
 Fitment committee recommended
to issue a clarification that further
sharing of the incentive, where
such incentive is clearly defined
under Incentive scheme for
promotion of RuPay Debit Cards
and low value BHIM-UPI
transactions and is decided in the
proportion and manner by NPCI in
consultation with the participating
banks is not taxable.
8. To clarify
whether GST
is applicable
on the
statutory
collections
made by the
Real Estate
Regulatory
Authority
(RERA) in
accordance
with the Real
Estate
(Regulation
and
 RERA is a statutory authority
established under Real Estate
(Regulation and Development) Act,
2016 enacted by the Parliament for the
regulation and promotion of the real
estate sector with a mandate to discharge
its statutory functions prescribed in the
above Central Act and the Rules and
Regulations made by the respective
state/ UT government.
 Under the said regulation, real estate
projects and real estate agents have to
get themselves registered with RERA for
which RERA get a registration/renewal
fee. RERA also collects penalty in case
of failure to register or acting in
 This issue was deferred by the 52nd
Council meeting held on
07.10.2023. During the meeting, it
was recommended by Hon’ble
Minister of Maharashtra to call the
representative of the RERA
authorities to the fitment
committee so that they can explain
their views on the issue.
 Accordingly, representatives of
RERA were called and they gave
detailed representation on the
issue.
 Earlier there was no single
regulator to ensure compliances of
the sanctions granted by Urban
Agenda for 53rd GSTCM Volume 2
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Development
) Act, 2016.

contravention of the provisions of the
Real Estate (Regulation and
Development) Act, 2016.
 The fees collected get credited to the
Real Estate Regulatory Fund and all the
penalties get credited to the consolidated
fund of the states.
 The statutory function of regulating the
real estate development and construction
of the building entrusted to the RERA
falls squarely under Entry No.1 and 2 of
the Twelfth Schedule of the Indian
constitution read with Article 243W, as
below:
o Urban planning and town planning;
o Regulation of land-use and
construction of buildings.
 Services by Central Government, State
Government, Union territory, local
authority, or a governmental authority
by way of any activity in relation to any
function entrusted to a municipality
under Article 243W of the constitution
is exempt from levy of GST vide entry
4 of the notification No.12/2017-CTR.
 RERA can revoke the registration
under Section 7 (b) of the Act, if a
promoter violates any of the terms or
conditions of the approval given by the
competent Authority and get the
remaining works carried out under
section 8.
 RERA can authorise transfer of a
project from one promoter to another
and Town Planning bodies and
designated adjudicator for
redressal of consumer disputes. To
fill this crucial functional gap, a
single regulatory authority with
statutory powers, i.e. RERAs were
conceived through the Real Estate
(Regulation and Development)
Act, 2016.
 The main functions of RERA are
to ensure compliance of
obligations cast upon the
promoters under this Act including
Town planning, monitor progress
of construction of Projects till their
completion and to adjudicate
cases.
 Entry 4 of notification
No.12/2017-CTR dated
28.06.2017 exempts “services by
Governmental Authority by way of
any activity in relation to any
function entrusted to a
municipality under article 243W of
the constitution”.
 Governmental Authority has been
defined as “an authority or a
board or any other body,––
o set up by an Act of
Parliament or a State
Legislature; or
o established by any
Government
with ninety per cent or more
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and it also ensures that a project shall
be developed and completed by the
promoter in accordance with the
sanctioned plans, layout plans and
specifications as approved by the
competent authority.
 Under Section 32 of the RERD Act,
RERAs render advice to the appropriate
government in matters relating to the
development of the Real Estate Sector.
 Certain CGST authorities in a few
states have initiated proceedings to
assess GST liability on RERA's
statutory collections. This has raised
concerns among the association
members, who are entities regulated
under the Central Act. No. 16 of 2016.
participation by way of equity or
control, to carry out any function
entrusted to a municipality under
article 243W of the Constitution.”
 RERA has claimed that their
statutory function of regulating the
real estate development and
construction of the building
entrusted to them falls squarely
under Entry No.1 and 2 of the
Twelfth Schedule of the Indian
Constitution.
 S. No. 1 and 2 of the 12th Schedule
of the Constitution reads as under:
o Urban planning and town
planning;
o Regulation of land use and
construction of buildings.
 The functions and powers of
RERA indicates that RERA
ensures, actual implementation of
Urban Planning and Town
Planning in the Real Estate
Projects.
 RERA performs statutory function
of regulating the real estate
development and construction of
the building entrusted to them
which fall under Entry No.1 and 2
of the Twelfth Schedule of the
Indian constitution.
 Real Estate Regulatory Authority
(RERA) being an authority set up
by an Act of Parliament, viz., The
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Real Estate (Regulation and
Development) Act, 2016 (RERD
Act), is a ‘governmental authority’
as per above definition mentioned
in the exemption notification.
 Fitment Committee recommended
to clarify by way of a circular that
RERA is covered under the scope
of entry number 4 of notification
No. 12/2017-CT(R).
9
.
(i) To clarify
whether
service by
way of hostel
accommodati
on, service
apartments/
hotels
booked for
longer period
is a service
of renting of
residential
dwelling for
use as
residence
and
exempted as
per entry no.
12 of the
notification
No. 12/2017-
CT (Rate)
dated
 The accommodation services under
heading 9963 by a hotel, inn, guest
house, club or campsite by whatever
name called, having declared tariff of
a unit below one thousand rupees per
day or equivalent were exempt till
17.07.2022 vide entry no. 14 of the
notification No. 12/2017-CT(R) dated
28.06.2017.
 Vide the latest amendment notification
No. 04/2022- CT(Rate) dated
13.07.2022, the exemption to hotel
accommodation having per day
charges below Rs. 1000/- has been
withdrawn w.e.f. 18/07/2022 and the
said supply is now made taxable at
12% by the notification No. 03/2022-
CT (Rate) dated 13.07.2022.
Currently, hotel accommodation
having value of supply less than or
equal to Rs. 7500 per unit per day
attracts 12% whereas those having
value of supply more than Rs. 7500
per unit per day attracts 18%.
 This issue was deferred in the
52nd GST Council meeting held
on 07.10.2023.
 Vide Sl. No. 66 of notification
No. 12/2017 – CTR, no GST is
payable on hostel fee or rent
collected by educational
institutions whether private or
Government including schools,
colleges, and universities, from
students living in their hostels.
 However, hostels operated
privately which do not belong to
any educational institutions have
to pay GST as applicable. They
are exempt upto threshold
turnover of Rs. 20 lakh.
 Earlier, hotel accommodation
having tariff of Rs. 1000 per day
or less was exempt from GST.
Private hostels charging Rs.
30000 or less per month were
availing benefit of this
exemption.
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28/06/2017.

(ii) Request
for GST
exemption
on hostels for
poor and
middle-class
students run
by charitable
trusts.
 Circular No. 354/17/2018-TRU dated
12.02.2018 at its point no. 11 has
considered the hostel accommodation
at par with the hotel accommodation.
The said clarification reads as below:
Hostel accommodation services do not
fall within the ambit of charitable
activities as defined in para 2(r) of
notification No. 12/2017-CT (Rate).
However, services by a hotel, inn,
guest house, club or campsite, by
whatever name called, for residential
or lodging purposes, having declared
tariff of a unit of accommodation
below one thousand rupees per day or
equivalent are exempt. Thus,
accommodation service in hostels
including by Trusts having declared
tariff below one thousand rupees
per day is exempt. [Sl. No. 14 of
notification No. 12/2017-CT(Rate)
refers]
 However, in the case of Taghar
Vasudeva Ambrish, in WP No.
14891 of 2020, the Hon’ble
Karnataka High Court at para 12 of
the judgment, while reproducing the
meaning of ‘residential dwelling’
has observed that “in normal trade
parlance residential dwelling means
any residential accommodation and
is different from hotel, motel, inn,
guest house, etc. which is meant for
temporary stay.” In para 13, the
 Based on the recommendations of
GoM on rate rationalization in the
47th GST Council meeting held
in June, 2022, this exemption in
respect of hotel accommodation
having tariff of Rs. 1000 or less
per day was withdrawn with
effect from July, 2022.
 Thereafter private hostels started
claiming exemption applicable to
renting of residential dwelling for
use as residence, as per entry at
Sl. No. 12 of notification No.
12/2017 - CTR.
 The Hon’ble Karnataka High
Court order dated 03.02.2022 in
the case of Taghar Vasudeva
Ambrish held that residential
dwelling includes hostels. An
appeal has been filed and is
pending before Hon’ble Supreme
Court of India.
 As per Annexure to notification
No. 11/2017- CTR dated
28.06.2017, accommodation
services provided by Hotels, Inn,
Guest houses, Clubs & the like
are classified under SAC 9963.
Other accommodation services
such as student residences,
hostels, Camps, Paying Guest and
the like are also classified under
the same heading. The said
entries reads as below:
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court has noted that “in hostels, the
duration of stay is more as compared
to hotel.” And later in para 14, it
came to conclusion that “it cannot
be held that the residential dwelling
does not include hostel which is used
for residential purposes by students
or working women.” Thus, the court
has held the service of hostel
accommodation as the services by
way of renting of residential
dwelling for use as residence.
 Entry no. 12 of notification No.
12/2017-CT (Rate) dated
28.06.2017 exempts the services by
way of renting of residential
dwelling for use as residence.
Therefore, if the hostel
accommodation is considered as the
hotel accommodation, in line with
the circular dated 12.02.2018 issued
by CBIC, it is taxable service and if
it is considered as residential
dwelling, as held by the Hon’ble
Karnataka High Court, it is an
exempt service. If the ratio of
‘temporary stay’ applied by Hon’ble
Karnataka High Court, is considered
then it may initiate some more legal
disputes in case of taxation on
Service apartments, which were
usually booked by the companies for
a considerably longer period.
 Further, services provided by an
“Group 99631
Accommodation services
996311 - Room or unit
accommodation services
provided by Hotels, Inn,
Guest House, Club and the
like
996312 - Camp site services
996313 - Recreational and
vacation camp services.
Group 99632 Other
accommodation services
996321 - Room or unit
accommodation services for
students in student
residences
996322 - Room or unit
accommodation services
provided by Hostels, Camps,
Paying Guest and the like
996329 - Other room or unit
accommodation services
nowhere else classified”
 Heading 9972 includes real estate
services involving owned or
leased property. It includes rental
or leasing services involving own
or leased residential property that
are primarily residential and
excludes accommodation services
provided by operating hotels,
motels, rooming houses, school
dormitories, camp sites and other
lodging places.
Agenda for 53rd GSTCM Volume 2
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education institution to its students,
faculty and staff are already exempt
from payment of GST vide Sl.
No.66 of the notification No.
12/2017-CTR. Hence, hostel
facilities wherever provided by
an educational institution to its
students, faculty and staff are
covered under this exemption.
 The said entries in Annexure to
notification No. 11/2017 -CTR
reads as below:
“Heading 9972 - Real estate
services
Group 99721 - Real estate
services involving owned or
leased property
997211 - Rental or leasing
services involving own or
leased residential property”
 Further, in the Explanatory notes
to the Scheme of Classification of
Services, it is clearly mentioned
that the service code 997211 does
not include accommodation
service such as school dorms etc.
The relevant extract is placed
below:
“997211 Rental or leasing
services involving own or
leased residential property.

This service code includes
rental or leasing services
concerning residential
properties by owners or lease
holders houses, flats,
apartment buildings, multiple
use buildings that are
primarily residential,
residential mobile home sites.

This service code does not
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include: - accommodation
services provided by
operating hotels, motels,
rooming houses, school
dormitories, camp sites and
other lodging places,
cf.99631”
 Service by way of hostel
accommodation, service
apartments/ hotels are not
classified under heading 9972 and
thus, it is not a service of renting
of residential dwelling for use as
residence which is exempt under
entry no. 12 of the notification
No. 12/2017-CT (Rate) dated
28/06/2017.
 There is no exemption for hostels
run by charitable trusts or
religious institutions at present.
However, renting of rooms
having charges less than Rs.
1000/- per day, in religious
precincts by a registered
charitable or religious trust is
exempt from GST vide entry at
Sl. No.13 of notification No.
12/2017-Central Tax (Rate) dated
28.06.2017.
 Fitment Committee
recommended that:
(i) A new entry may be inserted
under Heading 9963 in the
exemption notification to exempt
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supply of accommodation
services upto Rs.15000/- per bed,
per person per month provided
the accommodation service is
supplied for a minimum
continuous period of 90 days.
(ii) An explanation may be inserted
in Sl. No. 12 of notification No.
12/2017-CT(R) dated 28.06.2017
which exempts services by way
of renting of residential dwelling
for use as residence as below:
“Explanation,- Nothing contained
in this entry shall apply to:
o accommodation services
for students in student
residences; and
o accommodation services
provided by Hostels,
Camps, Paying Guest
accommodations and the
like.
(iii) Chapter heading 9963 may be
deleted from Column No. 2 in the
Sl. No. 12 in the notification No.
12/2017- CT (R).







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e) Issues where no change has been proposed by the Fitment Committee in relation to services
Annexure-V

Sl.
No.
Proposal Details of Request Discussions in Fitment Committee and its
recommendations
1. To give
retrospective
effect to the
amendment
carried out in
notification No.
17/2017-CTR
vide which bus
operators
organized as
companies
were excluded
from purview
of section 9(5)
of CGST Act,
2017.


 W.e.f. 01.01.2022, the
Government vide
notification No. 17/2021-
Central Tax (Rate), dated
18th November 2021 made
ECO liable to pay GST
under Section 9(5) of
Central Goods and
Services Tax Act, 2017 in
respect of services by way
of transportation of
passenger by any motor
vehicle.
 Pursuant to the aforesaid
tax position, with effect
from 1st January 2022, the
liability to pay GST in
respect of passenger
transport services provided
by way of buses was
shifted from the applicant
to the ECO in terms of
Section 9(5) of the CGST
Act.
 Therefore, with the said
amendment, the tax which
was used to be collected by
the ECO and was used to
be reimbursed to the
applicant, who thereafter
 With effect from 1st January 2022,
liability to pay GST on bus transportation
services supplied through Electronic
Commerce Operators (ECOs) has been
placed on the ECO under section 9(5) of
CGST Act, 2017.
 This trade facilitation measure was taken
on the representation of industry
association that most of the bus operators
supplying service through ECO owned
one or two buses and were not in a
position to take registration and meet GST
compliances.
 Based on the request received from two
bus operators who run the electronically
operated buses and in order to arrive at a
balance between the need of small
operators for ease of doing business and
the need of large organized players to take
ITC, 52nd GST Council recommended that
bus operators organised as companies
may be excluded from the purview of
section 9(5) of CGST Act, 2017.
 This would enable them to pay GST on
their supplies using their ITC.
 Accordingly, amendment was carried out
to notification No. 17/2017-CTR w.e.f
20.10.2023 with prospective effect.
 The applicant has approached the Hon’ble
Delhi High Court for giving retrospective
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used to utilise the ITC
availed on its inward
supplies to pay the outward
tax liability, was no longer
able to utilise the ITC that
4 was statutorily available
to him. Thus, effective
from 01.01.2022 huge ITC
was being accumulated
with the applicant and the
same has been becoming
cost to the Applicant.
 After having been facing
serious financial
difficulties on account of
ITC becoming cost of the
applicant, the applicant
submitted representations
dated 21.04.2022 and
23.05.2022, explaining the
difficulties being faced by
them due to the aforesaid
amendment.
 The issue raised by the
applicant in the
representations was
considered by the GST
Council in the 47th and
48th Council Meetings.
Ultimately, the
Government issued the
Notification No. 16/2023 -
Central Tax (Rate) dated
19.10.2023 amending
effect to the amendment carried out in
notification No. 17/2017-CTR on
recommendations of the 52nd GST
Council.
 The Hon’ble Delhi High Court has vide
interim order dated 04.04.2024 directed to
dispose of the representation of the
petitioner within four weeks of the order.
 The applicant/petitioner in representations
have not only asked to give retrospective
effects to the amendment carried out vide
Notification No.16/2023 - Central Tax
(Rate) dated 19.10.2023 but also has
requested to suitably amend the GST
portal so that the lTC accumulated during
the period 01.01.2022 to 19.10.2023 be
transferred to the ECO or refund of the
ITC accumulated during the period of
01.01.2022 to 19.10.2023 be given to the
applicant/petitioner.
 There are no provisions in CGST Act to
transfer the ITC of the bus operators
available with them to ECO.
 Fitment Committee recommended that the
request may not be accepted.

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Clause (i) of the
Notification No. 17/2017 -
Central Tax (Rale) dated
28.06.2017. However, the
said amendment was given
prospective effect from
20.10.2023.
 The prospective effect
given to the amendment
has not completely
resolved the difficulties
which the applicant has
been facing on account of
original amendment
carried out in Notification
No. 17/2017 - Central Tax
(Rate) dated 28.06.2017
w.e.f 01.01.2022. The
amendment has resolved
grievance of the applicant
from 20.10.2023 onwards,
however, the serious
financial blockage of the
applicant with regard to
the ITC which has been
accumulated during the
period of 01.01.2022 to
19.10.2023 has not been
resolved.
 Therefore, retrospective
effect may be given to the
amendment carried out in
notification No. 17/2017-
CTR.

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Agenda Item 5: Issues recommended by GSTN

Agenda Item 5(a): All India roll-out of the Biometric-based Aadhaar Authentication and
Document Verification System.

The Officers across India have encountered cases involving fake billing embedded with the issue of
bogus registrations carried out through impersonation and other forms of misrepresentation. The
modus operandi employed in these impersonations typically involves:
i. Procuring government-approved identity documents such as Aadhaar and PAN cards under
false pretence, such as offering loans or incentives.
ii. Manipulating mobile numbers associated with the IDs to facilitate OTP validations.
iii. Availing bogus GST registrations using these documents without the knowledge or consent
of the rightful owners.
iv. Loaning of identity for consideration by poor people.
2. To contain the above, it is suggested to establish a risk-enabled biometric-based
authentication system as a preventive measure, which can control 3 out of above 4 scenarios
effectively. A pilot for risk-based Biometric Aadhaar Authentication of GST registration applicants,
as directed by GST Council, was launched in the States of Gujarat, Andhra Pradesh, and
Puducherry as a preventive measure to address the issue. The initial feedback of trade and field
formations indicates that
3. It is a positive step towards mitigating fake registration and preventing the issuance of fake
invoices by unscrupulous persons engaged in dubious and fraudulent transactions.
The study from Gujrat on the efficacy and efficiency of the system indicates a significant reduction
(25% approximately in Gujarat) in new registration applications in these States after
implementation of risk-based biometric-based Aadhaar Authentication of GST registration.
Further, a large number of applicants have failed to appear for biometric authentication, after being
selected for it.
4. This indicates that the biometric authentication process is effective in filtering out taxpayers
at the initial stage and is a deterrent for non-genuine taxpayers.
In addition, GSTN has also developed an advanced system of facial recognition-based Aadhaar
Authentication (Face authentication) alongside Fingerprint/Iris scans. This system can give
flexibility in the biometric authentication
5. GSTN has conducted virtual meetings with nearly all states and UTs, sharing detailed
requirements with them for rolling out this functionality & training to State and UT officers in two
batches on 19/06/2024 and 20/06/2024, in New Delhi.



Agenda for 53rd GSTCM Volume 2
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Road Map for implementation:
6. The Biometric-based Aadhaar authentication process predates assignment of jurisdiction i.e.
before generation of ARN. Keeping in mind the recent migration of CBIC field formations and that
States also need time to set up GSK along with the procurement of infrastructure for the GSK; the
following Phase-wise implementation approach toward rollout is suggested subject to the changes
in law and preparedness of the States/UTs.

Phase Period Remarks
Phase 1 Last week of June 2024 At present, Uttarakhand State has shown
willingness for this phase
Phase 2 Last week of July 2024 As per the preparedness of the States/UTs
Phase 3 First week of Aug 2024 As per the preparedness of the States/UTs
Phase 4 Last week of Aug 2024 As per the preparedness of the States/UTs

It is also planned to roll out Face authentication alongside the Fingerprint/ Iris based Biometric
authentication for pilot in smaller states and UTs, as mentioned below:
Approval Required:
a. Biometric-based Aadhaar authentication be expanded across all states and Union Territories
in phases and GSTN may work with GST Council about the roll out plan of Biometric
verification and pilot project regarding Face Authentication
b. GST (PW), CBIC may issue notifications, as may be required.
Agenda for 53rd GSTCM Volume 2
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Agenda Item 5(b): Waiver of Interest on delayed receipt of Advance User Charges
(AUC) from a few states and CBIC.

1. Background

i. As per the Revised Revenue Model of GSTN approved in 49 th GST Council meeting, the
cost incurred on the project along with GSTN’s own expenses are shared equally by the
Centre and States in the form of User Charges to be remitted by them in two (2)
installments on a half-yearly basis by 31st March and 30th September of the year
respectively or any other date as decided by GSTN, of the financial year in which the
demand letters are issued for the next financial year.

ii. Further, as per Para 2 (vi) (c) of the Revised Revenue Model “Any Government that fails to
pay the Advance User Charges (AUC) before the due date will pay the defaulted amount
together with interest @12% p.a.”. The copy of Revised Revenue Model has been attached
as Annexure-I.

2. Status of Payment of AUC as on 14
th
June 2024

As per the approved Revenue Model, GSTN had raised demand for the payment of AUC to the
Central and State Governments for the FY 2022-23 and 2023-24. The status of AUC demanded and
received (as on 14th June 2024) is given below:
(Rs. in Crores)
Financial Year
Amount
demanded
Amount
received
Amount
Pending
Pending States
2022-23 (Opex) 296.54 296.54 - NIL
2022-23 (Capex) 631.64 631.64 - NIL
2023-24 (Opex) 85.50 77.93 7.57 As per Annexure – II
2023-24 (Capex) 443.32 412.38 30.94 As per Annexure - II






Agenda for 53rd GSTCM Volume 2
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3. Waiver of Interest on late payment of AUC for FY 2022-23 and 2023-24

Late payment of AUC for FY 2022-23
The request letter for Advance User Charges for Opex (1st Instalment) was issued on 29th
March 2022 and Request letter for Advance User Charges for Capex was issued on 02nd
January 2023, post approval of Revised Revenue Model by GST Council.
The interest on delay remittance of AUC has been worked out post due date i.e. 01st June
2022 and 31st March 23 respectively for Opex and Capex.
The interest payable on the delay remittance of AUC (Opex + Capex) has been worked out
as Rs.27.61 Crores, the interest is calculated considering the rate of interest @12%, as per
the Revised Revenue Model. The working of interest is attached Annexure-III.
Late payment of AUC for FY 2023-24
The request letter for Advance User Charges for Opex and Capex was issued on 21st
September 2023.
The interest on delay remittance of AUC has been worked out post due date i.e. 30th
November 2023.
The interest payable on the delay remittance of AUC (Opex + Capex) has been worked out
as Rs.15.56 Crores, the interest is calculated considering the rate of interest @12%, as per
the Revised Revenue Model. The working of interest is attached Annexure-III.

4. Proposal:

Following proposal is submitted for the kind consideration and approval of the Council:

i. The interest payable by the respective Governments of Rs.27.61 Crores for FY 2022-23 and
Rs.15.56 Crores for FY 2023-24 till 14th June 2024 may be waived off.

ii. GST Council may direct that States and Central Government may pay their dues in time.

Agenda for 53rd GSTCM Volume 2
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Annexure – I
Revised Revenue Model of GSTN

1) Sharing of User Charges between Centre and States:

i. The GST System infrastructure managed by GSTN will be used by taxpayers, tax
administrations, banks etc. but the user charges will be paid entirely by the Central
Government and the States Governments in equal proportion i.e. 50:50 on behalf of
all the users. The States share will be apportioned to individual States in proportion
to the number of active dealers in the respective States at the end of period
(month/quarter/year). For calculation of the Advance User Charges, number of
active dealers in the States as on 31st December of the previous year or any date
specified by GSTN will be considered.
2) Total Expenses (Capex and Opex):

i. On 1st January or a suitable date, of every financial year, GSTN will issue demand
letters for payment of Advance User Charges for the next financial year to the
Central and the States Governments.

ii. Advance User Charges will be paid by the respective Governments in two equal
instalments. First Instalment will be paid on or before 31s March or any other date
as decided by GSTN, of the financial year in which the demand letters are issued for
the next financial year. Second Instalment will be paid on or before 30th September
or any other date as decided by GSTN, of the relevant financial year for which the
demand is raised.

iii. Advance User Charge for the next year will be comprised of the following
components:
Agenda for 53rd GSTCM Volume 2
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a. Operating expense payments to be made to the Managed Service Provider next
financial year-(as per contract).
b. Payments of Revenue Expenditures to be made in the next financial year on
account of Change Request issued to MSP or any Service provider.
c. Payments of Revenue Expenditures to be made in the next financial year on
account of new projects/activities based on the new requirements.
d. GSTN's own estimated annual operational expenditure for the next financial years.
e. Capital expenditure.
f. Amount of Interest Cost payable to the bank in the next financial year, if any.
g. Guarantee fee payable to the GoI next financial year, if any.

iv. Amount calculated above will be apportioned to Centre and States Government in the
ratio of 50:50 and portion of the States Governments will be apportioned between the
States on the basis of number of active dealers in the respective State.

v. GSTN will raise the user charges bills periodically (monthly /quarterly/half
yearly/annual ) as per below mechanism:

a. Bills for the use of GST Portal and Services (the Front End):
i. For this purpose, the periodic per dealer user charge will be calculated by
subtracting the revenue expenses on backend system as per contract from total
revenue expenses (including depreciation) and dividing this amount by two
(since this expense is to be shared equally by the Central and State
Governments) and further dividing the amount so obtained by total number of
active dealers.
ii. Bill for the Central Govt. will be raised by multiplying per dealer periodic
charges as derived above with the total number of active dealers as on the last
day of the period.
iii. Bill for each State Govt. will be raised by multiplying per dealer periodic
charges as derived above with the numbers of active dealers of the respective
State as on the last day of the period.




Agenda for 53rd GSTCM Volume 2
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b. Bills for the use of Back End of GST System:
i. For this purpose, per dealer user charge will be calculated by dividing total
revenue expenses on backend system as per contract by total number of active
dealers in Model-2 states.
ii. Bill for each Model 2 state will be raised by multiplying per dealer user charge
as derived above with the number of active dealers in that state as on the last
day of the period.

vi. The amount of these bills will be set off against the advance user charges paid by the
respective Government in the manner indicated below:

a. If the advance user charges paid by a Government exceeds the total amount of the
bills for the year, the excess amount will be adjusted against the advance payment
to be made by that Government for the next year.
b. If the advance user charges paid by a Government is less than the total amount of
the bills for the year, the amount of shortfall will be paid by that Government by
30th April of the following year.
c. In case States/centre fails to pay the Advance users charges within stipulated time,
interest will be levied @12% per annum on the due amount.

3) Working Capital Requirements:

i. GSTN will raise demand letters for Advance User Charges post finalization of Annual
Budget for the next financial year. GSTN will request the Governments to pay
Advance User Charges in two equal instalments with the interval of six months. For
smooth functioning of the GST System Project (including e-way bill and e-invoicing),
GSTN would require sufficient funds in advance atleast for the next six months of
operations.

ii. In case, requirement of additional working capital requirement arises in future, the
Governments would be approached for the additional amount.



Agenda for 53rd GSTCM Volume 2
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4) Treatment of Interest earned on Surplus Funds:

i. Interest earned on the surplus funds available with GSTN will be apportioned
between the Governments and adjusted against the invoices on the basis of weighted
average balance of Advance User Charges received from the respective Governments
during the years.

5) Credit Facility from the Commercial Banks:

i. GSTN would continue to keep the Credit Facility to the tune of Rs. 500 Crore from
the commercial banks to cater the emergency needs of either Capital Expenditure or
Revenue Expenditure. Such Credit Facility would be backed by the Government
Guarantee.


Annexure-II

(Rs. In Crores)
Detail of outstanding Advance User Charges of FY 2023-24 as on 14th June 2024
Sl.
No.
Centre/ States/ UTs Opex Capex Total
1 Tamil Nadu 4.41 17.60 22.01
2 Andhra Pradesh 2.67 4.94 7.61
3 Punjab - 5.00 5.00
4 Gujarat - 1.89 1.89
5 Goa 0.22 0.66 0.88
6 Nagaland - 0.16 0.16
7 Sikkim - 0.17 0.17
8 Mizoram 0.07 0.12 0.19
9 Ladakh 0.19 0.13 0.32
10 Arunachal Pradesh 0.01 0.27 0.28
Total 7.57 30.94 38.51


Agenda for 53rd GSTCM Volume 2
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Annexure-III
Goods and Services Tax Network (Rs. In Crores)

Calculation of Interest on pending or delayed payment of Advance User Charges as on 14th June 2024
2022-23 2023-24
Sl. No. CENTRE/STATE/ UT Opex Capex Opex Capex
1 Central Government - 10.40 0.79 7.14
2 Andaman & Nicobar - 0.01 0.004 0.003
3 Andhra Pradesh 0.48 0.39 0.17 0.40
4 Arunachal Pradesh 0.01 0.03 0.001 0.02
5 Assam 0.02 - - 0.14
6 Bihar 0.65 1.54 0.32 0.33
7 Chandigarh - 0.004 - 0.02
8 Chhattisgarh 0.04 0.43 - 0.08
9 Daman & Diu and Dadra &
Nagar Haveli
0.001 0.02 - 0.002
10 Delhi 0.01 0.45 - 0.36
11 Goa 0.01 0.14 0.01 0.04
12 Gujarat 1.26 2.56 0.17 0.59
13 Haryana 0.12 0.02 0.16 0.31
14 Himachal Pradesh 0.03 - 0.01 0.05
15 Jammu & Kashmir - 0.05 0.03 0.10
16 Jharkhand 0.20 - 0.01 0.02
17 Karnataka - - 0.05 0.11
18 Kerala 0.16 0.84 0.02 0.25
19 Ladakh 0.01 - 0.01 0.01
20 Lakshadweep - - - 0.000
21 Madhya Pradesh 0.19 0.02 0.10 0.32
22 Maharashtra 0.49 0.02 - -
23 Manipur 0.01 0.02 - 0.01
24 Meghalaya 0.01 0.03 - 0.02
25 Mizoram 0.01 0.02 0.005 0.01
26 Nagaland 0.01 0.03 - 0.01
27 Puducherry 0.002 - - 0.01
28 Punjab 0.15 0.28 0.03 0.36
29 Rajasthan 0.08 0.21 0.01 0.24
30 Sikkim 0.01 0.03 0.01 0.01
31 Tamil Nadu 0.83 3.41 0.29 1.14
32 Tripura 0.002 - 0.001 0.01
33 Telangana 0.21 1.39 - 0.31
34 Uttar Pradesh 0.003 - 0.18 0.73
35 West Bengal - 0.24 - 0.05
Total 5.01 22.59 2.37 13.18
27.61 15.56



Agenda for 53rd GSTCM Volume 2
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Agenda Item 6: Recommendations of the 20
th
meeting of the IT Grievance Redressal
Committee for approval/decision of the GST Council:

The 20th meeting of the IT Grievance Redressal Committee (ITGRC) was held on 12 th January, 2024
at 4.00 PM in online mode to resolve the grievances of the taxpayers arising out of the technical
problems faced by them on the GSTN portal in relation to GST Compliance filings.
The agenda for the 20th ITGRC meeting covered the following issues:
1. Technical Issues requiring data fixes through back-end utilities
2. Any other agenda with the permission of the chair
2. Recommendations of ITGRC on Data Fix issues:
As per the SOP approved in the 45th GST Council meeting for Technical issues requiring data fix of
the processed incorrect data through backend utilities, GSTN presented 38 issues which required data
fixes for the consideration of ITGRC during its 20th meeting.
2.1 ITGRC took note of the data fixes carried out by GSTN in 21 issues impacting 11,387 cases
which were technical issues with no financial implication where correct data was known (Category-1
of the approved SOP).
2.1.1 In the cases mentioned above in Category-1 (Technical issues having no financial implications
where correct data is known), ITGRC recommended that:
i) In cases where end user was not able to see list of newly added Additional Place of Business
(APOB) in amended Registration Certificate as database transaction was not getting completed
within optimized time limit, as a result of master tables not getting updated and this was
happening with large firms who are adding 400+ APOB in one go, GSTN would do permanent
fix for cases where Registration Certificate was not displaying more than 400 additional places
of business, in the next three months.
ii) In cases where the system did not permit Aadhaar authentication by foreign nationals, GSTN
would carry out data fix permitting Aadhaar Authentication of foreign nationals to be
implemented by June, 2024.
2.2 For the 12 technical issues pertaining to Category-2 (Technical issues where there were
financial implications and the correct data was known), ITGRC took note of the data fixes carried out
by GSTN in all 76,546 cases involving an amount of Rs. 4,894 crores.
2.2.1 In the cases mentioned above in Category-2 (Technical issues having financial implications
where correct data is known), ITGRC recommended that:
i) In cases where Electronic ITC ledger had been credited while filing TRAN-2 and the same
had been utilized by taxpayers before verification by officers, GSTN would send list of these
cases to the jurisdictional officers for checking the interest liability.
ii) In cases where there was Data mismatch issue between Hbase & Ledger in GSTR-3B, of
possible short payment of about Rs. 4,823 crore, GSTN would send list of the same to the
jurisdictional officers by 15.1.2024 for necessary action.
Agenda for 53rd GSTCM Volume 2
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iii) In cases where recovery of partial refund amount of Rs. 6.47 lakh sanctioned to the taxpayers
was pending that had to be transferred to Consumer Welfare Fund, GSTN would monitor till
recovery.
iv) In case of System generated IGST refund applications (RFD 01s) for the duplicate records
sent by ICEGATE and Rs. 2.38 crore be recovered from the taxpayers, GSTN would keep
reporting the status till recovery.
ITGRC noted that an amount of Rs. 98.96 crore has been recovered/reversed, Rs. 5,500/- had
been refunded and an amount of Rs. 2.44 crore is pending recovery.
2.3 ITGRC also took note of the data fixes carried out by GSTN in case of 3 Court Directions
impacting 18 cases.
2.4 2 cases were presented during the meeting. One was request in case of M/s Deoria Papers
Mills Ltd to-reopen GST Portal to file TRAN forms and other was issue related to adjustment of
excess tax paid with RCM liability. ITGRC approved the opening of TRAN forms for M/s Deoria
Papers Mills to enable them to file the same. The second issue was deferred till the next meeting of
the ITGRC.
The recommendations of ITGRC as per attached Minutes of the 20 th meeting of the ITGRC are placed
for information of the GST Council as Annexure – A (attached).
The GST Council may approve the recommendations of the ITGRC and the data fixes carried out by
GSTN as mentioned in Para 2 above.


Agenda for 53rd GSTCM Volume 2
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Annexure-A
Minutes of the 20
th
Meeting of the IT Grievance Redressal Committee (ITGRC) held on
12.01.2024
The 20th meeting of the IT Grievance Redressal Committee (ITGRC) was held in online mode
over WebEx platform on 12th January, 2024 at 04:00 pm. The list of officers who attended the
meeting is attached as Annexure-1. The agenda and annexure to agenda circulated for the meeting is
at Annexure-2.
2. Shri Shashank Priya, Chairman, ITGRC welcomed all the members of ITGRC and invited
EVP, GSTN to proceed with the agenda. Joint Secretary, GST Council Secretariat brought to the
notice of the members of ITGRC that five actionable points were pending from the last ITGRC (19th)
meeting.
3. Shri Dheeraj Rastogi, Executive Vice President, GSTN stated that the agenda items shared
were the issues for which GSTN had carried out data fixes during the period April, 2023 to October,
2023. He stated that the period up to March, 2023 had been covered earlier. Further, he stated that
there was one major issue where GSTN had noticed differences between the Hbase database and the
ledger that are there in the applications; that there were certain technical issues associated with it and
proposed that the same could be taken up towards the end of the meeting. Also, there were two other
issues which were not listed in the agenda as the same had been received just a few days prior to the
meeting and if feasible, could be taken up. One was a VIP reference which had been cropping up
regularly over the past 2-3 months and therefore, GSTN would like to present the same before ITGRC
for a decision on whether data fix needs to be done in this particular case or not, and the other was a
glitch that happened at the time of filing of the returns of a taxpayer which resulted in double debit to
his account and therefore showed excess payment. The taxpayer had tried to make payments from the
extra amount debited since 2017, however, since the tax dues were minor compared to the debited
amount, he was finding it very difficult to offset the whole amount. So, while Rs. 7.50 lakh had been
the excess payment, so far in the last six years, he had been able to deduct only about Rs. 2.50 lakh
from the same. The taxpayer was seeking some data fix so that the remaining amount could be
transferred to his ITC ledger and he could utilize the same.
4. Shri Dheeraj Rastogi, Executive Vice President, GSTN further stated that the agenda for the
meeting consisted of three broad classifications of the issues as per the SOP developed and approved
in the 45th meeting of the GST Council. There were 21 technical issues with no financial implications
where correct data was known with certainty, 12 technical issues affecting locally with financial
implications where data is known with certainty and an agenda on implementation of court directions.
5. EVP, GSTN then proceeded with the presentation (Annexure-3). First the technical issues
having no financial implications were taken up.





Agenda for 53rd GSTCM Volume 2
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6(a) Technical issues having no financial implications where correct data known:
6(a).1
S.
No.

Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
1.
a. User unable to
open core/non-
core amendment
application.
b. End user was
unable to see
newly added
Additional Place
Of Business
(APOB).
c. End user
unable to see
amended
Registration
Certificate.

4 Registration
a. End user is not able to open
fresh core/non-core application
as data from all the master
tables is not getting loaded
within optimized time limit.
This is happening with large
firms who are having high count
of Additional Place of Business.
b. End user is not able to see list
of newly added APOB in
amended Registration
Certificate as database
transaction is not getting
completed within optimized
time limit, as a result master
tables are not getting updated.
This is happening with large
firms who are adding 400+ new
Additional Place of Business
(APOB) in one go.
c. End user is not able to see
amended RC as database
transaction is not getting
completed within optimized
time limit as a result master
tables are not getting updated.
This is happening with large
firms who are adding 400+ new
APOB in one go.

Data fix has been
done on ticket
basis. RQM
26195 has been
generated to
permanently fix
this issue.


Discussion:
Shri Dheeraj Rastogi, EVP, GSTN explained that 4 taxpayers were unable to open core/non-core
amendment application in cases of registration and not able to see the additional places of
business. This was due to a glitch in the application which allowed only up to 400 additional
places of business to be updated in the master tables seen. He then asked Shri Nirmal Kumar,
EVP, GSTN to explain the issue.
Shri Nirmal Kumar, EVP, GSTN stated that this was a technical issue. If the additional place of
business for a taxpayer was more than 400, then the taxpayer was not able to add those
addresses. Further, such addresses were also not appearing in the Registration Certificate because
Agenda for 53rd GSTCM Volume 2
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at the time of generation of the registration certificate, the program had a check of 2 minutes and
the update was taking more than 2 minutes and hence was getting timed out. GSTN is working to
optimize the program and fix the issue. Meanwhile, GSTN had done data fix for the 4 taxpayers.
Chairman, ITGRC enquired how much time GSTN would take to do a permanent fix. EVP,
GSTN stated that this was planned and permanent fix would be done within the next 3 months.
CCT West Bengal stated that the agenda states that data fix had already been done. GSTN
replied that it had been done for the 4 cases mentioned in the agenda.
Decision: ITGRC took note of the data fix done by the GSTN. Permanent fix for cases where
Registration Certificates are not displaying more than 400 additional places of business to be
done in the next three months.
6(a).2
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
2. For a migrated
taxpayer, the
photo of primary
authorised
signatory and
director got
interchanged in
Registration
certificate (RC)
when the TP
applied for a
core-field
amendment.
1 Registration
At the time of migration, member
identifier generated by utility was
not created correctly and as a
result same identifier for two
persons was generated.
Subsequently the taxpayer applied
for core field amendment, photo of
the director got overridden with
photo of director via batch job
which is responsible for RC
generation.
Data fix
done.
Discussion:
EVP, GSTN stated that during migration, when taxpayer was migrated to the new GST platform,
the photo of the primary authorized signatory and director got interchanged. So, it needed a data
fix for swapping the photo of each other and this had been done.
Decision: The ITGRC took note of the data fix carried out by GSTN.
6(a).3
S.
No.

Issue reported No. Of
Cases
Impacted
Module Detailed Description Status
3. Change of effective
date of cancellation
of registration for
GSTIN:
08BOTPK4490J2Z6

1 Registration
A GSTIN 08BOTPK4490J2Z6
has been cancelled with effect
from 31-03-2020 but as per order
of Chief Commissioner State
Tax, Rajasthan the GSTIN
08BOTPK4490J2Z6 was liable to
be cancelled from effective date
Data fix done.
Agenda for 53rd GSTCM Volume 2
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05-06-2018.

Request received from CC, State
Tax, Rajasthan.


Discussion:
EVP, GSTN stated that Rajasthan Tax Department cancelled a taxpayer with effect from 31-03-
2020 but as per the order of Chief Commissioner of State Tax, the taxpayer was liable to be
cancelled from 05-06-2018. So, GSTN had applied the data fix and cancelled the GSTIN with
effect from 05-06-2018 upon request received from Chief Commissioner, State Tax, Rajasthan.
Chairman, ITGRC enquired about the reason for this mismatch. EVP, GSTN stated that the
concerned officer had wrongly chosen the effective date of cancellation as 31-03-2020 instead of
05-06-2018.
CCT, West Bengal stated that this was adversely going to affect the taxpayer. It was clarified that
the order was effective from 5.6.2018 and there was an error by the officer in choosing effective
date of cancellation.
On being asked by the Joint Secretary, GST Council Secretariat about the financial implications
in this case, GSTN stated that for invoices issued in the intervening period, credit would get
transferred if the date was not changed in the system. Once the date was changed to 05-06-2018,
any invoice issued after that date would be marked as invalid and accordingly, would become
ineligible to take credit.
Chairman, ITGRC stated that there was no financial implication in this case in respect of the
taxes to be paid.
GSTN stated that cases would be classified as having financial implication, where taxes need to
be recovered or there was outgo of taxes.
Decision: ITGRC took note of the data fix carried out by GSTN.
6(a).4
S.
No.

Issue reported No. of Cases
Impacted
Module Detailed Description Status
4. The issue pertains to
the amendment of a
promoter/partner
details of M/S Jay
Ess Kesar
Corporation
(GSTIN-
01AAAFJ7679L1Z3)
1 Registration
At the time of migration to
GST, the taxpayer has
submitted his old inactive
PAN. The old / inactive
PAN has been surrendered
and the new PAN has not
been updated in this GST
registration. The
Data fix done
(Current
amendment
application was
deleted from the
system to allow the
user to file new
Agenda for 53rd GSTCM Volume 2
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. The PAN of an
existing partner was
an Inactive PAN.
And therefore
amendment could
not be filed
functionality to edit PAN is
not available in the portal.
This has put the applicant
in the state of deadlock as
portal does not allow the
amendment in the
partnership of the said
firm.
amendment)


Discussion:
EVP, GSTN stated that in case of M/S Jay Ess Kesar Corporation the PAN of an existing partner
was an inactive PAN and the issue arose when the taxpayer tried to change PAN of another
partner. He stated that at the time of migration of GSTIN in 2017, PAN was not validated. But
when the taxpayer tried to amend the PAN by adding another PAN into the system, all the PANs
were checked and the application got stuck because one of the PAN was inactive PAN. So,
GSTN had applied the data fix and changed the PAN.
Decision: ITGRC took note of the data fix done by GSTN.
6(a).5
S.
No.

Issue
reported
No. of
Cases
Impacted
Module Detailed Description Status
5.
Issue in
registration
end date for
casual
taxpayers
39 Registration
The registration end date of
casual/NRTP taxpayers for
39 users was showing as Null
in the system.
As the end registration date
was null, users were facing
issue in updating invoices for
certain dates in GSTR-1.

Registration
end date was
updated in
master table
via data
fix. For
permanent
fix, RQM
26172 has
been raised.


Discussion:
EVP, GSTN explained that in some cases of non-resident/casual taxpayers, the registration end
date was showing as null in the system. It was some program error and was creating difficulty in
various modules. So, through a data fix, GSTN had put that end date for those non-
resident/casual taxpayers on the basis of application data.
On being asked by Chairman, ITGRC to further explain this issue, GSTN stated that for casual
taxpayers, the registration was for a particular period only i.e. for one month or two months or
three months, whatever period was specified in the application for registration. In the case of 39
taxpayers taken up in the agenda, the end date of the registration was not populated in the system
Agenda for 53rd GSTCM Volume 2
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and because of that, they were facing difficulties. The same had been populated from the end
date taken from the registration application.
On being asked, GSTN replied to Chairman, ITGRC that the data fix had already been carried
out.
Decision: ITGRC took note of the data fix done by GSTN carried out by GSTN.
6(a).6
S. No. Issue reported No. of
Cases
Impacted
Module Detailed Description Status
6.
Incorrect calculation
of GSTR1-GSTR3B
mismatch and
incorrect creation of
DRC01B.

2 Returns
An incorrect DRC01B was
getting created for June2023
when user tried to generate
summary of GSTR1 for July
2023 before the due date of
GSTR3B (June 2023)
without filing June 2023.
The spike calculation b/w
GSTR-3B & GSTR-1 is
based on auto-calculation.
As the mismatch calculation
happens only after filing
GSTR3B but the TP has not
filed GSTR3B (i.e., June
2023) so there is no data for
mismatch of GSTR1-
GSTR3B. And the current
spike rule check is not
blocking the user from
generating summary of
GSTR1 of current return
period (i.e., July 2023)
before due date of previous
return period GSTR3B (i.e.,
June 2023), due to which the
system is trying the check
directly for GSTR1-
GSTR3B mismatch which
does not exist, so as a
fallback mechanism the
system calculates the
mismatch on GSTR1 filing
data and GSTR3B save data
of previous return period
(i.e., June 2023).

Permanent fix
is deployed in
production
Agenda for 53rd GSTCM Volume 2
Page 82 of 189

Discussion:
EVP, GSTN stated that Form DRC-01B had been recently launched for intimating the difference
between the liability declared in GSTR-1 and that in GSTR-3B. During the first two months of
operation, the application got stuck in 2 cases, as the application checks for gap between GSTR 1
and 3B for a particular GSTIN and whether any explanation for the said gap has been filed. If
not, it is not allowing furnishing of GSTR 1 for the subsequent period. But in two cases, since
the GSTR-3B was not filed timely by those taxpayers, no DRC01B was generated. And
therefore, the application upon not finding any DRC01B got stuck. Accordingly, the data fix
was done and a permanent fix had also been applied that in case GSTR-3B had not been filed,
then it would be treated as not eligible for comparing the difference.
Chairman, ITGRC enquired about the course of action to be taken in such cases. EVP, GSTN
stated that there was a flag in the system: whether to check for DRC01B or not. In the said 2
cases, the flag was reset to ‘no’, since those taxpayers were not eligible for comparing the
difference.
Decision: ITGRC took note of the data fix done by GSTN.
6(a).7
S.
No.

Issue reported No. of
Cases
Impacted
Module Detailed Description Status
7. Issue in filing GSTR-3B
after opting for
composition scheme

Taxpayer is not able to
File GSTR-3B for
month December 2017
because taxpayer has
tried to file GSTR-4 for
the period Oct-Dec 2017
but could not file and
left the return at submit
stage. Due to submission
of the return liability
was posted in the
liability register. Since
the liability was not
discharge, the system
has not allowed to file
any return afterwards.
1 Returns
While checking in database,
it has been found that
liability posted in the
liability register was not
paid by the tax payer. It had
happened due to defect in
the system application
during 2017-18.
Since the return in form
GSTR-4 was not filed but
only submitted for the tax
period Oct-Dec 2017,
therefore entries in the
liability register were
deleted through utility and
the taxpayer was enabled to
file GSTR-3B of Dec 2017.

RQM#25614
has been
raised to fix
this issue.


Discussion:
Agenda for 53rd GSTCM Volume 2
Page 83 of 189
EVP, GSTN stated that this was a case of a taxpayer changing from normal to composition taxpayer
midway and trying to file GSTR-4, where the past GSTR-3B was not in the system. VP, GSTN
further explained that basically, there were three stages of filing. The earlier practice was that the
taxpayer would save, submit and then file the returns. In the said case, the taxpayer has submitted the
GSTR 4 returns but not filed. The entry, at the ‘submit’ stage, had gone to liability register and since
the same was not discharged the system did not permit any subsequent filing of returns. Thus, GSTR-
4 was not filed for the period from October 2017 to December 2017 and taxpayer was not permitted
by the system to file GSTR 3B for Dec 2017. The entry, at the ‘submit’ stage, populated in the
liability register was deleted on taxpayer’s request. This enabled him to file GSTR-3B of December
2017.
On being asked by the Chairman, ITGRC for the delay in correction, VP, GSTN replied that the
taxpayer had approached for filing post the amnesty scheme for late fee launched by the government
in the previous year. They further informed that the amnesty in late fee was initially given for 3
months from April to June but later extended to August.
CCT, West Bengal raised the issue that if the taxpayer submits a return but fails to file the same, a
provision should be made to ensure that the same is automatically filed after a certain window of time.
VP, GSTN replied that the said system had been changed and presently there is no submission stage
and after saving, taxpayer proceeds directly to filing stage.
Decision: ITGRC took note of the data fix done by GSTN.
6(a).8
S.
No.
Issue reported No. of
Cases
Impacted
Module Detailed Description Status
8.


Reset cases in
GSTR-3B (Partial
commit happened
on click of reset
button while filing
GSTR- 3B)

2 Returns
It may be recalled that initially, there was
a four-tier system of filing return in Form
GSTR-3B, viz. Save, Submit, Offset
liability and File. All saved entries used
to become non-editable after clicking on
‘Submit’ button. Liability register and
Credit ledger used to be updated at submit
stage.
In the beginning, lot of complaints used to
be received due to freezing of entries
before filing (at submit stage). In the
beginning, returns lying at submit stage
were reset from the backend as lot of
complaints were received on account of
inadvertent mistakes.
Taxpayer clicked on “Reset” button with
intention to clear liabilities posted in
ledger and the submit entry posted in
return database.
Rollback happened in return database but
entries in ledger didn’t happen which
Permane
nt fix is
not
required
because
RESET
button is
removed
from
system.
These
are the
cases
raised by
taxpayer
s prior to
the
impleme
ntation
of
RESET
button.
Agenda for 53rd GSTCM Volume 2
Page 84 of 189
were also supposed to be rolled back.
Return period involved is 10/2017.

Discussion:
The EVP, GSTN stated that during 2017-18, GSTR-3B had a reset button. During the said period, the
return could be reset even after submission. But for two taxpayers, upon clicking the reset button, the
saved entries were rolled back but the entries in the liability ledger were not. So GSTN did a data fix
for these two taxpayers to roll back the entries in the liability ledger also.
Chairman, ITGRC enquired about the reason for the huge delay. EVP, GSTN replied that taxpayers
have approached late post the amnesty scheme. In the absence of amnesty scheme, for many
taxpayers, the quantum of late fee would be much higher than the tax liability.
Chairman, ITGRC stated that in those cases, where return for a period was not filed, the taxpayers
would not be permitted to file for the subsequent period as well. He further enquired whether during
this period, the said GSTINs were under suspended animation and were not making any clearance.
GSTN replied that said taxpayers might have been doing business, but not filing any return for the
past.
CCT, West Bengal had raised the point that if the return for period 2017-18 was not filed by TP,
could he be allowed to file rest of the returns in the amnesty period, in spite of the fact that the earlier
return was not filed. EVP, GSTN replied that returns for the period 2017-18 was also filed during the
amnesty period. CCT, West Bengal further enquired when the data fix was done by GSTN and what
would happen if the same had been fixed post the amnesty period.
GSTN replied that the question of late fee would not arise in the said cases as data fix was done
around July, before the expiry of the amnesty period.
Decision: ITGRC took note of the data fix done by GSTN.
6(a).9
S.
No.
Issue
reported
No. of
Cases
Impacted
Module Detailed Description Status
9.
Taxpayers
were not
able to pay
GSTR-3B
liability as
‘Make
Payment’
button was
not
working
2 Returns
Taxpayers were not able to pay his liabilities
for GSTR3B by clicking on "MAKE
PAYEMENT/POST CREDIT TO LEDGER"
button, hence not able to file GSTR3B.
Two taxpayers had submitted GSTR3B for tax
period November 2017 and did not file
GSTR3B. Now, interest has also been levied
in GSTR3B and due to this code change,
taxpayers are unable file GSTR3B for the
above said tax period.
This issue is coming for users who had saved
their GSTR3B in years when interest was not
mandatory and not filed it yet. When they
subsequently come to file the GSTR 3B,
system notices that the format has changed
Data fix
done. As
frequency
of these
types of
cases are
very less
likely,
therefore
no code
fix is
required.

Agenda for 53rd GSTCM Volume 2
Page 85 of 189
and the interest is payable and hence not
allowing them to file the saved return.
Discussion:
GSTN stated that two taxpayers had saved their GSTR 3B in the years when interest was not
mandatory and subsequently had not filed the returns. Upon trying to file the returns post introduction
of new format, the saved returns could not be filed. GSTN has rolled back the form and enabled them
to file afresh with interest.
Decision: ITGRC took note of the data fix done by GSTN.
6(a).10
S.
No.

Issue reported No. of
Cases
Impacted
Module Detailed Description Status
10.


Electronic
ITC Ledger
incorrectly
debited from
new GSTIN
instead of old
GSTIN while
filing ITC02.

1 Returns
While filing ITC02 for transfer
of ITC from the old GSTIN
(closed) to new GSTIN, the
system has transferred the
amount from new GSTIN to old
GSTIN.
This has happened because the
taxpayer has provided same
phone number for both the
GSTINs - Old
(09ABHPC7139C1ZW) & New
(09BSMPS2087J2ZY) and due
to which system has encountered
the issue.

It was
executed
on 21-
07-2023
vide
ICR -
22036.

Discussion:
EVP, GSTN stated that in a case of proprietorship concern where the proprietor had expired and some
family member had obtained new registration, the mobile number remained the same and when the
ITC available in the old credit ledger was sought to be transferred to the new GSTIN, instead of the
same being credited into the ledger of new GSTIN, it was getting credited back to the old credit
ledger. Only one such case has been noticed so far during the last 6 years.
CCT, West Bengal enquired as to how the mobile number being common could cause such an issue
since GSTINs are PAN based.
EVP GSTN stated that the reason could be that mobile number was common for both and that is why
data fix had been done in this case as the taxpayer had been pursuing this issue for quite some time.
Agenda for 53rd GSTCM Volume 2
Page 86 of 189
Chairman, ITGRC enquired whether such transfer was permissible. CCT, West Bengal pointed out
that rule 41 allows transfer of ITC in case of transfer of business, amalgamation, merger etc. and
circular No. 96 dated 20.3.2019 clarified how ITC would be transferred in case of death of proprietor.
Joint Secretary, GST Council Secretariat raised the issue of whether such cases were corner scenarios
or it would require some permanent fix.
EVP, GSTN replied that it was a programming error and it had been fixed and only one case came to
notice in the past 6 years.
Decision: ITGRC took note of the data fix.
6(a).11
S.
No.

Issue reported No. of
Cases
Impacted
Module Detailed Description Status
11.
Error in
GSTR-7 filing-
Deductor was
unable to file
GSTR-7 due
to issue in
flowing of
rejected
record from
TDS/TCS
received from
(R2X)

1 Returns
GSTR-7 user had amended
the 072021 records in
082021 return period
because GSTR2X user had
not taken any action in R2X
on 072021 records but
accepted the 082021 record
auto-populated from
amendment table of GSTR7.
The original record in R2X
was supposed to be deferred
but due to technical glitch it
had not so happened.
GSTR2X user took action
on 072021 records and
rejected the 072021 record
in 032023. Due to this the
GSTR7 user was not able to
file the return for the March,
2023 period

It was
executed
on 15-
06-2023
RQM-
22154.


Discussion:
EVP GSTN stated that this was a case pertaining to Tamil Nadu Electricity Board. They had filed July
21 return and amended it in August 21. The supplier had accepted the amended record and taken
credit of the same. The system stopped TNEB from passing the credit pertaining to July, 2021 again.
However, the GSTR7 for March, 2023 could not be filed.
CCT West Bengal enquired about the meaning of ‘execution’ on a particular date as mentioned in the
agenda and requested to ensure that there would be no double credit.
Agenda for 53rd GSTCM Volume 2
Page 87 of 189
GSTN replied that they had not allowed the double credit and rejected the record which could not be
deferred otherwise due to System glitch.
To Chairman, ITGRC’s enquiry, GSTN stated TNEB was trying to pass on the credit of the July 2021
record, however it was pointed out the credit in this case had already been passed on and the record
was rejected.
Decision: ITGRC took note of the data fix carried out by GSTN.
6(a).12
S.
No.
Issue
reported
No. of
Cases
Impacted
Module Detail Description Status
12. GSTR-7:
Filing
status of
GSTR7
was
struck in
‘In
Progress’
stage.
TDS/TCS
Received
Form not
populated
after
GSTR-7
filing
GSTR-9:
Filing
status of
GSTR9
was not
updated
properly.
CMP-08:
Taxpayer
had filed
CMP08,
but Filing
Status
was not
updated
to ‘FIL’
GSTR-8:
Filing
GSTR7
Form – 5
cases
TDS/TCS
Received
Form – 3
cases
GSTR9
Form –
15 cases
CMP08
Form – 1
case
GSTR8
Form – 1
case
Returns
1. Due to non-updation of
filing status of previous
tax period’s return filed
in FORM GSTR7 by the
deductor, the return of
subsequent tax period
could not be filed.
2. DB insertion was not
happened into
RETURN_FILING_STA
TUS table and not
updated in cache.
3. Filing status not updated
in Data base
1. GSTR7: It was fixed vide
ICR-22061 (RQM 10022) on
02-08-2023 and vide RQM-
22154 on 15-06-2023 and
return status is ‘Filed’ now.
2. TDS/TCS: It was fixed on
23-06-2023 vide ICR-21213
(RQM- 13465).
3. GSTR9/CMP08/GSTR8: It
has been fixed.

Agenda for 53rd GSTCM Volume 2
Page 88 of 189
status of
GSTR8
filed by
ECO was
stuck up
‘In
Progress’.
Discussion:
EVP, GSTN stated that such cases where the return filing gets stuck in “In Progress” stage, are
usually due to technical glitches which could happen due to peak load at GSTN end or when the user
logs out without completing the filing process or when there is a snap in connectivity.
Then, filing process is not complete and some file records need to be updated. So, in these cases, data
fix had been done by updating the filing status. Otherwise, user cannot file the return for the
subsequent tax period.
There were 5 such types of returns/forms where filing status had not been updated in the database. In
GSTR 7 Form, there were 5 cases; in TDS/TCS received Form, there were 3 cases; in GSTR 9 Form,
there were 15 cases; in CMP08 Form, there was 1 case and in GSTR8 Form, there was 1 case. GSTN
has carried out data fix to change Return filing status to ‘FIL’.
Decision: ITGRC took note of the data fix carried out by GSTN.
6(a).13
S.
No.

Issue reported No. of
Cases
Impacted
Module Detailed Description Status
13.

Error while auto-
populating details in
table 4A and 4B of
GSTR-4 (Annual).

2 Returns
Taxpayer attempted to file his
GSTR4 (Annual) but auto
population of data in table 4A
and 4B from GSTR-4A was
not successful.
As per the existing
implementation, data in table
4A & table 4B of GSTR-4 is
auto-generated from GSTR-
4A. However, this activity was
not successful as the SQL
connection timeout exception
due to large data.
It was
executed on
18-07-2023
and 07-09-
2023 vide
ICR – 21971
& 22697.


Discussion:
EVP, GSTN stated that frequency of filing GSTR-4 had been made annual. The inward supplies are
being auto populated in GSTR-4A which in turn is auto-populated from GSTR-1 filed by suppliers.
Agenda for 53rd GSTCM Volume 2
Page 89 of 189
However, in these two cases, taxpayers were facing problem as their purchase records were not
getting auto populated properly. GSTN had now corrected the same.
Decision: ITGRC took note of the data fix carried out by GSTN.



6(a).14
S.
No.
Issue reported No. of
Cases
Impacted
Module Detailed Description Status
14.
Incorrect data getting
auto-drafted in table 5
of GSTR-4 Annual
return.

2 Returns
Taxpayer attempted to file his
GSTR4 (Annual) return but auto
population of CMP08 data in
table 5 of the said return was
getting populated incorrectly.
This has happened because total
value for Taxable Amount,
CGST & SGST of HBase has
incorrect value. Proposed
solution is to update the value of
Taxable Amount, CGST &
SGST with Actual value in
HBase (GSTR4 Filing Summary
table) by running an utility
(ReturnR4CMP08Utility).
It has
already
been
executed.
Discussion:
EVP, GSTN stated that the payments made by the taxpayer in all quarters were to be auto populated
in table 5 of the GSTR-4 Annual return. He further mentioned that if there was some additional
payment made by the taxpayer, it would be reflected in table 6. For example, in table 5, through
CMP08 he had paid 100 rupees, so he could make it 99 or 110 through credit/debit notes/reversal in
table 6. However, in this case, in table 5, auto population was not getting correctly reflected. The
same has been rectified.
Decision: ITGRC took note of the correction done by the GSTN.
6(a).15
S.
No.
Issue reported No. of
Cases
Impacted
Module Detailed Description Status
Agenda for 53rd GSTCM Volume 2
Page 90 of 189
15.
Date format
mismatch in Offline
tool of ITC-01
(Invoice date format
was different in
offline tool than
required.)
3 Returns
System was giving error “Type
Mismatch” while adding invoice in
ITC01 offline tool and taxpayer was
unable to file ITC01-18(1)(c) within
the due date.
This had happened as taxpayers
copied the invoice date into ITC01
Offline Tool and date format expected
by the tool was incorrect. However,
no proper validation exists for date
field in the tool and mismatch runtime
error was shown to user.

Defect was
fixed on
production via
RQM-24876 &
25757 on
1stOct-23.
However, since
the due date for
filing ITC01-
18(1)(c) was
over, the
ITC01 was
reopened for
filing.
Discussion:
EVP, GSTN stated that the issue was date format mismatch in offline tool and ITC-01 in 3 cases. The
offline tool was in Excel and the taxpayer did copy paste from some other document type. Due to this
the acceptable date format DD MM YY became MM DD YYYY. Then the taxpayer uploaded the
JSON of ITC 01 with incorrect data on the portal. GSTN had reset the form for the taxpayer and had
provided drop down facility for date but some taxpayers developed their own utility and tried to copy
and paste there.
Chairman, ITGRC enquired that due to this date format issue; there may be more such cases and there
should be a mechanism in place to disallow the taxpayer to copy paste the date.
EVP, GSTN stated that ITC-01 filing was not very frequently used. It was basically used by taxpayers
while switching from ‘composition to normal’.
Joint Secretary, GST Council Secretariat enquired about validation tool for the date, to which GSTN
replied that they had permanently fixed this issue now.
Decision: ITGRC took note of the data fix in these cases.
6(a).16
S.
No.

Issue reported No. of
Cases
Impacted
Module Detailed Description Status
16.
Correction in cash
ledger balance due to
credit/debit happened
simultaneously.

21 Returns
The issue has occurred
due to debit and credit
entry happening
simultaneously in the
cash ledger, due to
which balance was not
updated properly for 23
taxpayers. These 23
cases pertain to the
period - Dec 2022 to
June 2023. Out of 23
cases, 21 are registered
taxpayers and 2 have
Data fix
was done
on 27 Oct
2023 via
ICR#23364

Agenda for 53rd GSTCM Volume 2
Page 91 of 189
already been cancelled.
It is happening due to
defect in the
application which is
being looked into
separately.

Discussion:
EVP, GSTN stated that this situation arose where debit and credit entries were made simultaneously
due to which the correct cash ledger balance was not being reflected in the ledgers. There were 21
such cases where the data fix had been carried out.
Chairman, ITGRC stated that such cases had come earlier also.
GSTN responded that they had Suo-moto generated the data set pertaining to such cases and
accordingly data fixes had been carried out without waiting for the taxpayer to raise the tickets.
Decision: ITGRC took note of the data fix done by the GSTN.
6(a).17a
S.
No.

Issue reported No. of
Cases
Impacted
Module Detailed Description Status
17a.
Transfer of
Cash Ledger
Amount from
Temporary
Registration to
GSTIN with
same PAN.

1 Returns
The challan amount of
Rs.10,34,775/- was deposited in
GST
No.172300000017AR5(Temporary)
meant for Advance Ruling. This
amount cannot be used for any
other purpose as there is no
functionality for setting off against
any demand or claiming refund.
The taxpayer has ignorantly
deposited amount in Temp ID for
Advance Ruling through Challan
facility.

Functionality
to restrict
payment (more
than required
amount)
through
Challan for
Advance
Ruling Temp
ID users is in
pipeline. Data
fix is done for
this particular
case.


Discussion:
EVP, GSTN stated that this situation arose when some of the taxpayers either opted for Advance
Ruling or some other action. The taxpayer deposited the amount of Rs. 10,34,775/- in the temporary
GSTIN meant for Advance Ruling instead of regular GSTIN. Accordingly, the said amount had to be
Agenda for 53rd GSTCM Volume 2
Page 92 of 189
transferred back to the regular GSTIN. Now this issue is in the process of being fixed by GSTN by
way of temporary registration not allowing any deposit above the expected fee for the Advance
Ruling.
Decision: ITGRC took note of the data fix done by the GSTN.
6(a).17b
S.
No.

Issue reported No. of Cases
Impacted
Module Detailed Description Status
17b.
Reversal of cash
balance from
provisional/inactive
GSTIN to Active
GSTIN

100 Returns
While transferring amount
through Form GST PMT-
09 from cash ledger to
another GSTIN registered
on the same PAN, in 100
cases (Ledger reference
numbers), amount was
transferred to inactive
taxpayers also who were
not migrated to GST and
have no credentials to
carry out any business
transaction on the portal.
This error happened in
past cases due to defect
which has now been
fixed. Ledger amount to
be transferred to the active
GSTINs of the same
PAN.
Permanent code
fix has already
been done vide
CR#24869. The
issues of
impacted
taxpayers have
been fixed.


Discussion:
EVP, GSTN stated that this was a case where the cash balance was available in the provisional
GSTIN account which was inactive. He stated that while transferring amount through Form GST
PMT-09 from cash ledger to another GSTIN registered on the same PAN, in 100 cases (Ledger
reference numbers), amount was transferred to inactive taxpayers who were not migrated to GST and
had no credentials to carry out any business transaction on the portal.
He further stated that this error happened in past cases which has now been fixed and Ledger amount
had been transferred to the active GSTIN of the same PAN.
Decision: ITGRC took note of the data fix done by the GSTN.
6(a).18
S.
No.
Issue reported No. of Cases
Impacted
Module Detailed Description Status
Agenda for 53rd GSTCM Volume 2
Page 93 of 189

18.
For the category of
“Excess cash ledger
balance”, in case
deficiency memo is
issued, the amount
debited while applying
refund application is not
crediting back to the
cash ledger.

3 Refund
For the refund applications
AA060323017870K dated
12.03.2023,
AA2902230726537 dated
24.02.2023 and
AA080623067593Y dated
26.06.2023 (all belongs to
the category of Excess cash
ledger balance refund), the
tax departments have issued
Deficiency memo. However,
the amount debited at the
time of filing of refund
applications were not
credited to the Applicant’s
cash ledger due to technical
issue.
Permanent
solution is given
in September
2023 wherein
the option of
issuance of
Deficiency
memo was
removed for
Excess cash
ledger balance
refund.



Discussion:
EVP, GSTN stated that when a taxpayer had applied for refund for the excess cash ledger balance and
the proper officer had issued deficiency memo, the amount which was debited at the time of filing
was not credited back to the tax payer’s cash ledger. GSTN had identified three such cases and were
given data fix. Now, auto acknowledgement had been issued by the system in these cases and
issuance of deficiency memo for this category of refund has been disabled in the system.
Decision: ITGRC took note of the data fix done by the GSTN.
6(a).19
S.
No.

Issue reported No. of Cases
Impacted
Module Detailed Description Status
19.
Issue in status
update of
taxpayer on
EWB portal.

1 E-way bill
The status of taxpayer was
BLOCKED on EWB
portal due to non-filing of
GSTR-3B. However, after
filing the return GSTR-3B
the status on EWB portal
was not getting updated
from Blocked to
Unblocked”. The taxpayer
was UNBLOCKED from
NIC end, therefore on
GST portal the status was
manually updated to
UNBLOCKED in our
The status was
manually
updated to
UNBLOCKED.

Agenda for 53rd GSTCM Volume 2
Page 94 of 189
database.
This happened during
peak filing; because of
batch load the user’s
“STATUS” was stuck in
“Blocked” status. Reason
is because of batch load
the user’s “STATUS” was
stuck in “Blocked” for of
which taxpayer is not able
to generate E-way bill.


Discussion:
EVP, GSTN stated that this was an issue in the status update of a taxpayer on e-way bill portal. E-
way bill generation is blocked when taxpayer does not file GSTR 3B. Due to system issue, in the said
case the taxpayer’s status on the E-way bill portal remained blocked even after filing the GSTR 3B.
GSTN has manually updated the status to ‘unblocked’ and fixed this issue.
Decision: ITGRC took note of the data fix done by the GSTN.
6(a).20
S.
No.

Issue reported No. of Cases
Impacted
Module Detailed Description Status
20.
Export Invoices
were not
transmitted to
ICEGATE
from GST
portal for IGST
refund.

11,173 Refund
The export invoices were not
transmitted to ICEGATE because
the export ledger is updated
incorrectly by GST system. Export
ledger is maintained for each
taxpayer with the values of liability
(Table 6) reported in GSTR 1 and
the payment (Table 3.1(a)) made in
GSTR 3B. Invoices are transmitted
to ICEGATE if Payment in GSTR
3B >= liability reported in GSTR 1.
Invoices are not transmitted to
ICEGAGE due to negative balance
in the export ledger.
The reason is that the SEZ invoices
from Table 6B of GSTR 1 is
computed twice by the GST system.
It resulted in more liability and
negative balance in export ledger.
That’s why, invoices are not getting
transmitted to ICEGATE for the
Team has
already
completed code
fix, and the
same is planned
to be deployed
during next
window.
Meanwhile, the
DB scan has
been done for
similar cases
between June to
Oct 2023 – data
fix will be done
for the impacted
cases.

Agenda for 53rd GSTCM Volume 2
Page 95 of 189
exporters who reported SEZ supply.

Discussion:
EVP, GSTN stated that the next issue pertained to export with payment of duty. Some taxpayers had
reported that their export invoices were not being transmitted to ICEGATE portal. On analysis, it was
found that with respect to the SEZ invoices reported by the taxpayer, the liability in them had been
counted twice by the system. GSTN maintains export ledger for each taxpayer for forwarding it to
ICEGATE portal. Since the liability in the SEZ invoice in these cases were counted twice, the export
ledger showed negative balance. Invoices are transmitted to ICEGATE only if the ledger is positive or
zero. Since in these cases it was negative, their invoices were not transmitted to ICEGATE.
EVP, GSTN stated that the same was a programming error and code fix had been done. Further data
fix has also been carried out by GSTN for the impacted cases.
Upon query raised by CCT, West Bengal, EVP, GSTN stated that all supplies by SEZ under this
category for the period from June to October 2023 faced the said issue. The issue had been resolved
since October 2023.
Decision: ITGRC took note of the data fix done by the GSTN.


6(a).21
S.
No.

Issue reported No. of Cases
Impacted
Module Detailed Description Status
21.
Aadhaar
Authentication
of Non-resident
1 Registration
A foreigner is restricted from
performing Aadhar
authentication in GST system.
As this GSTIN is having other
directors mentioned as
“Promoter/Partner” tab, system
is expecting for AA for refund
functions. However, the CEO &
MD of Air India is a foreign
national but having Aadhar and
wants to do Aadhar
authentication.

The following persons are
required to do Aadhaar
Authentication in GST system:
1. Primary Authorised Signatory
(PAS);
Code fix has to
be done to allow
residents to
perform Aadhar
authentication.
This will take
time and if
ITGRC agrees
data fix can be
done. When data
fix is done, the
status will be
shown as
Aadhar
authenticated
both to the
taxpayer and tax
officer.

Agenda for 53rd GSTCM Volume 2
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2. Indian Citizen mentioned in
Partners Promoters tab.
In case, all the
persons mentioned are non-
resident, then system is not
asking non-resident to do
Aadhaar Authentication and
Status of Aadhaar would be
Aadhar validated if PAS has
completed Aadhaar
Authentication and system will
allow taxpayer to file refund.
In instant case (ticket no.
2023112111659366), the
taxpayer has Indian Director and
hence system is not allowing
taxpayer to file refunds and
treating Aadhaar as
unauthenticated. The above has
been developed as per the
requirements received by us.
This is as per the expected
system behaviour.


Discussion:
EVP, GSTN stated that the next issue was relating to Air India. CEO of Air India was not an Indian
citizen but possessed an Aadhaar. The system requires Aadhar authentication by either one of the
partner promoters or the authorized signatory for certain functions such as application of refund,
transmission of invoices to ICEGATE portal, etc. For a company one plus one system was followed
by the system that was one primary authorized signatory and one person in partner and promoter tab
had to complete the Aadhaar authentication. In the case of Air India, the primary authorized signatory
has valid Aadhaar authentication. But in the category of partner promoter, while the CEO possessed
Aadhaar, the system does not permit Aadhaar authentication by a foreigner. They shared the below
screen for the understanding of the members.

Agenda for 53rd GSTCM Volume 2
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EVP, GSTN pointed out that as seen in the screen, the option to select the CEO & MD was greyed out
and hence unavailable. GSTN further stated that out of the remaining 2 partner promoters, one had
left the organization and the other was not involved in the day-to-day affairs of the company.
Remaining were independent directors.
GSTN further informed that the said matter had been taken up with Law Committee and LC had
clarified that such a check was not required and therefore, GSTN is in the process of carrying changes
in the portal to permit Aadhaar authentication by foreign nationals. EVP, GSTN stated that for the
specific case, data fix is being carried out.
Chairman, ITGRC enquired when a permanent fix in this regard would be carried out. GSTN
submitted that the same would be implemented by June 2024.
Decision: ITGRC took note of the data fix done by the GSTN.
6 (b). Thereafter, EVP, GSTN explained 12 cases where there were technical issues affecting
locally with financial implications and where the correct data was known.
The details of the cases are mentioned as follows:
6 (b).1
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
Agenda for 53rd GSTCM Volume 2
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1.
Excess
amount
credited to
the cash
ledger of
suppliers on
account of
TCS
1 Returns
E commerce operator (ECO, GSTR8 user) has
filed GSTR8 for the return period of Jul 2022 on
08th Aug 2022. Supplier has accepted this record
for Jul 2022 return period and he has filed the
return on 11th Aug 2022.
Due to technical glitch, status was not updated as
FIL in return filing status table. Because of this
issue, system allows ECO to self-amend this
record in Nov 2022. While doing self-amendment
ECO has performed downward amendment.
Supplier again accepted this amended record in
Nov 2022 period through which he claimed the
credit twice for the single record.
During compute liability, entry went to ledger.
But due to issue with Kafka the status was not
updated to FIL in Return Filing Status table.
Since status was not updated to FIL, GSTR8 user
has changed the data which was already saved
and it again got populated. Auto populated value
at R2X user is hence greater than what GSTR8
user has filed. Due to that R2X user has claimed
the excess amount which has to be recovered
from R2X user.

It has
been
fixed.

Discussion:

EVP, GSTN stated that in this case, excess amount of credit had been claimed by the supplier as the
system had allowed ECO to amend record pertaining to July, 2022 in November, 2022 due to a
technical glitch where status of return had not been updated to filed for the July, 2022 return period.
Chairman, ITGRC enquired how auto populated value for R2X user is more than what the GSTR8
user has filed. EVP, GSTN replied that it is basically records auto populated in TDS/TCS Form
accepted by the supplier twice. In this case credit was claimed twice for a single record.
On being asked by CCT West Bengal as to how the recovery had been made, GSTN replied that
amount was recovered by debiting the cash ledger of the supplier and that a minor amount (Rs. 975/-)
had also been recovered from the e-commerce operator.
Recovery of total amount of Rs.78,666/- from both supplier & ECO has been done.
Decision: ITGRC took note of the data fix done and recovery made by the GSTN.

6 (b).2
Agenda for 53rd GSTCM Volume 2
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S.
No.
Issue reported No. of Cases
Impacted
Module Detailed Description Status
2.
Electronic ITC ledger
credited while filing
TRAN-2
369 TRAN
Taxpayers who have filed their
TRAN-2 return via DSC filing,
during period from 29-09-2022 to
30-11-2022 got the electronic ledger
credited as per their filing amount at
the same time of filing instead of
getting Electronic ITC Ledger after
verification through BO- tax official
flow.

The defect
was fixed on
28th April
2023 via
RQM 24409.


Discussion: EVP, GSTN stated that TRAN-1 and TRAN-2 utilities were opened as per the directions
of the Hon’ble Supreme Court. So changes were made to the earlier utility and promoted to
production. Earlier filing used to be through digital certificates. The usual pattern was that the credit
would first go to the officer, he would assess, check the same and then allow and then the amount
would be credited to ledger. However, in 369 cases of filing of TRAN-2 through digital certificate,
the amount was credited directly into the ledgers of the tax payer. This was a code defect and
therefore, reversal was done by GSTN in those 369 cases.
JS, GSTCS enquired whether in all cases amount was available for reversal.
EVP, GSTN replied that in cases where sufficient amount was not available, credit had been made
negative. Whenever taxpayer files a return, that amount would be deducted first.
Chairman, ITGRC enquired whether these units were operational units.
GSTN replied that mostly all the units who filed TRAN-1 and TRAN-2 were operational.
CCT, West Bengal enquired about the interest on that portion of credit that had been utilized by the
taxpayer even before verification. Chairman, ITGRC suggested that a list be sent by GSTN to
jurisdictional officers for checking the interest liability, if any.
Reversal of total amount Rs. 68,73,66,284.06 was done in 369 cases.
Decision: ITGRC took note of the data fixes done by the GSTN. List of cases where credit had been
utilized by taxpayers before verification by officers be sent by GSTN to jurisdictional officers for
checking the interest liability, if any.

6 (b).3
S.
No.
Issue
reported
No. of
Cases
Impacted
Module Detailed Description Status
Agenda for 53rd GSTCM Volume 2
Page 100 of 189
3.
Error in filing
GSTR-3B due
to balance
liability
10 Returns
In the initial period of
implementation of the GST, in
composition return filed in
form GSTR-4, there were two
stages of filing i.e. Submit &
File. System used to compute
late fee up to the date of
submission of the return and
the late fee for the period
between Submit & File used to
be carried forward to the next
tax period. The upper celling
of late fee was Rs. 5000/- per
tax period. The addition of late
fee of previous tax period
should not have been
accounted for the upper celling
but system has kept a limit of
Rs. 5000/- in this case also.
Thus, some taxpayers had paid
short late fee than actual. The
defect was noticed later on and
balance late fee liability was
posted in the return due to be
filed.
Therefore, the balance amount
of late fee was recovered and
taxpayer filed the return
without any error.
This has happened because the
cap of late fee of Rs. 5000/-
was applicable for one tax
period and not for any liability
carried forward from the
previous tax period.

No changes is required
to be made in the
application software as
GSTR-4 (Quarterly)
has already been
discontinued from
April 2019.


Discussion:
EVP, GSTN stated that in the initial period of implementation of the GST, for composition return,
there were two stages of filing i.e. Submit & File. System used to compute late fee up to the date of
submission of the return and the late fee for the period between Submit & File used to be carried
forward to the next tax period. The upper ceiling of late fee was Rs. 5000/- per tax period. The
addition of late fee of previous tax period should not have been accounted for the upper ceiling but
Agenda for 53rd GSTCM Volume 2
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system has kept a limit of Rs. 5000/- in this case also. Thus, some taxpayers had paid short late fee
than was actually required to be paid by them.
GST System has done the actual computation and recovered the balance amount from these taxpayers.
Two taxpayers had paid excess amount and the same would be refunded to them whenever they raise
any ticket towards the same.
CCT West Bengal enquired as to how the late fee was recovered when there was a ceiling of
Rs.5,000/- for late fee per return.
GSTN replied that outstanding liability was added to the current GSTR-3B. In all the cases, late fee
amount had been realized and recoveries had been made.
Upon enquiry by Chairman ITGRC, EVP, GSTN replied that recovery had been affected by including
the said amount in their Liability Register.
Late fee of Rs.64,600/- has been recovered from 8 taxpayers.
Decision: ITGRC took note of the data fixes done and recovery made by the GSTN.
6 (b).4
S.
No.
Issue
reported
No. of
Cases
Impacte
d
Module Detailed Description Status
4.
Redunda
nt
entries
in ledger
while
filing
GSTR-
4(Annua
l)
3 Returns
Taxpayer has cleared the liability and filed
his CMP08/GSTR4 (Annual) return but
redundant (multiple) entries were inserted in
ledger. In cases where sufficient balance was
available in subsequent insertion, balance
was deducted again and filing status was
updated to” FIL”. In cases where sufficient
balance was not available in subsequent
insertion, filing status was not updated to”
FIL”.
Solution is to
a) Remove redundant (multiple) entries from
ledger and update filing status as “Filed”
b) Refund of extra liability deducted
(wherever applicable)

It was executed on
27-06-2023 vide
ICR- 21690. Yes;
Refund of late fee
of Rs. 500/-
(CGST: Rs. 250/-
& SGST: Rs. 250/-)
has been done in
one case. No
refund was due in
two cases.



Discussion:
EVP, GSTN stated that this case was of a composition taxpayer wherein some redundant entries were
lying in the ledger. So those had been removed and refund of Rs. 500 was paid in one case where the
Agenda for 53rd GSTCM Volume 2
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taxpayer had paid excess late fee. No refund was due in two other cases where there were redundant
entries.
On being asked by the Chairman, ITGRC to further clarify the issue, EVP, GSTN stated that these are
corner scenarios. If a taxpayer files CMP08 when the network is slow, it is possible that the taxpayer
would have clicked the file button and then after some time again clicked it. He stated that the file
button gets disabled after the first click, however, where the network is slow, the taxpayer may have
pressed the button a second time before it was disabled. EVP, GSTN further clarified that this was an
issue of multiple entries in the ledger rather than a case of redundant entries.
CCT, West Bengal suggested that agenda notes may be more clear so as to aid understanding. EVP,
GSTN clarified that in this case, the late fee had got debited twice which was refunded back to the
taxpayer. It is basically a queue system in which the first event got stuck and the taxpayer did the
second one then second filing was successful and ultimately the first also.
To Chairman ITGRC’s enquiry as to whether two returns were filed, EVP, GSTN clarified that this
was a case of double entry rather than double filing.
Decision: ITGRC took note of the data fixes done by the GSTN.
6 (b).5
S.
No.
Issue
reported
No. of
Cases
Impacted
Module Detailed Description Status
5.
System
error while
filing
GSTR-4(
quarterly)
form
3 Returns
System had computed the late fee
liability at the time of "Compute
Liability' in GSTR-4 (Quarterly)
but later on not updated the same
when taxpayer came to file the
return and allowed to file the return
with short paid late fee.
Thus, balance amount of late fee
needs to be recovered from the
taxpayer which can be paid by
taxpayer voluntarily through Form
GST DRC-03.
Thereafter, the status of the return
would be changed to 'FIL' in the
relevant table in the database.
Afterwards, taxpayer will be able to
file future returns.

It was executed on 02-
08-2023 and 11-08-2023
vide ICR- 22228 and
22362 respectively.
The defect was fixed
permanently on 04-08-
2023 vide ECR- 22213
(RQM- 24947)


Discussion:
Agenda for 53rd GSTCM Volume 2
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EVP, GSTN stated that while filing GSTR4 composition return, in compute liability the taxpayer was
facing some issue and late fee actually was not recovered fully. This happened because system had
computed the late fee liability at the time of "Compute Liability' in GSTR-4 (Quarterly) but later on
not updated the same when taxpayer came to file the return and allowed to file the return with short
paid late fee. So, in cases where taxpayers had initiated filing but completed the filing process at a
later date, the late fee remained outstanding and the taxpayer was allowed to file only when he made
the payment of short paid late fee. Two taxpayers had made payment but one taxpayer has not made
the payment so far.
JS, GSTCS enquired the time period of these returns. EVP, GSTN replied that these are old GSTR4
quarterly returns for composition taxpayers during 2017-18 and 2018-19 and the same had been
discontinued from April 2019. These were old cases. The system stopped the taxpayer filing further
returns until he clears the balance late fee.
The defect was fixed permanently on 04.08.2023.
Recovery of late fee amounting to Rs.1450/- has been done through DRC-03 in two cases. Return of
one taxpayer would be opened after payment of the outstanding dues.
Decision: ITGRC took note of the data fixes done by the GSTN.
6 (b).6
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
6.
Data
mismatch
issue between
Hbase &
Ledger in
GSTR-3B
75,732 Returns
1. Taxpayers & tax officers have
raised tickets stating that the
taxpayers have filed the GSTR
3B return but there is a
mismatch in the data entered
vis-à-vis payment made.
2. The table 6 of GSTR 3B i.e. the
payment table is auto-populated
from values in table 3 i.e.
Outward supplies and table 4
i.e. ITC Availed. Post the
payment of the liability, the
values are then posted to the
respective ledgers i.e., the cash,
ITC and liability ledgers.
3. On reporting of these values on
the GST portal, the data is
thereby stored in Hbase tables
in the backend. Hbase is a type
of database management
technology used to store and
handle big data systems.
4. On technical analysis of the
issue reported it was found that
in certain situations a technical
glitch is occurring in the
backend technological systems
Proposed solution:
1) The list of the
cases may be
provided to the field
formations for
recovery of the
unpaid liability and
the ITC values which
have been claimed in
the credit ledger vis a
vis lesser or no
values in Hbase
tables. (This is the
easiest solution with
no technical
development
involved and the
number of cases per
tax officer would not
be unmanageable).
OR
2) The returns
Agenda for 53rd GSTCM Volume 2
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resulting in storing of different
values in the Hbase tables in the
backend and the ledger entries
of the taxpayers. Further, in
some rare cases system also
allowed the returns to be filed
without debiting the taxes from
the respective ledgers.
5. In total, there are 1,31,907 cases
of mismatch in data entries with
98,253 unique GSTNs across all
financial years. Further, out of
1,31,907 cases, in 75,732 cases
there is a possible revenue loss
of Rs 4,822.96 crore on the
below counts – a) either through
no values or less than Hbase
value entered in liability ledger;

b) availing more value in ITC
ledger than data available in
Hbase

identified in the
cases mentioned
above may
be reset by the
system. After the
reset of the returns,
the taxpayers would
be communicated via
e-mail/SMS/Phone to
file their returns with
the correct
values and
correspondingly the t
ax officers would be
informed so that they
can facilitate and
follow up on the
return filings. This
solution requires
certain technical
development

Discussion:
EVP, GSTN stated that this was a major issue. A ticket was raised from the jurisdiction of CCT, West
Bengal communicating that they had observed that some taxpayers had filed GSTR3B return but the
data suggests that they had not offset the taxes. He further stated that similar cases had been observed
in the past also where there was a mismatch in the Hbase database and the ledgers. So, an exercise
was carried out to identify all such cases.
Chairman, ITGRC asked EVP, GSTN to explain what is Hbase database. EVP, GSTN stated that on
opening GST forms on GST portal, the data is stored in Hbase tables in the backend whereas on
actual filing and saving of returns, the data is posted into ledger. In certain situations a technical glitch
is occurring in the backend systems resulting in storing of different values in the Hbase tables in the
backend and the ledger entries of the taxpayer. In some rare cases, system also allowed the returns to
be filed without debiting the taxes from the respective ledgers.
Chairman ITGRC enquired whether they were talking about ITC ledger.
EVP, GSTN replied both kinds of ledgers cash as well as credit could have this discrepancy.
CCT, West Bengal stated that in table 3 of GSTR3B, taxpayers had to report the outward supplies.
The payment table, table 6, is auto- populated from values in table 3. In this case, the taxpayers had
shown their outward supply in table 3 but the corresponding tax which should had been auto
populated in table 6 of GSTR3B was showing zero and the liability ledger also showed zero. The
taxpayer had liability evident from his return but table 6 and the liability ledger was showing NIL or
zero. So they had pointed out this discrepancy and afterwards GSTN had done an exercise to identify
if other returns had also such discrepancies. More than 75,000 cases were identified where such
Agenda for 53rd GSTCM Volume 2
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discrepancies existed. The most important thing would be to recover taxes in respect of these 75,000
known taxpayers.
EVP, GSTN detailed various scenarios where discrepancies had crept in as shown below:
S.no Type of issue No of Cases Revenue
1 Liabilities in Hbase but no value in ledger 37,725 Rs 4,079.26 crores
2 No ITC values in Hbase but values in Ledger 12,589 266.34 crores
3 ITC values both in ledger and Hbase but
excess values in ledger
13,711 290.83 crores
4 Liability values both in ledger and Hbase but
excess values in Hbase
11,707 186.53 Crores
Total Cases 75,732 Rs 4,822.96 crores

He further explained how such discrepancies could have crept in. One reason was that the save
request was processed after offsetting the taxes. Even though validation checks exist to abort save
requests after offset, still in some cases save had been allowed after offsetting taxes. The second
reason was that in case of filing a NIL return through API, it was not getting checked with the Hbase
database. So, in those cases whatever data had come through API had gone directly into the ledgers
resulting in the difference between the ledger and HBase. The third reason was that user tries to
perform NIL filing simultaneously via multiple browser tabs. When taxpayer opts ‘yes’ in
questionnaire page for NL return in one tab and opts ‘no’ in another tab, then such discrepancies
might crop up. The fourth one was that taxpayer had to file a non-nil return but had opened multiple
browsers and initiates the save request and files GSTR3B with different sets of data in different tabs.
The last one was that taxpayers had offset and ledger got inserted but filing status was not updated
because of data connectivity loss.
JS, GSTCS enquired as to whether in an earlier meeting it had been decided not to allow NIL filing
where liability was being shown in the return.
EVP, GSTN replied that fix had been carried out and if Nil return is sought to be filed when some
data in the taxpayer’s pre-populated database was available, the return filing was stopped and
taxpayer was being asked to clear those entries.
Chairman ITGRC enquired as to what encompasses the term ledger.
EVP, GSTN replied that ledger means liability ledger, credit ledger and cash ledger.
Chairman ITGRC suggested that the second option presented by GSTN seems to be a better solution
that the system would reset the returns and communication to taxpayers would follow.
Agenda for 53rd GSTCM Volume 2
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CCT, West Bengal agreed with the Chairman, ITGRC and stated that option 2 to reset the button,
inform the taxpayers and recover the amount would happen in a much faster manner. Any other
solution suggested may take a long time and it would be complicated.
EVP, GSTN listed the type of issues, number of cases and the revenue involved. He stated that in
75,732 cases there may be a possibility of short payment of Rs.4,822.96 crore. Now the reverse case
might also happen where the data in the ledger was more and that in the Hbase was less. So all those
cases are not being reopened where the amount was more in the ledger and the taxpayer had already
paid the taxes, because the same might have adjusted in the earlier months.
Chairman, ITGRC enquired whether GSTN had come across such kind of cases.
EVP, GSTN stated that in total, there are 1,31,907 cases out of which 75,732 cases were of short
payment.
CCT, West Bengal stated that the short payment cases may be taken up.
Chairman, ITGRC enquired about those scenarios which put taxpayer at a disadvantage and whether
the same had been brought to notice of GSTN by the taxpayers.
EVP, GSTN replied than in the reverse scenarios of Sl. No. 1 to 4, taxpayer had been approaching
GSTN and they were resetting the database as required and being reported on a case to case basis.
CCT, West Bengal enquired as to further course of action in cases where the credit ledger of a
taxpayer had been populated with more credit than was actually available to the taxpayer and he had
utilized the same.
EVP, GSTN stated that these cases are covered in the 75 thousand cases detailed earlier and the
proposal was to reset the returns and inform the jurisdictional officer.
To Chairman, ITGRC’s enquiry about whether taxpayers were required to refile their returns, EVP,
GSTN stated that necessary verification would have to be done by the jurisdictional tax officers
before arriving at whether in a particular case recovery was warranted. This would be collaborative
effort between the system and the tax officer. GSTN is seeking approval of ITGRC for resetting the
returns of the taxpayers to the extent of revenue involved and informing both the taxpayers and the
tax officers simultaneously regarding the same.
CCT, West Bengal enquired as to whether the taxpayer would be allowed to file further returns in
cases a return had been reset for short payment. EVP, GSTN replied taxpayer would be allowed to file
returns. CCT, West Bengal requested that officers may be provided with an MIS for the same. He also
raised the issue of interest on the delayed payment of tax. Chairman, ITGRC enquired as to whether
this short payment could be attributed to a technical glitch like in the case set out where due to
slowness of the system, data had got saved after offsetting of taxes. EVP, GSTN stated that except for
this scenario, the other reasons as stated earlier for short payment could not be called a technical
glitch.
Chairman, ITGRC stated that the best solution would be to combine the 2 options presented by
GSTN, viz., that GSTN would reset the return and send the same to jurisdictional officers for
verification. CCT, West Bengal pointed out that issue may arise where such short payment is for the
years 2017-18 and 2018-19. 2017-18 had already become time barred. Even for the year 2018-19 very
little time is left for issue of notices, if required.
Agenda for 53rd GSTCM Volume 2
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Additional Commissioner, Haryana expressed apprehension that by the time data was sent to officers,
even 2018-19 would be time barred.
Chairman, ITGRC directed that the data be sent to officers by 15.1.2024. EVP, GSTN agreed to the
same. Officer from Haryana enquired whether these short payments could be considered self-admitted
liability and hence a confirmed demand. EVP, GSTN stated that there could be cases where the
liability was shifted downwards intentionally and fraudulently.
Chairman, ITGRC directed that the list be shared with jurisdictional officers on priority to enable
them to issue notices, wherever required, in alignment with the extant legal provisions.
Decision: ITGRC approved the reset of returns of taxpayers with possible short payment. List of
75,732 cases of possible short payment be sent to jurisdictional officers by 15.1.2024 for recovery,
along with interest, as per law, wherever tax dues have been short paid.

6 (b).7
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
7.
System
failure while
filing
GSTR-4
(quarterly)
return
13 Returns
Taxpayer has done the compute
liability before amnesty and system
calculated his late fee liability as per
the submission date. Now, taxpayer
has tried to file the return in amnesty
period and paid the earlier calculated
liability but got system error.
Additionally filing status is not
updated to FIL.
This has happened because taxpayer
has tried to reset the filing by
clicking ‘RESET’ button, but there
was a bug in the system that if more
than one return period is in submitted
status and taxpayer has tried to reset
the filings then system has failed to
reset the latest return.

The defect was fixed
permanently on 04-
08-2023 vide ICR-
22213 (RQM-
24947). The data
fixes were executed
on 09-06-2023, 06-
07-2023, 20-07-2023
& 31-08-2023 vide
ICR- 21471, 21814,
22036 & 22604
respectively.


Discussion:
GSTN submitted that in these cases, the taxpayer had computed late fee before the amnesty period.
During the amnesty period, taxpayer filed the return and paid the late fee as computed earlier, while
they were exempted from paying the same. The excess late fee so paid was refunded to the taxpayer.
Agenda for 53rd GSTCM Volume 2
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Decision: ITGRC took note of the data fixes done by the GSTN.
6 (b).8
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status

8.
Recovery of
excess
amount
credited
than TDS
deducted
1 Returns
While accepting the GST TDS for
May 2022, excessive TDS
appearing on the portal is higher
than the amount deducted.
Due to defect in the System
application, excess amount has
been credited to the cash ledger of
deductee. Deductor had paid less
tax than the amount credited to
cash ledger. Team is analyzing the
root cause.

It has been executed on
28-07-2023 vide ICR-
22063 (RQM – 13465).
An amount of Rs.
13,15,400.00/- (Rs.
6,57,700.00/- for each
CGST and SGST) was
debited from cash ledger
of the taxpayer. Sufficient
amount was available in
the cash ledger of the
taxpayer at the time of
debit.


Discussion:
EVP, GSTN stated that this was a case where excess amount has been credited to the cash ledger than
the TDS actually deducted due to duplicate entries in the ledger. GSTN further informed that recovery
of the excess credit has been carried out in this case.
Chairman, ITGRC enquired as to how such errors pertaining to a single taxpayer occurred.
GSTN replied that there are multiple scenarios in which such errors could occur such as during the
peak filing day or slow micro services which leads to timing out and filing button gets enabled twice.
Further they explained that system errors could also arise when taxpayers opened the form in multiple
browsers and saved different figures in different browsers.
Decision: ITGRC took note of the data fixes done by the GSTN.
6 (b).9
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status

9.

Issue in
filing status
of GSTR-4
1 Returns
Taxpayer had filed quarterly GSTR4
return for the period of Apr-Jun 2018-
19 on 18th July 2018 and paid his
liability but filing status was not
updated to FILED. Hence, reset of this
It was executed on 07-
06-2023 vide ICR-
21424.
Total amount of Rs.
Agenda for 53rd GSTCM Volume 2
Page 109 of 189
(quarterly)
Return

return was done on 15th Oct 2018.
After reset, taxpayer again filed his
GSTR4 return on 21st Oct 2018 by
once again clearing his liabilities.
Since the liability was paid twice,
refund was to be given to the taxpayer.

5000/- (CGST: Rs.
2500/-, SGST: Rs.
2500/-) has been
refunded.


Discussion:
GSTN said that this was a case pertaining to the period 2018-19. The taxpayer had paid the tax
liability twice due to resetting of his return. The amount involved was Rs. 5000/-. The amount has
since been refunded to the taxpayer.
Decision: ITGRC took note of the data fixes done by the GSTN.

6 (b).10.
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
10.
Error in filing
GSTR-4
(Quarterly)
3 Returns
The taxpayers were getting error
while filing CMP-08 form “Liability
for previous tax period is yet to be
paid. Transaction handling was not
proper due to mix of Transaction
Handling Manager/ Non Transaction
Handling Manager transactions in
GSTR-4. Due to this, in case of any
failure, rollback was not done
completely from all the respective
data sources. In this case, filing status
has been updated as ‘Fil’ in return
filing status table without paying
liability and without updating ‘No’ in
column ‘Is Open’ of Return Liability
Master table besides the rollback of
liability setoff entries in ledger.

It was executed on 29-
05-2023, 08-06-2023
and 18-07-2023 vide
ICR – 21343, 21471 and
21971 respectively, to
reset the returns.


Discussion:
Agenda for 53rd GSTCM Volume 2
Page 110 of 189
GSTN stated that in the said 3 cases, GSTR4 return had been filed by the taxpayers without clearing
the tax liability. However, it was found that when the taxpayer tries to file the next return, the system
asks for payment of the old liability. Recovery of late fee of Rs. 700/- was done in one case. For the
other 2 taxpayers there are no financial implications.
Decision: ITGRC took note of the data fixes done and recovery made by the GSTN.
6 (b).11
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
11.


Issue in
updation of
CWF flag
when partial
refund
amount is
sanctioned by
the officer

17 Refunds
When Tax officer issues refund
order partially sanctioning to
Taxpayer and part to Consumer
welfare fund (CWF), the amount
sanctioned to CWF was crediting
to Taxpayer’s bank account.
As per the current functionality,
RFD_R1R2_MAP table contains
the list of payment order (RFD
05) which is being used for
generation of payment file to
PFMS. The RFD 05 details in this
table is updated with CWF flag
when complete amount is
sanctioned to CWF. However, if
part amount is
sanctioned, CWF flag is not
updated. This resulted in
disbursement of CWF amount into
taxpayer’s account.
The issue has been
fixed permanently.
The 17 taxpayers were
sent e-mail to pay
back the wrongly
credited amount. Out
of 17, 5 taxpayers
have paid back an
amount of Rs.
752668/- (SGST-
486815/-; CGST-
225117/-; IGST-
38368/-; CESS-2368/-
) through DRC 03. For
the remaining 12
taxpayers, amount of
Rs. 647861/- is to be
recovered. Tax
officers are
communicated to
recover the said
amount from
remaining 12
taxpayers.

Discussion:
GSTN stated that 17 cases were those in which the officer had issued a refund partially to the taxpayer
and the remaining to consumer welfare fund. However, the entire refund amount had been credited to
the taxpayer’s bank account. They further informed that it was a code issue and has since been
corrected.
GSTN submitted that there were a total of 17 cases, where the amount involved was Rs. 14.00 lakhs.
Out of Rs. 14.00 lakhs, Rs. 7.52 lakhs had been paid by the taxpayers and remaining Rs. 6.47 lakhs
was yet to be recovered. GSTN had to go case by case basis and thus, recovery was under process.
Agenda for 53rd GSTCM Volume 2
Page 111 of 189
Chairman, ITGRC stated that the matter should not be closed and the agenda should be kept pending
until the entire recovery was done. He further suggested that the recovery should be monitored by the
ITGRC and GSTN should report the same to ITGRC.
The members agreed with the Chairman.
GSTN stated that they would update on the same in every ITGRC meeting.
JS, GSTCS enquired whether there were only 17 cases throughout.
GSTN stated that a scan of the entire database has been done and only 17 ARNs were found to be
impacted.
Decision: ITGRC took note of the data fixes done by the GSTN and instructed GSTN to keep
reporting the recoveries to ITGRC till the entire recovery is done.
6 (b).12
S.
No.
Issue
reported
No. of Cases
Impacted
Module Detailed Description Status
12.

System
generated
IGST
refund
applications
(RFD 01s)
for the
duplicate
records sent
by
ICEGATE
393 Refunds
ICEGATE transmits shipping bill
details to GST system for generation
of RFD 01s for Risky exporters. In
this case, ICEGATE has resent 1879
shipping bills for which refund
applications were already generated.
GST system generated duplicate
RFD 01s for those shipping bills
which were sent twice.
GST system has duplicate check
which contains Shipping bill
number, SB date, SB port code,
Customs invoice number and date.
ICEGATE has transmitted 1879
shipping bills contrary to the data
exchange protocol by swapping of
MM and DD values. Ex – 6745216
dated 01.06.2023 has been
retransmitted as 6745216 dated
06.01.2023. It was considered as new
record by GST system and RFD 01s
were created for those shipping bills.
Total 393 refund
applications
amounting to Rs
66.89 Cr were
created. Out of these
applications, for 365
applications (Rs
63.12 Cr) no actions
were taken by the
tax officer. These
365 applications
were purged by the
GST system. For
the remaining 28
applications, the
refund has been
processed by tax
officers.

Discussion:
GSTN stated that the said 393 cases were related to refunds to risky exporters. Risky exporters’
refund details i.e., shipping bills and invoice details are sent by ICEGATE to GST system for creation
of RFD01. In the month of August and September, ICEGATE transmitted 1879 shipping bills which
had already been transmitted to the GST system. In those shipping bills retransmitted by ICEGATE,
dates were swapped from DD MM Y YY format, to MM DD Y YY format. GST system had
Agenda for 53rd GSTCM Volume 2
Page 112 of 189
considered that as a unique record and created refund applications for those duplicated records. Total
duplicate records transmitted by ICEGATE is 1879. Using those records, GSTN created 393 refund
applications amounting to Rs. 66.89 Crore. After issue was found out, GSTN had nullified/purged
from the system 365 applications where officers had not taken any action. For the remaining 28
applications, the officers had issued the orders and also disbursed the amounts. So out of the 28
applications of Rs. 3.77 crore, officers had rejected Rs. 1.38 crore and sanctioned Rs. 2.38 crore
which was to be recovered from the taxpayers. They further informed that they had written to all the
states. 3 States had responded that the said amount had been recovered but details on the same were to
be collected.
Chairman, ITGRC instructed that the recovery should be monitored by ITGRC.
CCT West Bengal stated that the list of the taxpayers should be shared once with the concerned
States.
JS, GSTCS enquired whether there was a permanent fix for this now.
GSTN stated that a permanent fix would be done by ICEGATE.
Chairman ITGRC suggested that GSTN could build some flag for such cases and that DG systems
might be informed of the issue.
GSTN stated that the same had already been formally communicated to DG Systems.
Decision: ITGRC took note of the data fixes done by the GSTN and instructed GSTN to keep
reporting to ITGRC the status of recoveries till the entire recovery had been done.
6(c) Court Directions:
Thereafter, EVP, GSTN explained 3 cases of Court Directions. The details of the cases are mentioned
as follows:
6(c).1
S. No.
Issue
reported
No. of
Cases
Impacted
Module Detailed Description Status
1 2 3 4 5 6

1.
Change in
effective
date of
cancellati
on as per
HC order
1
Registrati
on
The taxpayer M/s Bansal Steels with GSTIN
07AFKPB3694Q1ZT applied for cancellation on
11.2.2019 wherein mistakenly the effective date
of cancellation was mentioned as 1.2.2018 in the
place of 1.2.2019 and the said cancellation
application was approved by the Range officer on
12.2.2019.
The taxpayer subsequently during 2022 filed
application dated 1.7.2022 under section 161 of
the CGST Act, 2017 for rectification of order u/s
29 of CGST Act, 2017 and also filed W.P. (C)
17439/2022 in the Hon'ble High court of Delhi.
Effective
date of
cancellati
on was
updated
from
backend.

Agenda for 53rd GSTCM Volume 2
Page 113 of 189
The Hon'ble High court vide order dated 1.3.2023
ordered that the effective date of cancellation be
considered as 1.2.2019 instead of 1.2.2018 and in
compliance the Range officer had passed order
dated 15.3.2023 determining the effective of
cancellation as 1.2.2019.

Discussion: EVP, GSTN stated that M/s Bansal Steels had applied for cancellation on 11.02.2019,
whereas the effective date of cancellation was mentioned as 01.02.2018 in place of 01.02.2019. The
application was approved by the range officer. For getting the cancellation date changed, the taxpayer
approached the Hon'ble High Court and Court had directed that effective date of cancellation should
be considered as 01.02.2019 and not 01.02.2018.
Chairman, ITGRC enquired whether the issue could have been corrected at GSTN’s end without the
taxpayer having to approach the Court.
EVP, GSTN replied that if the ticket were raised by the officer, then the same could have been
resolved by GSTN.
Decision: ITGRC took note of the data fix done by the GSTN.

6(c).2
S.
No.
Issue reported No. of Cases
Impacted
Module Detailed Description Status
1 2 3 4 5 6

2.
Reverting
APL 01 to
submitted
status as APL
04/02 has been
remanded
back by
Hon`ble High
Courts

16 Appeal
Requests have been received from various
states to enable Appellate authority to restore
APL 01 where either Appeal orders APL 04
or APL 02 have been remanded back by High
Courts of different States.
Functionality is not available for remand
back to Appellate authority.
The remand back functionality is still under
development, therefore, the disposed appeal
order has to be given reset from the status of
“Appeal disposed” to “Appeal Submitted” as
per High Court Directions
Appeal
application
ARNs were
restored to
“Appeal
Submission
” stage.
Functionali
ty is
developed
and rolled
out in
production
as a
permanent
solution.

Discussion:
Agenda for 53rd GSTCM Volume 2
Page 114 of 189
EVP, GSTN stated that issue pertained to appeal orders APL 04 or APL 02 which have been
remanded back by the Hon’ble HC of various States. In system, the remand back functionality was
not available earlier and a data fix had to be done. Appeal application ARNs were restored to “Appeal
Submission” stage. They further informed that the functionality had since been developed and was in
production for demand and refund orders. In the said 16 cases, a data fix was undertaken.
Decision: ITGRC took note of the data fixes done by the GSTN.

6(c).3
S. No.
Issue reported No. of Cases
Impacted
Module Detailed Description Status
1 2 3 4 5 6

3.
Non-filing of
ITC-01 within
the prescribed
period
1 ITC-01
The taxpayer M/s Anupam
Electricals (GSTIN:
09AEXPA7281G1Z1) has
opted out of composition
scheme on 7th January, 2023.
He was allowed to file ITC-
01 form within 30 days of the
said date. However, he could
not file the form within the
time period.
There was no defect in the
System Application, but the
taxpayer has got the relief
from Hon’ble High Court.
To comply the orders
of Hon’ble H.C order,
the taxpayer was
allowed to file the said
form to claim the
credit. The state
confirmed that they
have accepted the
order and are not
filing appeal.
ITC amounting to Rs.
31,18,718/- has been
credited to the ledger
after filing of the said
form.

Discussion:
EVP, GSTN stated that the issue was that a taxpayer converted to normal from the composition
scheme but did not file ITC-01 within 30 days as required by the law. The taxpayer approached the
Hon’ble High Court for relief. The taxpayer got relief from the Court and the Court allowed him to
file ITC-01. Further they informed that they had discussed the matter with the State of UP, where the
taxpayer was registered and confirmed that the State had informed that the order has been accepted
and the taxpayer may be allowed to file. GSTIN enabled the same and the taxpayer had now filed the
ITC – 01.
Decision: ITGRC took note of the same.
6(d) Other issues presented during the meeting
Thereafter, EVP, GSTN presented two other cases during the meeting. One was about a VIP reference
and the other one was about a person who had excess of cash ledger balance. The details of the cases
are mentioned below:
Agenda for 53rd GSTCM Volume 2
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6(d).1
S.
No.
Issue reported No. of Cases
Impacted
Module Detailed Description Status
1 2 3 4 5 6

1.
To Re-open
GST Portal for
M/s Deoria
Papers Mills
Ltd to file their
TRAN forms
1 TRAN
Hon’ble Supreme Court Order, ordered
for GST Portal to be opened from
01.10.2022 to 30.11.2022 for aggrieved
taxpayers to file their TRAN forms.
The taxpayer grievance on GST Portal on
26.11.2022 that they were unable to file
the TRAN form due to some technical
glitch. The said grievance was
acknowledged, and the taxpayer was
communicated that the resolution is under
process and they will be informed once
the issue is resolved.
After the resolution, the window was re-
opened for the TP to file TRAN form. To
inform the TP, 6 reminders were sent
between 27th Dec 2022 to 4th January
2023. However, despite the reminders, the
taxpayer neither filed his TRAN form nor
reported any technical difficulties on GST
Portal.
The filing of TRAN form for all the
taxpayer was finally closed on 05th
January, 2023.
ITGRC to
provide
decision for re-
opening the
TRAN form for
the taxpayer.

Discussion:
GSTN stated that a VIP reference was received in case of M/s Deoria Paper Mills located in Uttar
Pradesh. As per the Hon’ble Supreme Court orders, the TRAN-1 and TRAN-2 forms were opened
and the last date of filing was 30.11.2022. However due to technical glitch, GSTN kept it open till
05.01.2023 for this particular taxpayer. The taxpayer initially tried to file TRAN-1 but as he faced
some technical difficulty, he filed a ticket, which was resolved by GSTN. After resolution, six
Agenda for 53rd GSTCM Volume 2
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reminders were sent between 27.12.2022 to 04.01.2023 to the taxpayer to file TRAN -1 but the
taxpayer did not act on it. Eventually the filing window was closed on 5.01.2023. Now the VIP
references were coming, forwarding his letter that he should be allowed to file the TRAN-1.
On being enquired by JS, GSTCS about the financial implication in this issue, GSTN replied that the
further course of action in this case may be decided by the ITGRC and the data on amount of credit
involved in this TRAN-1 matter is currently not available.
Chairman enquired about the legal implications and whether this relaxation could be given for
individual applicants.
EVP, GSTN responded that they had resolved the technical difficulty which were being faced by this
taxpayer in Filing TRAN-1 and had sent sufficient reminder e-mails also.
CCT West Bengal stated that the taxpayer had attempted to file TRAN-1 within stipulated timeline
but due to some technical glitch he could not do so. GSTN removed those glitches and e-mailed him
regarding this, but he did not act upon it. The basic thing remained that he had attempted to file within
time.
Pr. CC, CGST Delhi Zone clarified that instructions were there to cover cases where a taxpayer had
already filed his TRAN-1 and there were enough footprints in the system that he was trying to file it
but it was not getting through. So, this grievance committee i.e. ITGRC should allow those cases
because he was denied the opportunity to file the TRAN-1 due to the system glitches. If there were
enough proofs in the system that he had attempted to file but could not get through because of the
system failure, then he should be allowed. Otherwise, he would have to get directions from Hon’ble
Supreme Court in this regard.
Chairman, ITGRC stated that we may accept this view.
Additional Commissioner, Haryana agreed with the Chairman ITGRC.
Chairman ITGRC directed that such cases may be brought as a table agenda.
Decision: ITGRC approved the opening of TRAN forms for M/s Deoria Papers Mills to enable them
to file the same.
6(d).2
S.
No.
Issue reported No. of Cases
Impacted
Module Detailed Description Status
1 2 3 4 5 6

2.
Issue in adjustment of
excess tax paid with
RCM liability
1 Returns
Taxpayer reported that while
filing GSTR 3B for the month of
Nov. 2022, the CGST amount
under RCM liability mentioned
in table 3.1d (inward supplies
liable to reverse charge) was not
reflecting in Table 6 (Payment
of Tax details). Upon analysis, it
was found that the system was
auto adjusting the Excess paid
The taxpayer is asking
either for a refund of
the remaining excess
tax collected or to shift
the amount to the ITC
ledger so that the same
can be used for other
than reverse charge
liability.
Agenda for 53rd GSTCM Volume 2
Page 117 of 189
tax by the taxpayer from his
reverse charge liability.
Upon technical analysis it was
found that the taxpayer paid
excess tax of Rs. 7,90,126/- in
July 2017 through double debit
of cash ledger and ITC ledger
and the system was built to
accept the excess tax payment.
Over the course of years his
excess tax collected is getting
adjusted in the Reverse Charge
Liability due to the transaction
code of 90018 which was
designed for adjustment of
negative liability, and it can be
adjusted into only reverse
charge liability. Hence the
system is adjusting the negative
liability with Reverse charge
CGST only and the remaining
negative liability amount is Rs.
4.58 lakh.
Note- If refund is filed
by the TP under
Excess payment of
Tax category (July
2017), it will be time
barred. The solution
available is to give the
excess paid amount in
ITC ledger through
data fix.

Discussion:
EVP, GSTN stated that this case was about the adjustment of excess tax paid by the taxpayer with the
RCM liability. GSTN had received a ticket from the taxpayer that he had filed GSTR-3B in July,
2017 and his account was debited twice. Cash ledger and the ITC ledger both got debited with the
liability and thus, excess tax amounting to Rs. 7,90,126/- was paid.
Further, when the taxpayer filed his returns, the liability in RCM got adjusted due to an adjustment
code that was written down in 2016-17. Whenever any taxpayer paid excess tax liability then the
transaction code of 90018 would auto apply and the liability would get adjusted by the system in the
RCM liability. This particular taxpayer did not have much RCM liability, thus for the last 4-5 years, it
was getting auto adjusted and Rs. 2.5-3 lakhs had been auto adjusted till now. The taxpayer has
requested that either the excess tax payment might be transferred to his ITC ledger so that he could
use it for other than reverse charge liability or the same might be refunded back.
CCT West Bengal stated that the taxpayer could apply for refund for excess cash ledger in that case.
EVP, GSTN replied that the excess amount paid was not available in cash ledger.
Chairman, ITGRC stated this issue should be presented as an agenda point in the next meeting of the
ITGRC.
Decision: Issue to be taken up as an agenda point in the next meeting of the ITGRC.
Agenda for 53rd GSTCM Volume 2
Page 118 of 189
Additional Discussions
JS, GSTCS stated that there were five points carried over from the previous meeting for discussion.
Chairman, ITGRC advised that these outstanding points could be shared with GSTN and GSTN
would give update on these points in the next ITGRC meeting.
To summarize, 38 issues including 3 court directions were presented by GSTN for the
consideration of ITGRC during its 20th meeting.
 21 issues impacting 11387 cases where there were technical issues with no financial
implication and where data was known were presented by GSTN. ITGRC took note of the
data fixes in those 11387 cases and directed that permanent fix for cases where
Registration Certificate was not displaying more than 400 additional places of business to
be done in the next three months. Also, permanent fix permitting Aadhaar Authentication
of foreign nationals to be implemented by June, 2024.
 12 technical issues affecting locally with financial implications and where the correct data
was known were thereafter discussed impacting 76,546 cases involving an amount Rs.
4894 crores. ITGRC directed that list of cases related to Electronic ITC ledger credited
while filing TRAN-2, where credit had been utilized by taxpayers before verification by
officers to be sent by GSTN to jurisdictional officers for checking the interest liability and
list of 75,732 cases related to Data mismatch issue between Hbase & Ledger in GSTR-3B,
of possible short payment of about Rs. 4823 crore to be sent to jurisdictional officers by
15.1.2024 for necessary action. ITGRC noted that an amount of Rs. 6.47 lakh is pending
recovery in case of updation of Consumer Welfare Fund flag when partial refund amount
is sanctioned by the officer. ITGRC directed that the same may be monitored till recovery.
In case of System generated IGST refund applications (RFD 01s) for the duplicate records
sent by ICEGATE, Rs. 2.38 crore has to be recovered from the taxpayers. ITGRC noted
that an amount of Rs. 98.96 crore has been recovered/reversed, Rs. 5,500/- had been
refunded and an amount of Rs. 2.44 crore is pending recovery. Also, the list of 75,732
cases with possible short payment of Rs. 4823 crore needs to be sent to jurisdictional
officers for verification.

 ITGRC also took note of the data fixes carried out by GSTN in case of 3 Court Directions
impacting 18 cases.

 Two cases were presented during the meeting. One was request in case of M/s Deoria Papers
Mills Ltd to-reopen GST Portal to file TRAN forms and other was issue related to adjustment
of excess tax paid with RCM liability. ITGRC approved the opening of TRAN forms for M/s
Deoria Papers Mills to enable them to file the same. The second issue was deferred till the
next meeting of the ITGRC.

Chairman, ITGRC thanked all the members for so patiently attending the long meeting and for their
valuable contribution.

Agenda for 53rd GSTCM Volume 2
Page 119 of 189
Annexure-1
Centre:
i. Member (GST), CBIC – Sh. Shashank Priya (Chairman, ITGRC)
ii. Pr. Chief Commissioner, CGST, Delhi Zone – Sh. Rajesh Sodhi
States:
i. Commissioner, State Tax, West Bengal – Sh. Khalid Aizaz Anwar
ii. Additional Commissioner, Haryana – Dr. Hemant Kumar
iii. Joint Commissioner, e-Gov, SGST, Gujarat – Sh. Dharmesh Goyani
iv. Joint Commissioner, State Tax, Tamil Nadu – Thiru E. Muniyasamy
GST Council Secretariat:
i. Additional Secretary, GSTCS- Sh. Pankaj Kumar Singh
ii. Joint Secretary, GSTCS- Ms. Ashima Bansal
iii. Joint Secretary, GSTCS- Ms. B. Sumidaa Devi
iv. Director, GSTCS- Sh. Kshitendra Verma
Special Invitees:
i. Executive Vice President, GSTN- Sh. Dheeraj Rastogi
ii. Executive Vice President, GSTN- Sh. Nirmal Kumar
iii. Vice President, GSTN - Sh. Jeyanth Malaiyandi
iii. Vice President, GSTN- Sh. Jagmal Singh

Agenda for 53rd GSTCM Volume 2
Page 120 of 189
Annexure-2
Agenda on Data Fix issues
Technical Issues Requiring Data Fix of the Processed Incorrect Data through Backend
Utilities

The changes in GST law / Rules, the representations received from taxpayers and
other stakeholders require alterations to be continuously made in the GST System. GSTN
has therefore adopted an agile methodology of developing applications for GST System
keeping it modular to handle frequent changes in law and rules incorporated in a running
application. This has necessitated integrating all new application changes downstream
being dependent on the module undergoing the change and led to following concerns:
 Some corner scenarios owing to varying taxpayer actions and system
behaviour, when subjected to heavy load, go unhandled leading to
inconsistent data persisting in GST System.
 The data inconsistencies vary from ledger getting improper
debits/credits, the return details stored in the system having incorrect
information relating to situations where an irreversible commit has
happened in the database.
 No option available to taxpayer to seek remedy in GST System leading
to a need of performing data fixes through auditable utilities.

These issues generally have been noticed after

 A complaint is raised by taxpayer/ tax officer
 Result of a periodic internal and external audits.

In order to resolve these issues, the processed incorrect data requires fixing,
collecting correct data besides solving the software/platform issues being faced by
respective stakeholders. Accordingly, GSTN has initiated fixing of technical issues
identified, as per the SOP approved by the ITGRC in the15 th meeting held on
12/08/2021, which is as below:
i. Analysis of data discrepancy.
ii. Confirmation of discrepancy sought from MSP.
iii. Upon confirmation, utility to be created by MSP to extract similar cases
from GST System data.
iv. A root cause analysis conducted to fix the issue and implemented by MSP
in consultation with GSTN to rectify data inconsistency.
v. Scripts created for data fix and tested in multiple cycles by MSP and GSTN.
vi. Approval note presented to competent authority to fix the issue.
vii. After approval, audit entries created for each change affecting the data.
viii. Scripts executed and post execution state of data stored for reference later.
ix. List of all such changes to be presented and explained to GST policy wing
& ITGRC and periodic internal audit also to be undertaken.

Data Fix cases are accordingly presented to ITGRC for deliberations and
decision as mentioned in the attached Annexure.
Agenda for 53rd GSTCM Volume 2
Page 121 of 189
Annexure
Technical Issues Requiring Data Fixes through Backend Utility
(Period -1
st
April, 2023 to 31
st
October, 2023)
Cases Requiring Internal Approval of SVP, EVP/CEO or Post facto Approval of ITGRC

S.
No.

Issue
reported
Appro
ved
By
Date
of
Appro
val
No.
of
Case
s
Imp
acte
d
Fina
ncial
Impl
icati
on
Modul
e
Corr
ect
Data
Kno
wn /
Not
Kno
wn
Detail
Description
Status
1 2 3 4 5 6 7 8 9 10
Cases having no financial implications
1
a. User
unable to
open
core/non-
core
amendment
application.
b. End user
was unable
to see newly
added
Additional
Place Of
Business
(APOB) .
c. End user
unable to
see amended
Registration
Certificate.


EVP
(Servi
ces)
12.10.
2023
4 No
Regist
ration
Kno
wn
a. End user is
not able to open
fresh core/non-
core application
as data from all
the master tables
is not getting
loaded within
optimized time
limit. This is
happening with
large firms who
are having high
count of
Additional Place
of Business.
b. End user is
not able to see
list of newly
added APOB in
amended
Registration
Certificate as
database
transaction is
not getting
completed
within
optimized time
limit, as a result
master tables are
not getting
updated. This is
happening with
large firms who
are adding 400+
Data fix has
been done on
ticket basis.
RQM 26195
has been
generated to
permanently
fix this issue.
Agenda for 53rd GSTCM Volume 2
Page 122 of 189
new Additional
Place of
Business
(APOB) in one
go.
c. End user is
not able to see
amended RC as
database
transaction is
not getting
completed
within
optimized time
limit as a result
master tables are
not getting
updated. This is
happening with
large firms who
are adding 400+
new APOB in
one go.
2
For a
migrated
taxpayer,
the photo of
primary
authorised
signatory
and director
got
interchange
d in
Registration
certificate
(RC) when
the TP
applied for a
core-field
amendment.
EVP
(Servi
ces)
09.10.
2023
1 No
Regist
ration
Kno
wn
At the time of
migration,
member
identifier
generated by
utility was not
created correctly
and as a result
same identifier
for two persons
was generated.
Subsequently
the taxpayer
applied for core
field
amendment,
photo of the
director got
overridden with
photo of director
via batch job
which is
responsible for
RC generation.
Data fix
done.
3
Change of
effective
date of
cancellation
of
registration
EVP
(Servi
ces)
06.10.
2023
1 No
Regist
ration
Kno
wn
A GSTIN
08BOTPK4490J
2Z6 has been
cancelled with
effect from 31-
03-2020 but as
Data fix
done.
Agenda for 53rd GSTCM Volume 2
Page 123 of 189
for GSTIN :
08BOTPK4
490J2Z6
per order of
Chief
Commissioner
State Tax,
Rajasthan the
GSTIN
08BOTPK4490J
2Z6 was liable
to be cancelled
from effective
date 05-06-
2018.
4
Issue in
core-
amendment
due to
incorrect
PAN details
EVP (
Servic
es)
11.05.
2023
1 No
Regist
ration
Kno
wn
At the time of
migration to
GST, the
taxpayer has
submitted his
old inactive
PAN. The old /
inactive PAN
has been
surrendered and
the new PAN
has not been
updated in this
GST
registration. The
functionality to
edit PAN is not
available in the
portal. This has
put the applicant
in the state of
deadlock as
portal does not
allow the
amendment in
the partnership
of the said firm.
Data fix done
(Current
amendment
application
was deleted
from the
system to
allow the
user to file
new
amendment)
5
Issue in
registration
end date for
casual
taxpayers
EVP(
Servic
es)
13.04.
2023
39 No
Regist
ration
Kno
wn
The registration
end date of
casual/NRTP
taxpayers for 39
users was
showing as Null
in the system.
As the end
registration date
was null, users
were facing
issue in
updating
invoices for
Registration
end date was
updated in
master table
via data
fix. For
permanent
fix, RQM
26172 has
been raised.
Agenda for 53rd GSTCM Volume 2
Page 124 of 189
certain dates in
GSTR-1.
6
Incorrect
calculation
of GSTR1-
GSTR3B
mismatch
and
incorrect
creation of
DRC01B.

EVP
(Servi
ces)
27.07.
2023
2 No
Return
s
Kno
wn
An incorrect
DRC01B was
getting created
for June2023
when user tried
to generate
summary of
GSTR1 for July
2023 before the
due date of
GSTR3B (June
2023) without
filing June 2023.
The spike
calculation b/w
GSTR-3B &
GSTR-1 is
based on auto-
calculation. As
the mismatch
calculation
happens only
after filing
GSTR3B but the
TP has not filed
GSTR3B (i.e.,
June 2023) so
there is no data
for mismatch of
GSTR1-
GSTR3B. And
the current spike
rule check is not
blocking the
user from
generating
summary of
GSTR1 of
current return
period (i.e., July
2023)
before due
Permanent
fix is
deployed in
production
Agenda for 53rd GSTCM Volume 2
Page 125 of 189
date of previous
return period
GSTR3B (i.e.,
June 2023), due
to which the
system is trying
the check
directly for
GSTR1-
GSTR3B
mismatch which
does not exist,
so as a fallback
mechanism the
system
calculates the
mismatch on
GSTR1 filing
data and
GSTR3B save
data of previous
return period
(i.e., June 2023).

7
Issue in
filing
GSTR-3B
after opting
for
composition
scheme
EVP
(
Servic
es)
10.10.
2023
1 No
Return
s
Kno
wn
While checking
in database, it
has been found
that liability
posted in the
liability register
was not paid by
the tax payer. It
had happened
due to defect in
the system
application
during 2017-18.
Since the return
in form GSTR-4
was not filed but
only submitted
for the tax
period Oct-Dec
2017, therefore
entries in the
liability register
RQM#25614
has been
raised to fix
this issue.

Agenda for 53rd GSTCM Volume 2
Page 126 of 189
were deleted
through utility
and the taxpayer
was enabled to
file GSTR-3B of
Dec 2017.

8


Reset cases
in GSTR-3B
(Partial
commit
happened
on click of
reset button
while filing
GSTR- 3B)

EVP
(
Servic
es)
12.09.
2023
2 No
Return
s
Kno
wn
It may be
recalled that
initially, there
was a four-tier
system of filing
return in Form
GSTR-3B, viz.
Save, Submit,
Offset liability
and File. All
saved entries
used to become
non-editable
after clicking on
‘Submit’ button.
Liability register
and Credit
ledger used to
be updated at
submit stage.
In the
beginning, lot of
complaints used
to be received
due to freezing
of entries before
filing (at submit
stage). In the
beginning,
returns lying at
submit stage
were reset from
the backend as
lot of
complaints were
received on
account of
inadvertent
Permanent
fix is not
required
because
RESET
button is
removed
from system.
These are the
cases raised
by taxpayers
prior to the
implementati
on of RESET
button.

Agenda for 53rd GSTCM Volume 2
Page 127 of 189
mistakes.
Taxpayer
clicked on
“Reset” button
with intention to
clear liabilities
posted in ledger
and the submit
entry posted in
return database.
Rollback
happened in
return database
but entries in
ledger didn’t
happened which
were also
supposed to be
rolled back.
Return period
involved is
10/2017

9
Taxpayers
were not
able to pay
GSTR-3B
liability as
‘Make
Payment’
button was
not working
EVP
(Servi
ces)
02.06.
2023
2 No
Return
s
Kno
wn
Taxpayers were
not able to pay
his liabilities for
GSTR3B by
clicking on
"MAKE
PAYEMENT/P
OST CREDIT
TO LEDGER"
button, hence
not able to file
GSTR3B.
Two taxpayers
had submitted
GSTR3B for tax
period
November 2017
and did not file
GSTR3B. Now,
interest has also
been levied in
GSTR3B and
Data fix
done. As
frequency of
these types
of cases are
very less
likely,
therefore no
code fix is
required.

Agenda for 53rd GSTCM Volume 2
Page 128 of 189
due to this code
change,
taxpayers are
unable file
GSTR3B for the
above said tax
period.
This issue is
coming for users
who had saved
their GSTR3B
in years when
interest was not
mandatory and
not filed it yet.
When they
subsequently
come to file the
GSTR 3B,
system notices
that the format
has changed and
the interest is
payable and
hence not
allowing them
to file the saved
return.

10


Electronic
ITC Ledger
incorrectly
debited
from new
GSTIN
instead of
old GSTIN
while filing
ITC02.

EVP
(Servi
ces)
12.07.
2023
1 No
Return
s
Kno
wn
While filing
ITC02 for
transfer of ITC
from the old
GSTIN (closed)
to new GSTIN,
the system has
transferred the
amount from
new GSTIN to
old GSTIN.
This has
happened
because the
taxpayer has
provided same
It was
executed on
21-07-2023
vide ICR -
22036.
Agenda for 53rd GSTCM Volume 2
Page 129 of 189
phone number
for both the
GSTIN - Old
(09ABHPC7139
C1ZW) & New
(09BSMPS2087
J2ZY) and due
to which system
has encountered
the issue.

11
Error in
GSTR-7
filing-
Deductor
was unable
to file
GSTR-7 due
to issue in
flowing of
rejected
record from
TDS/TCS
received
from (R2X)

EVP
(
Servic
es)
25.05.
2023
1 No
Return
s
Kno
wn
GSTR-7 user
had amended
the 072021
records in
082021 return
period because
GSTR2X user
had not taken
any action in
R2X on 072021
records but
accepted the
082021 record
auto-populated
from
amendment
table of GSTR7.
The original
record in R2X
was supposed to
be deferred but
due to technical
glitch it had not
so happened.
GSTR2X user
took action on
072021 records
and rejected the
072021 record
in 032023. Due
to this the
GSTR7 user
was not able to
file the return
for the March,
It was
executed on
15-06-2023
RQM-
22154.

Agenda for 53rd GSTCM Volume 2
Page 130 of 189
2023 period

12
GSTR 7
Filing status
of GSTR7
was struck
in ‘In
Progress’
stage.
TDS/TCS
Received
Form not
populated
after GSTR-
7 Filing
Filing status
of GSTR9
was not
updated
properly.
Taxpayer
had filed
CMP08, but
Filing Status
was not
updated to
‘FIL’
Filing status
of GSTR8
by ECO was
stuck up ‘In
Progress’.
EVP
(
Servic
es)
24.03.
2023
GST
R7
Form
– 5
case
TDS/
TCS
Rece
ived
Form
– 3
case
GST
R9
Form
– 15
case
CMP
08
Form
– 1
case
GST
R8
Form
– 1
case
No
Return
s
Kno
wn
4. Due to
non-updation of
filing status of
previous tax
period’s return
filed in FORM
GSTR7 by the
deductor, the
return of
subsequent tax
period could not
be filed.
5. DB
insertion was
not happened
into
RETURN_FILI
NG_STATUS
table and not
updated in
cache.
6. Filing
status not
updated in Data
base
4. GST
R7 : It was
fixed vide
ICR-22061
(RQM
10022) on
02-08-2023
and vide
RQM-
22154 on
15-06-2023
and return
status is
‘Filed’ now.
5. TDS/TCS: It
was fixed on
23-06-2023
vide ICR-
21213
(RQM-
13465).
6. GSTR9/C
MP08/GS
TR8: It
has been
fixed.

13

Error while
auto-
populating
details in
table 4A and
4B of
GSTR-4
EVP
(
Servic
es)
14.07.
2023
2 No
Return
s
Kno
wn
Taxpayer
attempted to file
his GSTR4
Annual but auto
population of
data in table 4A
and 4B from
GSTR-4A was
It was
executed on
18-07-2023
and 07-09-
2023 vide
ICR – 21971
& 22697.
Agenda for 53rd GSTCM Volume 2
Page 131 of 189
(Annual).

not successful.
As per the
existing
implementation,
data in table 4A
& table 4B of
GSTR-4 is auto-
generated from
GSTR-4A.
.However this
activity was not
successful as the
SQL connection
timeout
exception due to
large data.


14
Incorrect
data getting
auto-drafted
in table 5 of
GSTR-4
Annual
return.

EVP
(
Servic
es)
16.10.
2023
2 No
Return
s
Kno
wn
Taxpayer
attempted to file
his GSTR4
Annual Return
but auto
population of
CMP08 data in
table 5 of
GSTR-4 Annual
is getting
populated
incorrectly
This has
happened
because total
value for
Taxable
Amount, CGST
& SGST of
HBase has
incorrect value.
Proposed
solution is to
update the value
of Taxable
Amount, CGST
& SGST with
Actual value in
It has already
been
executed.
Agenda for 53rd GSTCM Volume 2
Page 132 of 189
HBase
(GSTR4X Filing
Summary table)
by running an
utility
(ReturnR4CMP
08Utility).

15
Date format
mismatch in
Offline tool
of ITC-01
(Invoice
date format
was
different in
offline tool
than
required.)
EVP
(
Servic
es)
03.10.
2023
&
17.10.
2023
3 No
Return
s
Kno
wn
System is giving
error “Type
Mismatch”
while adding
invoice in
ITC01 offline
tool and
taxpayer was
unable to file
ITC01-18(1)(c)
within the due
date.
This had
happened as
taxpayers copied
the invoice date
into ITC01
Offline Tool and
date format
expected by the
tool was
incorrect.
However, no
proper
validation exists
for date field in
the tool and
mismatch
runtime error
was shown to
user.

Defect was
fixed on
production
via RQM-
24876 &
25757 on 1-
Oct-23.
However,
since the due
date for
filing ITC01-
18(1)(c) was
over, the
ITC01 was
reopened for
filing.

Agenda for 53rd GSTCM Volume 2
Page 133 of 189
16
Correction
in cash
ledger
balance due
to
credit/debit
happened
simultaneou
sly.

EVP
(
Servic
es)
03.10.
2023
21 No
Return
s
Kno
wn
The issue has
occurred due to
debit and credit
entry happening
simultaneously
in the cash
ledger, due to
which balance
was not updated
properly for 23
taxpayers. These
23 cases
pertains to the
period - Dec
2022 to June
2023. Out of 23
cases, 21 are
registered
taxpayers and 2
have already
been cancelled.
It is happening
due to defect in
the application
which is being
looked after
separately
Data fix was
done on 27
Oct 2023 via
ICR#23364

17a
Transfer of
Cash
Ledger
Amount
from
Temporary
Registration
to GSTIN
with same
PAN.

EVP
(Servi
ces)
30.10.
2023
1 No
Return
s
Kno
wn
The challan
amount of
Rs.10,34,775/-
was deposited in
GST
No.1723000000
17AR5(Tempor
ary) meant for
Advance
Ruling. This
amount cannot
be used for any
other purpose as
there is no
functionality for
setting off
against any
demand or
claiming refund.
Functionality
to restrict
payment
(more than
required
amount)
through
Challan for
Advance
Ruling Temp
ID users is in
pipeline.
Data fix is
done for this
particular
case.

Agenda for 53rd GSTCM Volume 2
Page 134 of 189
The taxpayer
has ignorantly
deposited
amount in Temp
ID for Advance
Ruling through
Challan facility.

17b
Reversal of
cash balance
from
provisional/i
nactive
GSTIN to
Active
GSTIN

EVP
(Servi
ces)
12.09.
2023
100 No
Return
s
Kno
wn
While
transferring
amount through
Form GST
PMT-09 from
cash ledger to
another GSTIN
registered on the
same PAN, in
100 cases
(Ledger
reference
numbers),
amount was
transferred to
inactive
taxpayers also
who were not
migrated to GST
and have no
credentials to
carry out any
business
transaction on
the portal.
This error
happened in past
cases due to
defect which has
now been fixed.
Ledger amount
to be transferred
to the active
PAN of the
GSTINs.

Permanent
code fix has
already been
done vide
CR#24869.
The issues of
impacted
taxpayers
have been
fixed.

Agenda for 53rd GSTCM Volume 2
Page 135 of 189
18
For the
category of
“Excess
cash ledger
balance”, in
case
deficiency
memo is
issued, the
amount
debited
while
applying
refund
application
is not
crediting
back to the
cash ledger.

EVP
(Servi
ces)
Differ
ent
dates
3 No
Refun
d
Kno
wn
For the refund
applications
AA0603230178
70K dated
12.03.2023,
AA2902230726
537 dated
24.02.2023 and
AA0806230675
93Y dated
26.06.2023 (all
belongs to the
category of
Excess cash
ledger balance
refund), the tax
departments
have issued
Deficiency
memo.
However, the
amount debited
at the time of
filing of refund
applications
were not
credited to the
Applicant’s cash
ledger due to
technical issue.

Permanent
solution is
given in
September
2023 wherein
the option of
issuance of
Deficiency
memo was
removed for
Excess cash
ledger
balance
refund.

19
Issue in
status
update of
taxpayer on
EWB portal.

SVP
(Tech)
10.08.
23
1 No
E-way
bill
Kno
wn
The status of
taxpayer was
BLOCKED on
EWB portal due
to non-filing of
GSTR-3B.
However, after
filing the return
GSTR-3B the
status on EWB
portal was not
getting updated
from “Blocked
to Unblocked”.
The taxpayer
was
The status
was
manually
updated to
UNBLOCKE
D.

Agenda for 53rd GSTCM Volume 2
Page 136 of 189
UNBLOCKED
from NIC end,
therefore on
GST portal the
status was
manually
updated to
UNBLOCKED
in our database.
This happened
during peak
filing; because
of batch load the
user’s
“STATUS” was
stuck in
“Blocked”
status. Reason is
because of batch
load the user’s
“STATUS” was
stuck in
“Blocked” for
of which
taxpayer is not
able to generate
E-way bill.

20
Export
Invoices
were not
transmitted
to
ICEGATE
from GST
portal for
IGST
refund.

EVP
(Servi
ces)
30.10.
2023
11,17
3
No
Refun
d
Kno
wn
The export
invoices were
not transmitted
to ICEGATE
because the
export ledger is
updated
incorrectly by
GST system.
Export ledger is
maintained for
each taxpayer
with the values
of liability
(Table 6)
reported in
GSTR 1 and the
payment(Table
Team has
already
completed
code fix, and
the same is
planned to be
deployed
during next
window.
Meanwhile,
the DB scan
has been
done for
similar cases
between June
to Oct 2023 –
data fix will
be done for
Agenda for 53rd GSTCM Volume 2
Page 137 of 189
3.1(a)) made in
GSTR 3B.
Invoices are
transmitted to
ICEGATE if
Payment in
GSTR 3B >=
liability reported
in GSTR 1.
Invoices are not
transmitted to
ICEGAGE due
to negative
balance in the
export ledger.
The reason is
that the SEZ
invoices from
Table 6B of
GSTR 1 is
computed twice
by the GST
system. It
resulted in more
liability and
negative balance
in export ledger.
That’s why,
invoices are not
getting
transmitted to
ICEGATE for
the exporters
who reported
SEZ supply.

the impacted
cases.

21
Aadhar
Authenticati
on of Non-
resident
Will
be
decide
d in
ITGR
C
N. A. 1 No
Regist
ration
Kno
wn
A foreigner is
restricted from
performing
Aadhar
authentication in
GST system. As
this GSTIN is
having other
directors
Code fix has
to be done to
allow
residents to
perform
Aadhar
authenticatio
n. This will
take time and
Agenda for 53rd GSTCM Volume 2
Page 138 of 189
mentioned as
“Promoter/Partn
er” tab, system
is expecting for
AA for refund
functions.
However, the
CEO & MD of
Air India is a
foreign national
but having
Aadhar and
wants to do
Aadhar
authentication.

The following
persons are
required to do
Aadhaar
Authentication
in GST system:
1. Primary
Authorised
Signatory
(PAS);
2. Indian Citizen
mentioned in
Partners
Promoters tab.
In case, all the
persons mention
ed are non-
resident, then
system is not
asking non-
resident to do
Aadhaar
Authentication
and Status of
Aadhaar would
be Aadhar
validated if PAS
has completed
Aadhaar
if ITGRC
agrees data
fix can be
done. When
data fix is
done, the
status will be
shown as
Aadhar
authenticated
both to the
taxpayer and
tax officer.

Agenda for 53rd GSTCM Volume 2
Page 139 of 189
Authentication
and system will
allow taxpayer
to file refund.
In instant case
(ticket no.
2023112111659
366), the
taxpayer has
Indian Director
and hence
system is not
allowing
taxpayer to file
refunds and
treating Aadhaar
as
unauthenticated.
The above has
been developed
as per the
requirements
received by us.
This is as per
the expected
system
behaviour.












Agenda for 53rd GSTCM Volume 2
Page 140 of 189
S.
No.

Issue
reported
Approve
d By
Date
of
Appro
val
No.
of
Case
s
Imp
acte
d
Financi
al
Implica
tion
Mod
ule
Correct
Data
Known
/ Not
Known
Detail Description Status
1 2 3 4 5 6 7 8 9 10
Cases having financial implications
1
Excess
amount
credited
to the
cash
ledger of
suppliers
on
account
of TCS
EVP
(Services)
20.07.
2023
1 Yes
Retur
ns
Known
E commerce operator
(ECO, GSTR8 user)
has filed GSTR8 for
the return period of
Jul 2022 on 08th Aug
2022. Supplier has
accepted this record
for Jul 2022 return
period and he has
filed the return on
11th Aug 2022.
Due to technical
glitch, status was not
updated as FIL in
return filing status
table. Because of this
issue, system allows
ECO to self-amend
this record in Nov
2022. While doing
self-amendment
ECO has performed
downward
amendment.
Supplier again
accepted this
amended record in
Nov 2022 period
through which he
claimed the credit
twice for the single
record.
During compute
liability, entry went
to ledger. But due to
issue with Kafka the
status was not
updated to FIL in
It has
been
fixed.
Agenda for 53rd GSTCM Volume 2
Page 141 of 189
Return Filing Status
table.
Since status was not
updated to FIL,
GSTR8 user has
changed the data
which was already
saved and it again
got populated. Auto
populated value at
R2X user is hence
greater than what
GSTR8 user has
filed. Due to that
R2X user has
claimed the excess
amount which has to
be recovered from
R2X user.

2
Electroni
c ITC
ledger
credited
while
filing
TRAN-2
EVP
(Services)
05.06.
2023
369 Yes
TRA
N
Known
Taxpayers who have
filed their TRAN-2
return via DSC
filing, during period
from 29-09-2022 to
30-11-2022 got the
electronic ledger
credited as per their
filing amount at the
same time of filing
instead of getting
Electronic ITC
Ledger after
verification through
BO- tax official flow.

The
defect
was fixed
on 28th
April
2023 via
RQM
24409.

3
Error in
filing
GSTR-3B
due to
balance
liability
EVP
(Services)
10.07.
2023
10 Yes
Retur
ns
Known
In the initial period
of implementation of
the GST, in
composition return
filed in form GSTR-
4, there were two
stages of filing i.e.
Submit & File.
System used to
No
changes
is
required
to be
made in
the
applicatio
n
Agenda for 53rd GSTCM Volume 2
Page 142 of 189
compute late fee up
to the date of
submission of the
return and the late
fee for the period
between Submit &
File used to be
carried forward to
the next tax period.
The upper celling of
late fee was Rs.
5000/- per tax period.
The addition of late
fee of previous tax
period should not
have been accounted
for the upper celling
but system has kept a
limit of Rs. 5000/- in
this case also. Thus
some tax payers had
paid short late fee
than actual. The
defect was noticed
later on and balance
late fee liability was
posted in the return
due to be filed.
Therefore the
balance amount of
late fee was
recovered and tax
payer filed the return
without any error.
This has happened
because the cap of
late fee of Rs. 5000/-
was applicable for
one tax period and
not for any liability
carried forward from
the previous tax
period.


software
as GSTR-
4
(Quarterl
y) has
already
been
discontin
ued from
April
2019.

Agenda for 53rd GSTCM Volume 2
Page 143 of 189
4
Redunda
nt entries
in ledger
while
filing
GSTR-
4(Annual
)
SVP
(Technolo
gy)
23.06.
2023
3 Yes
Retur
ns
Known
Taxpayer has cleared
the liability and filed
his CMP08/R4X
return but
redundant(multiple)
entries were inserted
in ledger. In cases
where sufficient
balance was
available in
subsequent insertion,
balance was
deducted again and
filing status was
updated to” FIL”. In
cases where
sufficient balance
was not available in
subsequent insertion,
filing status was not
updated to” FIL”.
Solution is to
a) Remove
redundant(multiple)
entries from ledger
and update filing
status as “Filed”
b) Refund of extra
liability deducted
(wherever
applicable)

It was
executed
on 27-06-
2023 vide
ICR-
21690.
Yes;
Refund of
late fee of
Rs. 500/-
(CGST:
Rs. 250/-
& SGST:
Rs. 250/-)
has been
done in
one case.
No
refund
was due
in two
cases.


5
System
error
while
filing
GSTR-4(
quarterly
) form
EVP
(Services)
31.07.
2023
&
10.08.
2023
3 Yes
Retur
ns
Known
System had
computed the late fee
liability at the time of
"Compute Liability'
in GSTR-4
(Quarterly) but later
on not updated the
same when taxpayer
came to file the
return and allowed to
file the return with
short paid late fee.
It was
executed
on 02-08-
2023 and
11-08-
2023 vide
ICR-
22228
and
22362
respective
ly.
Agenda for 53rd GSTCM Volume 2
Page 144 of 189
Thus, balance
amount of late fee
need to recovered
from the taxpayer
which can be paid by
taxpayer voluntarily
through Form GST
DRC-03.
Thereafter, the
status of the return
would be changed to
'FIL' in the relevant
table in the database.
Afterwards, taxpayer
will be able to file
future returns.

The
defect
was fixed
permanen
tly on 04-
08-2023
vide
ECR-
22213
(RQM-
24947)

6
Data
mismatch
issue
between
Hbase &
Ledger in
GSTR-3B
Will be
decided
by
ITGRC.
N.A.
75,7
32
Yes
Retur
ns
Known
6. Taxpayers &
tax officers
have raised
tickets
stating that
the taxpayers
have filed
the GSTR
3B return but
there is a
mismatch in
the data
entered vis-
à-vis
payment
made.
7. The table 6
of GSTR 3B
i.e. the
payment
table is auto-
populated
from values
in table 3 i.e.
Outward
supplies and
table 4 i.e.
ITC Availed.
Post the
payment of
the liability,
the values
are then
Proposed
solution:
1) The
list of the
cases
may be
provided
to the
field
formation
s for
recovery
of the
unpaid
liability
and the
ITC
values
which
have been
claimed
in the
credit
ledger vis
a vis
lesser or
no values
in hbase
tables.
Agenda for 53rd GSTCM Volume 2
Page 145 of 189
posted to the
respective
ledgers i.e.,
the cash, ITC
and liability
ledgers.
8. On reporting
of these
values on the
GST portal,
the data is
thereby
stored in
Hbase tables
in the
backend.
Hbase is a
type of
database
management
technology
used to store
and handle
big data
systems.
9. On technical
analysis of
the issue
reported it
was found
that in
certain
situations a
technical
glitch is
occurring in
the backend
technological
systems
resulting in
storing of
different
values in the
Hbase tables
in the
backend and
the ledger
entries of the
taxpayers.
Further, in
some rare
cases system
also allowed
the returns to
be filed
(This is
the
easiest
solution
with no
technical
developm
ent
involved
and the
number
of cases
per tax
officer
would not
be
unmanag
eable).
OR
2) The
returns
identified
in the
cases
mentione
d above
may
be reset b
y the
system. A
fter the
reset of
the
returns,
the
taxpayers
would be
communi
cated via
e-
mail/SMS
/Phone to
file their
returns
with the
correct
values an
Agenda for 53rd GSTCM Volume 2
Page 146 of 189
without
debiting the
taxes from
the
respective
ledgers.
10. In total, there
are 1,31,907
cases of
mismatch in
data entries
with 98,253
unique
GSTNs
across all
financial
years.
Further, out
of 1,31,907
cases, in
75,732 cases
there is a
possible
revenue loss
of Rs
4,822.96
crores on the
below counts
– a)either
through no
values or less
than Hbase
value entered
in liability
ledger;
b)availing more
value in ITC ledger
than data available in
Hbase
d
correspon
dingly the
tax
officers
would be
informed
so that
they can
facilitate
and
follow up
on the
return
filings.
This
solution
requires
certain
technical
developm
ent
7
System
failure
while
filing
GSTR-4
(quarterl
y) return
EVP
(Services)
05.06.
23,
05.07.
23,
17.07.
23 &
29.08.
23
13 Yes
Retur
ns
Known
Taxpayer has done
the compute liability
before amnesty and
system calculated his
late fee liability as
per the submission
date. Now, taxpayer
has tried to file the
return in amnesty
period and paid the
earlier calculated
liability but got
The
defect
was fixed
permanen
tly on 04-
08-2023
vide ICR-
22213
(RQM-
24947).
The cases
were
Agenda for 53rd GSTCM Volume 2
Page 147 of 189
system error.
Additionally filing
status is not updated
to FIL.
This has happened
because taxpayer has
tried to reset the
filing by clicking
‘RESET’ button, but
there was a bug in
the system that if
more than one return
period is in
submitted status and
taxpayer has tried to
reset the filings then
system has failed to
reset the latest return
period.

executed
on 09-06-
2023, 06-
07-2023,
20-07-
2023 &
31-08-
2023 vide
ICR-
21471,
21814,
22036 &
22604
respective
ly.

8
Recovery
of excess
amount
credited
than TDS
deducted
EVP
(Services)
20.07.
23
1 Yes
Retur
ns
Known
While accepting the
GST TDS for May
2022, excessive TDS
appearing on the
portal is higher than
the amount deducted.
Due to defect in the
System application,
excess amount has
been credited to the
cash ledger of
deductee. Deductor
had paid less tax than
the amount credited
to cash ledger. Team
is analyzing the root
cause.

It has
been
executed
on 28-07-
2023 vide
ICR-
22063
(RQM –
13465).
An
amount
of Rs.
13,15,400
.00/- (Rs.
6,57,700.
00/- for
each
CGST
and
SGST)
was
debited
from cash
ledger of
the
Agenda for 53rd GSTCM Volume 2
Page 148 of 189
taxpayer.
Sufficient
amount
was
available
in the
cash
ledger of
the
taxpayer
at the
time of
debit.

9

Issue in
filing
status of
GSTR-4
(
quarterly
) Return

EVP
(
Services)
02.06.
23
1 Yes
Retur
ns
Known
Taxpayer had filed
quarterly GSTR4
return for the period
of Apr-Jun 2018-19
on 18th July 2018
and paid his liability
but filing status was
not updated to
FILED. Hence, reset
of this return was
done on 15th Oct
2018.
After reset, taxpayer
again filed his
GSTR4 return on
21st Oct 2018 by
once again clearing
his liabilities. Since
the liability was paid
twice, refund was to
be given to the
taxpayer.

It was
executed
on 07-06-
2023 vide
ICR-
21424.
Total
amount
of Rs.
5000/-
(CGST:
Rs.
2500/- ,
SGST:
Rs.
2500/-)
has been
refunded.

10
Error in
filing
GSTR-4 (
Quarterly
)
EVP (
Services)
23.05.
23,
02.06.
23
&
10.07.
23
3 Yes
Retur
ns
Known
The taxpayers were
getting error while
filing CMP-08 form
“Liability for
previous tax period is
yet to be paid.
Transaction handling
was not proper due to
It was
executed
on 29-05-
2023, 08-
06-2023
and 18-
07-2023
vide ICR
Agenda for 53rd GSTCM Volume 2
Page 149 of 189
mix of Transaction
Handling Manager/
Non Transaction
Handling Manager
transactions in
GSTR-4. Due to this,
in case of any failure,
rollback was not
done completely
from all the
respective data
sources. In this case,
filing status has been
updated as ‘Fil’ in
return filing status
table without paying
liability and without
updating ‘No’ in
column ‘Is Open’ of
Return Liability
Master table besides
the rollback of
liability setoff entries
in ledger.

– 21343,
21471
and
21971
respective
ly, to
reset the
returns.

11


Issue in
updation
of CWF
flag when
partial
refund
amount is
sanctione
d by the
officer

EVP (
Services)
18.08.
2023
17 Yes
Refu
nds
Known
When Tax officer
issues refund order
partially sanctioning
to Taxpayer and part
to Consumer welfare
fund (CWF), the
amount sanctioned
to CWF was
crediting to
Taxpayer’s bank
account.
As per the current
functionality,
RFD_R1R2_MAP
table contains the list
of payment order
(RFD 05) which is
being used for
generation of
payment file to
PFMS. The RFD 05
The issue
has been
fixed
permanen
tly. The
17
taxpayers
were sent
e-mail to
pay back
the
wrongly
credited
amount.
Out of
17, 5
taxpayers
have paid
back an
amount
of Rs.
752668/-
Agenda for 53rd GSTCM Volume 2
Page 150 of 189
details in this table is
updated
with CWF flag when
complete amount is
sanctioned to CWF.
However, if part
amount is
sanctioned, CWF fla
g is not updated. This
resulted in
disbursement
of CWF amount into
taxpayer’s account.
(SGST-
486815/-;
CGST-
225117/-
; IGST-
38368/- ;
CESS-
2368/-)
through
DRC 03.
For the
remaining
12
taxpayers
, amount
of Rs.
647861/-
is to be
recovered
. Tax
officers
are
communi
cated to
recover
the said
amount
from
remaining
12
taxpayers
.

12

System
generated
IGST
refund
applicatio
ns (RFD
01s) for
the
duplicate
records
sent by
ICEGAT
EVP (
Services)
03.10.
2023
393 Yes
Refu
nds
Known
ICEGATE transmits
shipping bill details
to GST system for
generation of RFD
01s for Risky
exporters. In this
case, ICEGATE has
resent 1879 shipping
bills for which
refund applications
were already
generated. GST
system generated
duplicate RFD 01s
Total 393
refund
applicatio
ns
amountin
g to Rs
66.89 Cr
were
created.
Out of
these
applicatio
ns, for
365
Agenda for 53rd GSTCM Volume 2
Page 151 of 189
E.

for those shipping
bills which were sent
twice.
GST system has
duplicate check
which contains
Shipping bill
number, SB date, SB
port code, Customs
invoice number and
date. ICEGATE has
transmitted 1879
shipping bills
contrary to the data
exchange protocol by
swapping of MM and
DD values. Ex –
6745216 dated
01.06.2023 has been
retransmitted as
6745216 dated
06.01.2023. It was
considered as new
record by GST
system and RFD 01s
were created for
those shipping bills.

applicatio
ns (Rs
63.12 Cr)
no
actions
were
taken by
the tax
officer.
These
365
applicatio
ns were
purged by
the GST
system.
For the
remaining
28
applicatio
ns, the
refund
has been
processed
by tax
officers.












Agenda for 53rd GSTCM Volume 2
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S.
No
.
Issue
reported
Approve
d By
Date
of
Appro
val
No.
of
Case
s
Imp
acte
d
Financi
al
Implica
tion
Mod
ule
Correct
Data
Known
/ Not
Known
Detail Description Status
1
2
3 4 5 6 7 8
9 10
Matters related to Court Directions
1
Change
in
effective
date of
cancellati
on as per
HC order
EVP (
Services)
27.04.
23
1 No
Regis
tratio
n
Known
The tax payer M/s
Bansal Steels with
GSTIN
07AFKPB3694Q1ZT
applied for
cancellation on
11.2.2019 wherein
mistakenly the
effective date of
cancellation was
mentioned as
1.2.2018 in the place
of 1.2.2019 and the
said cancellation
application was
approved by the
Range officer on
12.2.2019.
The taxpayer
subsequently during
2022 filed
application dated
1.7.2022 under
section 161 of the
CGST Act, 2017 for
rectification of order
u/s 29 of CGST Act,
2017 and also filed
Effective
date of
cancellati
on was
updated
from
backend

Agenda for 53rd GSTCM Volume 2
Page 153 of 189
W.P. (C) 17439/2022
in the Hon'ble High
court of Delhi.
The Hon'ble High
court vide order
dated 1.3.2023
ordered that the
effective date of
cancellation be
considered as
1.2.2019 instead of
1.2.2018 and in
compliance the
Range officer had
passed order dated
15.3.2023
determining the
effective of
cancellation as
1.2.2019.


2
Reverting
APL 01
to
submitted
status as
APL
04/02 has
been
remande
d back by
Hon`ble
High
Courts

EVP (
Services)
Differe
nt
dates
16 No
Appe
al
Known
Requests have been
received from
various states to
enable Appellate
authority to restore
APL 01 where either
Appeal orders APL
04 or APL 02 have
been remanded back
by High Courts of
different States.

Functionality is not
available for remand
back to Appellate
authority.
The remand back
functionality is still
under development,
therefore, the
disposed appeal




Appeal
applicatio
n ARNs
were
restored
to
“Appeal
Submissi
on” stage.
Functiona
lity is
develope
d and
rolled out
in
productio
n as a
Agenda for 53rd GSTCM Volume 2
Page 154 of 189
order has to be given
reset from the status
of “Appeal disposed”
to “Appeal
Submitted” as per
High Court
Directions

permanen
t solution.

3
Non-
filing of
ITC-01
within
the
prescribe
d period
To be
confirmed
by
ITGRC.
N.A 1 No
ITC-
01
Known
The taxpayer M/s
Anupam Electricals
(GSTIN:
09AEXPA7281G1Z1
) has opted out of
composition scheme
on 7th January, 2023.
He was allowed to
file ITC-01 form
within 30 days of the
said date. However,
he could not file the
form within the time
period.
There was no defect
in the System
Application but the
taxpayer has got the
relief from Hon’ble
High Court.




To
comply
the orders
of Hon’bl
e
H.C order
, the
taxpayer
shall be
allowed
to file the
said form
to claim
the credit.
The state
confirme
d that
they have
accepted
the order
and are
not filing
appeal.

ITC
amountin
g to Rs.
31,18,718
/- has
Agenda for 53rd GSTCM Volume 2
Page 155 of 189
been
credited
to the
ledger
after
filing of
the said
form.

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Agenda Item 7: Review of revenue position under Goods and Services Tax.
1. The Figure below shows the trend and Table 1 shows the details of the collection in Jan’24 –
May’24 vis-à-vis Jan’23 – May’23.
Figure 1: Monthly gross GST collection (in ₹ lakh crore)

Table 1: Monthly gross GST collection (₹ crore)
GST Collection Jan’24 Feb’24 Mar’24 Apr’24 May’24
CGST 32,685 31,785 34,532 43,846 32,409
SGST 40,895 39,615 43,746 53,538 40,265
IGST 88,550 84,098 87,947 99,623 87,781
Domestic 48,952 45,505 47,625 61,797 47,902
Imports 39,598 38,593 40,322 37,826 39,879
Comp Cess 11,976 12,839 12,259 13,260 12,284
Domestic 11,173 11,854 11,263 12,252 11,207
Imports 803 984 996 1,008 1,076
Total 1,74,106 1,68,337 1,78,484 2,10,267 1,72,739



1.57 1.49
1.60
1.87
1.57
1.74 1.68
1.78
2.10
1.72
0.00
0.50
1.00
1.50
2.00
2.50
Jan Feb Mar Apr May
GST Collection in Jan'23 - May'23 GST Collection in Jan'24 - May'24
Agenda for 53rd GSTCM Volume 2
Page 181 of 189

2. Table 2 shows the IGST collected, refunded, and settled/apportioned during FY 2024-25 till
May, 2024.
Table 2: IGST Collection/Settlement/Apportionment/Refund in FY 2023-24 & 2024-25
(Figures in Rs. Crore)
# Particulars 2023-24 2024-25
1 Collections (+) 10,22,280 1,85,754
2 Recovery from IGST Ad-hoc apportionment (+) - -
3 Refunds (-) 1,46,730 32,898
4 Settlement (-) 8,99,067 1,63,160
i. CGST 4,87,039 88,827
ii. SGST 4,12,028 74,333
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 -10,304
Source: Pr. CCA, CBIC
Compensation Fund

3. As per provision of GST (Compensation to States) Act, 2017, the Compensation Cess
collected since implementation of GST w.e.f. 01.07.2017 till May, 2024 and the compensation
released till May, 2024 are shown in the table below:
Table 3: Compensation Cess collected and compensation released
(Figures in Rs. Crore)
2017-18 2018-19 2019-20 2020-21 2021-22

2022-23

2023-24 2024-25#
Opening
Balance
- 21,466 47,271 55,736 9,734 11,501 (25,787
)
(19,711)
Add: Collected
(net)
62,612 95,081 95,551 85,191
1,04,60
9
1,25,86
3
1,43,10
9
25,544

Less: Released 41,146 69,275 1,20,49
8
1,36,98
8
97,500 1,49,16
8
44,946 247

Agenda for 53rd GSTCM Volume 2
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Add: Transfers
from CFI to
Cess Fund*
- - 33,412 5,796 - - - -
Balance 21,466 47,271 55,736 9,734 16,844 (11,804
)
72,377$ 5,586
Less: Interest
and Principal
of B2B Loan
- - - - 5,343 13,983 92,088 -
Balance
Carried
forward
21,466 47,271 55,736 9,734 11,501 25,787 (19,711
)
5,586
*Centre had transferred Rs. 33,412 crore from CFI to cess fund as part of an exercise to apportion
balance IGST pertaining to 2017-18 on 01.06.2020. Centre had transferred Rs. 5,796 crore from CFI
to cess fund as part of an exercise to apportion balance IGST pertaining to 2018-19 on 08.03.2022.
# upto May 2024

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Table 4: Status of AG’s certificate received and processed:
S. No. Name of State/UT
FY
2017-18
FY
2018-19
FY
2019-
20
FY
2020-
21
FY
2021-
22
FY
2022-
23(Q1)
1 Andhra Pradesh
2 Arunachal Pradesh
3 Assam
4 Bihar
5 Chhattisgarh
6 Delhi
7 Goa
8 Gujarat
9 Haryana
10 Himachal Pradesh
11 J & K
12 Jharkhand
13 Karnataka
14 Kerala
15 Madhya Pradesh
16 Maharashtra
17 Manipur
18 Meghalaya
19 Mizoram
20 Nagaland
21 Odisha
22 Puducherry
23 Punjab
24 Rajasthan
25 Sikkim
26 Tamil Nadu
27 Telangana
28 Tripura
29 Uttar Pradesh
30 Uttarakhand
31 West Bengal
AG's certificate not received
AG's certificate received and GST compensation finalised
AG's certificate received and file is under process



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States Revenue Comparison
4. The State-wise details of comparison of SGST revenue and the post settlement SGST revenue
(including ad-hoc settlement) for FY 2024-25 (April-May) as compared to FY 2023-24 (April-May)
may be seen in the Table 5.
Table 5: State-wise Revenue Comparison (Apr-May) (FY 2024-25) vs (Apr-May) (FY 2023-24)
(Amount Rs. in Crore)
State
Code
State/UT Pre-
settlement
(Apr'23-
May'23)
Pre-
settlement
(Apr'24-
May'24)
SGST
Growth
(%)
Post-
Settlement
(Apr'23-
May'23)
Post-
Settlement
(Apr'24-
May'24)
SGST
Growth
Post
settlement
(%)
1 Jammu and
Kashmir
572 587 3% 1,479 1,612 9%
2 Himachal
Pradesh
490 490 0% 1,056 1,102 4%
3 Punjab 1,498 1,723 15% 3,695 3,956 7%
4 Chandigarh 111 130 17% 382 404 6%
5 Uttarakhand 966 1,112 15% 1,521 1,631 7%
6 Haryana 3,415 4,122 21% 6,010 6,890 15%
7 Delhi 2,933 3,504 19% 5,852 6,723 15%
8 Rajasthan 3,127 3,395 9% 6,917 7,282 5%
9 Uttar Pradesh 5,860 6,856 17% 13,303 15,341 15%
10 Bihar 1,419 1,645 16% 4,402 4,986 13%
11 Sikkim 141 95 -32% 254 215 -15%
12 Arunachal
Pradesh
182 145 -20% 440 386 -12%
13 Nagaland 57 60 5% 190 190 0%
14 Manipur 73 84 15% 241 240 0%
15 Mizoram 62 81 31% 187 209 12%
16 Tripura 110 116 6% 299 336 12%
17 Meghalaya 125 127 2% 321 343 7%
18 Assam 1,095 1,247 14% 2,592 2,850 10%
19 West Bengal 4,369 4,670 7% 7,393 8,061 9%
20 Jharkhand 1,605 1,670 4% 2,178 2,521 16%
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State
Code
State/UT Pre-
settlement
(Apr'23-
May'23)
Pre-
settlement
(Apr'24-
May'24)
SGST
Growth
(%)
Post-
Settlement
(Apr'23-
May'23)
Post-
Settlement
(Apr'24-
May'24)
SGST
Growth
Post
settlement
(%)
21 Odisha 2,914 3,497 20% 4,035 5,064 26%
22 Chhattisgarh 1,462 1,591 9% 2,204 2,524 15%
23 Madhya
Pradesh
2,274 2,548 12% 5,444 6,268 15%
24 Gujarat 7,436 8,064 8% 11,655 12,310 6%
25&26 Dadra and
Nagar Haveli &
Daman and Diu
109 133 23% 214 183 -15%
27 Maharashtra 18,012 20,440 13% 26,250 29,356 12%
29 Karnataka 7,321 8,156 11% 13,095 14,139 8%
30 Goa 419 473 13% 725 766 6%
31 Lakshadweep 1 1 -36% 25 9 -62%
32 Kerala 2,406 2,665 11% 5,374 5,547 3%
33 Tamil Nadu 6,783 7,596 12% 10,708 12,674 18%
34 Puducherry 78 95 21% 207 235 13%
35 Andaman and
Nicobar Islands
62 49 -20% 119 132 10%
36 Telangana 3,271 3,699 13% 6,738 7,275 8%
37 Andhra Pradesh 2,396 2,861 19% 5,208 6,149 18%
38 Ladakh 47 44 -7% 88 85 -3%
97 Other Territory 38 33 -12% 168 143 -15%
Grand Total 83,239 93,804 13% 1,50,968 1,68,137 11%







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Trends in Return filing
5. The table 6 shows the trend in return filing in FORM GSTR-3B and GSTR-1 as on
13.06.2024 for return period Jan’24 to Apr’24. Tables 7 and 8 show the State wise filing for these
months.
Table 6: Return filing (GSTR-3B/GSTR-1) as on 13.06.2024
Return Period GSTR-3B (%) GSTR-1(%)
Jan’24 98.1% 98.1%
Feb’24 96.8% 97.0%
Mar’24 95.7% 96.4%
Apr’24 92.8% 93.8%

Figure 3: GSTR-3B/GSTR-1 Filing as on 13.06.2024

Table 7: State-wise Return filing (GSTR-3B) till 13.06.2024 (Jan’24-May’24)
State/UT Jan-24 Feb-24 Mar-24 Apr-24
1 Jammu and Kashmir 98.5% 97.5% 96.8% 93.9%
2 Himachal Pradesh 98.6% 97.3% 96.4% 93.2%
3 Punjab 98.6% 97.2% 97.0% 94.5%
4 Chandigarh 99.6% 98.3% 98.2% 95.6%
5 Uttarakhand 98.3% 96.5% 95.4% 92.4%
98.10%
96.80%
95.70%
92.80%
98.10%
97.00%
96.40%
93.80%
91.00%
92.00%
93.00%
94.00%
95.00%
96.00%
97.00%
98.00%
99.00%
Jan’24 Feb’24 Mar’24 Apr’24
GSTR-3B (%) GSTR-1(%)
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State/UT Jan-24 Feb-24 Mar-24 Apr-24
6 Haryana 98.1% 97.2% 96.5% 93.9%
7 Delhi 97.4% 96.1% 95.6% 93.2%
8 Rajasthan 99.0% 97.0% 97.1% 94.6%
9 Uttar Pradesh 97.9% 96.8% 95.9% 93.3%
10 Bihar 96.3% 93.3% 92.1% 89.0%
11 Sikkim 95.1% 93.1% 91.1% 85.0%
12 Arunachal Pradesh 96.0% 92.7% 87.9% 78.4%
13 Nagaland 94.6% 93.9% 91.9% 85.7%
14 Manipur 95.0% 91.5% 87.0% 80.6%
15 Mizoram 96.0% 95.2% 93.5% 89.0%
16 Tripura 98.2% 96.8% 95.3% 88.0%
17 Meghalaya 96.8% 93.8% 92.3% 88.8%
18 Assam 95.9% 93.5% 90.2% 84.0%
19 West Bengal 98.0% 96.8% 95.9% 92.9%
20 Jharkhand 97.6% 96.4% 95.0% 91.8%
21 Odisha 97.5% 95.4% 93.8% 90.0%
22 Chhattisgarh 98.2% 96.5% 94.0% 89.7%
23 Madhya Pradesh 98.6% 96.7% 95.8% 92.3%
24 Gujarat 100.0% 99.5% 99.0% 97.5%
25 Dadra and Nagar Haveli & Daman and Diu 98.8% 97.9% 96.6% 93.5%
27 Maharashtra 98.6% 97.0% 95.7% 92.3%
29 Karnataka 97.8% 96.6% 94.9% 92.0%
30 Goa 98.4% 96.3% 93.4% 89.1%
31 Lakshadweep 95.0% 92.8% 87.9% 85.2%
32 Kerala 97.5% 96.1% 94.3% 91.1%
33 Tamil Nadu 98.2% 97.6% 96.7% 94.5%
34 Puducherry 96.9% 96.0% 94.3% 91.2%
35 Andaman and Nicobar Islands 96.8% 94.3% 89.4% 83.9%
36 Telangana 97.2% 96.1% 94.1% 90.6%
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State/UT Jan-24 Feb-24 Mar-24 Apr-24
37 Andhra Pradesh 96.9% 96.0% 94.3% 90.8%
38 Ladakh 102.2% 96.7% 96.6% 89.5%
97 Other Territory 81.5% 81.3% 81.3% 81.3%
Total 98.1% 96.8% 95.7% 92.8%

Table 8: State-wise Return filing (GSTR-1) till 13.06.2024 (Jan’24-May’24)

State/UT Jan-24 Feb-24 Mar-24 Apr-24
1 Jammu and Kashmir 98.5% 97.6% 97.4% 94.8%
2 Himachal Pradesh 98.2% 97.3% 97.2% 94.0%
3 Punjab 98.5% 97.3% 97.6% 95.2%
4 Chandigarh 99.6% 98.4% 98.9% 96.3%
5 Uttarakhand 98.1% 96.7% 96.3% 93.4%
6 Haryana 98.0% 97.4% 97.2% 95.0%
7 Delhi 97.3% 96.3% 96.4% 94.1%
8 Rajasthan 98.6% 96.9% 97.8% 95.1%
9 Uttar Pradesh 97.9% 96.9% 96.6% 94.2%
10 Bihar 96.3% 93.6% 92.8% 89.9%
11 Sikkim 95.1% 93.4% 92.2% 86.0%
12 Arunachal Pradesh 96.1% 93.2% 89.1% 79.5%
13 Nagaland 94.9% 94.2% 92.8% 86.9%
14 Manipur 95.3% 91.9% 87.9% 81.7%
15 Mizoram 96.1% 95.5% 94.2% 90.1%
16 Tripura 98.3% 97.1% 96.1% 89.2%
17 Meghalaya 96.8% 93.9% 93.0% 89.6%
18 Assam 96.0% 93.8% 91.3% 85.3%
19 West Bengal 98.0% 97.0% 96.6% 93.9%
20 Jharkhand 97.7% 96.6% 95.8% 92.8%
21 Odisha 97.5% 95.6% 94.7% 91.0%
22 Chhattisgarh 98.1% 96.7% 95.1% 90.9%
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State/UT Jan-24 Feb-24 Mar-24 Apr-24
23 Madhya Pradesh 98.4% 96.8% 96.5% 93.1%
24 Gujarat 99.7% 99.5% 99.4% 98.0%
25 Dadra and Nagar Haveli & Daman and Diu 99.0% 98.3% 97.7% 95.4%
27 Maharashtra 98.6% 97.3% 96.7% 93.6%
29 Karnataka 98.0% 97.0% 95.8% 93.2%
30 Goa 98.7% 96.7% 94.6% 90.6%
31 Lakshadweep 95.5% 93.2% 89.3% 86.6%
32 Kerala 97.8% 96.6% 95.3% 92.6%
33 Tamil Nadu 98.4% 97.9% 97.4% 95.6%
34 Puducherry 97.2% 96.5% 95.1% 92.6%
35 Andaman and Nicobar Islands 97.0% 94.9% 91.1% 85.8%
36 Telangana 97.5% 96.5% 95.0% 91.9%
37 Andhra Pradesh 97.1% 96.4% 95.1% 92.1%
38 Ladakh 102.1% 96.9% 97.9% 90.6%
97 Other Territory 81.5% 81.3% 81.3% 81.3%
Total 98.1% 97.0% 96.4% 93.8%


Agenda for 53rd GSTCM Volume 2
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Confidential


Agenda for
53rd GST Council Meeting
22nd June, 2024
Volume-III






Agenda for 53rd GSTCM Volume 3
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Agenda for 53rd GSTCM Volume 3
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GST Council Secretariat New Delhi
5th Floor, Tower-II, Jeevan Bharti Building, New Delhi
13th June, 2024

OFFICE MEMORANDUM
Subject: Notice for the 53rd GST Council Meeting to be held on 22nd June, 2024-reg

The undersigned is directed to refer to the above subject and to convey that the 53rd Meeting
of the GST Council will be held on 22nd June, 2024 at New Delhi. The schedule of the
meeting is as follows:-
Saturday, 22nd June, 2024 from 2.00 P.M. onwards
2. In addition, an Officers’ Meeting will be held on 21st June, 2024 at New Delhi as per the
following schedule:
Friday, 21st June, 2024 from 11.30 A.M. onwards

3. The venue of the meeting, agenda items and other details for the 53rd 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
53rd 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
Agenda for 53rd GSTCM Volume 3
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Agenda for 53rd GSTCM Volume 3
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TABLE OF CONTENTS (VOLUME-III)



Sl. No. Agenda Item Page No.
(Part-II) of
Sl. No. 3.
(Vol-I)
Issues recommended by the Law Committee for the consideration of the GST
Council


xxxix) Agenda on rationalisation of the quantum of pre-deposit required to
be paid for filing of appeals under GST.
7-16

xl) Change in Payment table of Form GSTR-3B to provide for a separate
table for RCM supplies and Section 9(5) supplies.
17-18

xli) Notifying Annual Return in FORM GSTR-9 for Financial Year 2023-
24 and extending exemption from filing FORM GSTR-9 for
taxpayers with turnover up to Rs. 2 crores.
19-31

xlii) Rolling out of Biometric based Aadhar Authentication of registration
on Pan-India basis.
32-35
(Part-II) of
Sl. No. 7.
(Vol-II)
GST Appellate Tribunal - Status update and issues for approval
36-44
8.
Performance Report of the Anti-profiteering authorities for the 2nd quarter (July
to September 2023) 3rd quarter (October to December 2023) and 4th quarter
(January to March, 2024) for the information of the GST Council
45-48
9.
Ad-hoc Exemptions Orders issued under Section 25(2) of the Customs Act,
1962 to be placed before the GST Council for information.
49-55
10. Any other agenda item with the permission of the Chairperson
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Agenda for 53rd GSTCM Volume 3
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Discussion on Agenda Items

Agenda Item 3 (Part-II): Issues recommended by the Law Committee for the consideration of
the GST Council

Agenda Item 3 (xxxix): Agenda on rationalisation of the quantum of pre-deposit required to be
paid for filing of appeals under GST.
Various representations have been received from the trade and industry, stating that the
percentage of pre-deposit required under GST regime vis-à-vis erstwhile laws [i.e., service tax/
Central Excise or State Value Added Tax (VAT)] is significantly higher, and that the steep increase in
pre-deposit percentages under GST vis-à-vis erstwhile regime is causing unnecessary blockage of
funds and working capital impact for the taxpayers. It has also been mentioned that, as a consequence,
this results in a financial burden on businesses and impacts resource allocation.
1.2 It has been requested that the quantum of pre-deposit under GST regime may be rationalised,
as this affects working capital requirement of companies, who would be required to pay a pre-deposit
equal to 10% of tax demand at the first appellate level (CGST/ SGST of Rs. 25 crores each or IGST
of Rs. 50 crores) and an additional 20% of tax demand (CGST/ SGST of Rs. 50 crores each or IGST
of Rs. 100 crores) before the appellate tribunal, for filing of appeals against demand orders passed by
adjudicating authorities and appellate authorities respectively.

2. Relevant provisions:

2.1 Section 107 of CGST Act, 2017:
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-five crore rupees, in
relation to which the appeal has been filed.
Agenda for 53rd GSTCM Volume 3
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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.
(7) Where the appellant has paid the amount under sub-section (6), the recovery
proceedings for the balance amount shall be deemed to be stayed.

2.2 Section 112 of CGST Act, 2017:
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 1three
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 twenty 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 fifty crore rupees , in relation to which the
appeal has been filed.
(9) Where the appellant has paid the amount as per sub-section (8), the recovery
proceedings for the balance amount shall be deemed to be stayed till the disposal of the
appeal.

2.3 Section 20 of IGST Act, 2017:
Section 20. Application of provisions of Central Goods and Services Tax Act. -
Subject to the provisions of this Act and the rules made thereunder, the provisions of
Central Goods and Services Tax Act relating to,-
…
(xix) appeals and revision;
shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in
relation to central tax as if they are enacted under this Act:
Provided …
…
Agenda for 53rd GSTCM Volume 3
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Provided also that where the appeal is to be filed before the Appellate Authority or the
Appellate Tribunal, the maximum amount payable shall be fifty crore rupees and one
hundred crore rupees respectively.

2.4 Section 11 of Goods And Services Tax (Compensation To States) Act, 2017:
Section 11: Other provisions relating to cess.
(1) The provisions of the Central Goods and Services Tax Act, and the rules made there
under, including those relating to assessment, input tax credit, non-levy, short-levy, interest,
appeals, offences and penalties, shall, as far as may be, mutatis mutandis, apply, in relation
to the levy and collection of the cess leviable under section 8 on the intra-State supply of
goods and services, as they apply in relation to the levy and collection of central tax on such
intra-State supplies under the said Act or the rules made there under.
(2) The provisions of the Integrated Goods and Services Tax Act, and the rules made
there under, including those relating to assessment, input tax credit, non-levy, short-levy,
interest, appeals, offences and penalties, shall, mutatis mutandis, apply in relation to the levy
and collection of the cess leviable under section 8 on the inter-State supply of goods and
services, as they apply in relation to the levy and collection of integrated tax on such inter-
State supplies under the said Act or the rules made there under:
Provided that the input tax credit in respect of cess on supply of goods and services leviable
under section 8, shall be utilised only towards payment of said cess on supply of goods and
services leviable under the said section.

3. Analysis:
3.1 The matter has been examined. In this regard, data regarding pre-deposit required in
different VAT/ Sales Tax law as well as under Service Tax, Customs and Central Excise (in
percentage of disputed amount) and maximum amount of pre-deposit for filing of appeals before first
and second appellate authority was collected, and it was noted that the same varied widely between
different states. 3.2.1 It may be noted that in earlier laws like Central Excise and Service
Tax, the amount of pre-deposit required to be paid in order to file an appeal, was 7.50% of the
disputed amount at the first appellate level and an additional 2.50% at the second appellate level,
bringing the total pre-deposit required to be deposited to only 10% of the amount in dispute.
Similarly, it can be seen the maximum amount of pre-deposit was also capped at Rs. 10 crores. The
amount of pre-deposit in GST is substantial jump over the amount under Central Excise/ Service Tax
regime. At the same time, in various State VAT laws, it can be seen that different amounts of pre-
deposit were required to be paid, and the maximum amount of pre-deposit was also different.
3.2.2 It is no doubt that GST is a new law, and a number of cases due to different interpretation of
the law and the rules, are bound to emerge. Therefore, such a high requirement of pre-deposit can be
burdensome for businesses, especially smaller ones, as it affects their working capital. Revisiting the
percentage of pre-deposit requirement could ease the financial burden on appellants.
3.2.3 It is also important to note that as in the earlier regime under Service Tax, there was
centralized registration for a taxpayer and accordingly, on any issue, one demand was issued against
Agenda for 53rd GSTCM Volume 3
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the said centralized registration, unlike in GST, where separate demands are issued in respect of each
GSTIN in different states. Therefore, the maximum amount of pre-deposit in Service Tax was
applicable on this single demand for centralized registration. Now, with multiple registrations under
GST regime, there are multiple orders that are issued, and the appellant has to file appeal against all
those orders, and hence the maximum amount of pre-deposit applies on each one of them separately,
thus making the total amount to be paid as pre-deposit as huge in certain cases.
3.2.4 The purpose of pre-deposits is to ensure that only genuine appeals are filed, discouraging
frivolous litigation, however, the intention is not to put undue financial burden on the taxpayers by
blocking huge amount of working capital for filing appeals. Therefore, there is a need to review the
pre-deposit provisions under GST.
3.3 The matter was deliberated by the Law Committee in its meeting held on 30.05.2024. Law
Committee felt that the percentage of pre-deposit as well as the maximum amount to be paid at both
the first appellate and the second appellate levels need to be rationalized. Law Committee
recommended to keep the quantum of pre-deposit for filing appeal with appellate authority at 10% of
the tax in dispute (subject to a maximum of Rs.20 crores each in CGST and SGST and Rs 40 crore for
IGST), whereas the amount of pre-deposit to be paid for filing appeals in Appellate Tribunal should
be reduced to 10% of the tax in dispute (subject to a maximum of Rs. 20 crores each in CGST and
SGST and Rs 40 crore for IGST). The Law Committee accordingly recommended the following
amendments in CGST Act, 2017 and IGST Act, 2017.

3.4 Amendments recommended by the Law Committee:
3.4.1 Section 107 of CGST Act, 2017:
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-five 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.
(7) Where the appellant has paid the amount under sub-section (6), the recovery
proceedings for the balance amount shall be deemed to be stayed.
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3.4.2 Section 112 of CGST Act, 2017:
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 1three
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 twenty 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 fifty twenty crore rupees , in relation to which
the appeal has been filed.
(9) Where the appellant has paid the amount as per sub-section (8), the recovery
proceedings for the balance amount shall be deemed to be stayed till the disposal of the
appeal.

3.4.3 Similar amendments may also be made in respective SGST Acts.
3.4.4 Section 20 of IGST Act, 2017:
Section 20. Application of provisions of Central Goods and Services Tax Act. -
Subject to the provisions of this Act and the rules made thereunder, the provisions of
Central Goods and Services Tax Act relating to,-
…
(xix) appeals and revision;
shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in
relation to central tax as if they are enacted under this Act:
Provided …
…
Provided also that where the appeal is to be filed before the Appellate Authority or the
Appellate Tribunal, the maximum amount payable shall be fifty forty crore rupees and one
hundred forty crore rupees respectively.
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4. It was also recommended that the above amendments may be made in a prospective manner,
i.e. the reduced pre-deposit would be made applicable in cases where the appeal is yet to be filed, on
the date of notification of the said amendments.

5. Law Committee further recommended that consequential amendments may also be made in
FORM GST APL-01 and FORM GST APL -05 as detailed in Annexure-A.


6. Accordingly, the recommendations of the Law Committee as detailed above are placed before
the GST Council, for approval.


Agenda for 53rd GSTCM Volume 3
Page 13 of 55
Annexure-A
FORM GST APL – 01
[See rule 108(1)]
Appeal to Appellate Authority

15. Details of payment of admitted amount and pre-deposit:-
(a) Details of payment required
Particulars
Central
tax
State/
UT
tax
Integrated
tax
Cess Total
amount

(a) Admitted
amount
Tax/Cess
<Total>

Interest

<Total>
Penalty <total>

Fees

<total>




<total>
Other
charges

<total>
(b) Pre- deposit
(10% of
disputed tax
/cess but not
exceeding Rs.
25 20 crore each
in respect of
CGST, SGST,
or cess, or and
not exceeding
Rs. 50 40 crore
in respect of
IGST and Rs.
25 20 crore in
respect of cess)

Tax/Cess


<total>
(c) Pre- deposit
in case of sub-
section (3) of
section 129
Penalty

<total>

Agenda for 53rd GSTCM Volume 3
Page 14 of 55
(b) Details of payment of admitted amount and pre-deposit (pre-deposit 10% of the disputed tax and cess
but not exceeding Rs. 25 20 crore each in respect of CGST, SGST, or cess, or and not exceeding Rs. 50 40
crore in respect of IGST and Rs. 25 crore in respect of cess)

Sr.
No.
Description Tax
payable
Paid through
Cash/ Credit
Ledger
Debi
t
entr
y no.
Amount of tax paid
Centra
l tax
State/UT
tax
Integrate
d tax
Cess
1 2 3 4 5 6 7 8 9

1. Integrated tax
Cash Ledger
Credit Ledger

2. Central tax
Cash Ledger
Credit Ledger

3.
State/UT tax
Cash Ledger
Credit Ledger

4.

CESS
Cash Ledger
Credit Ledger











Agenda for 53rd GSTCM Volume 3
Page 15 of 55
FORM GST APL – 05
[See rule 110(1)]
Appeal to the Appellate Tribunal

14. Details of payment of admitted amount and pre-deposit:
(a) Details of amount payable:
Particulars
Central
tax
State/UT
tax
Integrated
tax
Cess
Total amount
a) Admitted
amount Tax/ Cess

<Total>
Interest <Total>
<Total>
Penalty

<Total>
Fees
<Total>
Other
charges

<Total>
b) Pre-deposit
20 10% of
disputed
tax/cess but
not exceeding
Rs.50 20 crore
each in
respect of CGST,
SGST,
or cess or and not
exceeding
Rs.100 40 crore
in respect of
IGST and
Rs.50 crore in
respect of
cess]

<Total>







Tax/ Cess

<Total>










Agenda for 53rd GSTCM Volume 3
Page 16 of 55
(b) Details of payment of admitted amount and pre-deposit of 20 10% of the disputed tax and cess but
not exceeding Rs. 50 20 crore each in respect of CGST, SGST, or cess or and not exceeding Rs.100 4 0 crore in
respect of IGST and Rs. 50 crore in respect of cess.
Sr.
No.
Description
Tax
payable
Paid through
Cash/ Credit
Ledger
Debit
entry
no.
Amount of tax paid
Integrated
tax
Centra
l tax
State/UT
tax
Cess
1 2 3 4 5 6 7 8 9

1.
Integrated
tax
Cash Ledger
Credit Ledger
2. Central tax Cash Ledger
Credit Ledger
3. State/UT tax Cash Ledger
Credit Ledger
4.

CESS
Cash Ledger
Credit Ledger
















Agenda for 53rd GSTCM Volume 3
Page 17 of 55
Agenda Item 3 (xl): Change in Payment table of Form GSTR-3B to provide for a separate
table for RCM supplies and Section 9(5) supplies-reg.
Requests have been received to allow population of net negative liability from FORM GSTR-
1 in Table 3 of FORM GSTR-3B, which may arise on account of issuance of credit notes, downward
revision of invoices etc. Presently, even if the taxpayer has a net negative liability in the
corresponding FORM GSTR-1, the portal does not allow the taxpayer to report negative tax liability
in FORM GSTR-3B. It has been envisaged that in future, tax liability in FORM GSTR-3B may be
locked as per the auto-populated details in FORM GSTR-1 i.e. be made non- editable.
2. The Law Committee deliberated on the requisite amendment in FORM GSTR-3B for the
above and recommended that net negative liability (in case net liability as per Table 3 comes out to be
negative) of a tax period may be shown in Payment Table of FORM GSTR-3B i.e. Table 6. This will
require creation of a Negative Liability Ledger and the adjustment of liability from the Negative
Liability Ledger is required to be incorporated in the payment Table 6 of FORM GSTR-3B. This
requires changes in the existing payment table of FORM GSTR-3B.
3. Further, according to Circular No. 167/23/2021-GST dated 17.12.2021, section 9(5) liability
to be paid by the E-commerce operators needs to be discharged in cash but in the existing payment
table in FORM GSTR-3B, the same liability is auto populated in “other than reverse charge’ section
which can be paid through cash as well as through ITC. Thus, the “reverse charge” section in the
existing payment table in FORM GSTR-3B needs to be changed to “Reverse charge & supplies made
under sec 9(5)” to include the E-commerce liability under section 9(5) of the CGST Act, 2017, so that
the said section 9(5) liability is mandatorily discharged in cash only.
4. It may also be noted that Table 6.2 of FORM GSTR-3B was never implemented on GST
Portal and is also irrelevant as per current return design.
5. The Law Committee deliberated on the issue in its meeting held on 01.12.2023 and
recommended that:
(i) Table 6.1 in FORM GSTR-3B may be substituted as follows:
6.1 Payment of tax
Description Tax
payable
Paid through ITC Tax paid
TDS./TCS
Tax/Cess
paid in
cash
Interest Late
Fee Integrate
d Tax
Central
Tax
State/UT
Tax
Cess
1 2 3 4 5 6 7 8 9 10
Integrated
Tax

Central Tax
State/UT Tax
Cess



Agenda for 53rd GSTCM Volume 3
Page 18 of 55
6.1 Payment of tax
Descriptio
n
Tax
payabl
e
Adjustme
nt of
negative
liability
of
previous
tax period
Net
Tax
Payabl
e
(2-3)
Tax paid through ITC Tax
paid
in
cas
h
Intere
st
paid
in
cash
Late
fee paid
in cash
Inte
grat
ed
tax
Centr
al
tax
State/U
T
tax
Ces
s
1 2 3 4 5 6 7 8 9 10 11
(A) Other than (i) reverse charge and (ii) supplies made u/s 9(5)
Integrated
tax
<Auto
>
<Auto> <Auto
>
Central
tax
<Auto
>
<Auto> <Auto
>
State/ UT
tax
<Auto
>
<Auto> <Auto
>
Cess
<Auto
>
<Auto> <Auto
>
(B) Reverse charge and supplies made u/s 9(5)
Integrated
tax
<Auto
>
<Auto> <Auto
>
Central
tax
<Auto
>
<Auto> <Auto
>
State/UT
tax
<Auto
>
<Auto> <Auto
>
Cess
<Auto
>
<Auto> <Auto
>
(ii) Table 6.2 of FORM GSTR-3B may be omitted:
6.2 TDS/TCS Credit
Details Integrated Tax Central Tax State/UT Tax
1 2 3 4
TDS
TCS

6. The proposal in para 4 above is placed for approval of the GST Council.
***

Agenda for 53rd GSTCM Volume 3
Page 19 of 55
Agenda Item 3 (xli): Notifying Annual Return in FORM GSTR-9 for Financial Year 2023-24
and extending exemption from filing FORM GSTR-9 for taxpayers with turnover up to Rs. 2
crores.

Section 44 of the CGST Act provides for filing of Annual Return (FORM GSTR-9/9A) and
Annual Reconciliation Statement (FORM GSTR-9C) by specified taxpayers for every financial year.
2. Vide Notification no. 56/2019 –CT dated 14th November, 2019, the Annual Return FORM
GSTR-9 & Annual Reconciliation Statement FORM GSTR-9C were simplified for the Financial
Years 2017-18 & 2018-19 by making few entries optional. Further, vide Notification No. 79/2020-CT
dated 15th October, 2020, said forms were simplified for the Financial Year 2019-20 as well by
making few entries/tables optional. Moreover, the said forms were simplified for FY 2020-21 vide
Notification No. 30/2021-CT dated 30.07.2021, for FY 2021-22 vide Notification No.14/2022-Central
tax dated 05.07.2022 and for FY 2022-23 vide Notification No. 38/2023-Central tax dated
04.08.2023. The details of relaxations provided in FY 2022-23 are enclosed as Annexure A to this
note.
3. Further, vide notification No. 32/2023- CT, dated 31.07.2023, the filing of annual return (in
FORM GSTR-9/9A) for the FY 2022-23 was exempted for taxpayers having aggregate annual
turnover upto two crore rupees.
4. Further, it is mentioned that w.e.f. 01.01.2022, sub-rule (4) of rule 36 of CGST Rules has
been amended to restrict availment of input tax credit by a registered person in respect of such
invoices and debit notes the details of which have been communicated to the registered person in
FORM GSTR-2B under sub-rule (7) of rule 60 of CGST Rules. However, table 8A of FORM GSTR-
9 still provides for auto-population of ITC as per FORM GSTR-2A of the registered person. In this
regard, representations have been received that though rule 36(4) of CGST Rules provides for
availment of input tax credit in FORM GSTR-3B as per details in FORM GSTR-2B; however, the
table 8A of FORM GSTR-9 still requires auto-population of the ITC details from FORM GSTR-2A
which will create anomalies in reconciliation of ITC availment in FORM GSTR-3B and FORM
GSTR-9. Accordingly, it has been requested to amend table 8A of FORM GSTR-9 (along with
corresponding entry in para 5 of the Instructions in FORM GSTR-9) to provide for auto-population of
the same on the basis of FORM GSTR-2B rather than FORM GSTR-2A.
5. Also, it is mentioned that requisite changes (as detailed in Annexure B) are required in
FORM GSTR-9 in view of insertion of table 14 & 15 and amendment thereof in FORM GSTR-1 vide
Notification No. 26/2022 – Central Tax dated 26.12.2022 for reporting supplies made through e-
commerce platforms including supplies taxable under section 9(5).
6. In light of the same, the Law Committee recommended the following in respect of Annual
Return forms for FY 2023-24:
(i) The filing of annual return (in FORM GSTR-9/9A) for the FY 2023-24 may be exempted
for taxpayers having aggregate annual turnover upto two crore rupees, as per the relaxation
extended in previous FYs. The draft notification for the same is enclosed as Annexure X;
(ii) The relaxations provided in FY 2022-23 in respect of various tables of FORM GSTR-9
and FORM GSTR-9C, as detailed in Annexure A, may be continued for FY 2023-24; and
(iii) Table 8A of FORM GSTR-9 may be amended as “ITC as per GSTR-2B (table 3 thereof)”
along with corresponding entry in para 5 of the Instructions in the said FORM to provide for
Agenda for 53rd GSTCM Volume 3
Page 20 of 55
auto-population of the table 8A on the basis of FORM GSTR-2B rather than FORM GSTR-
2A. The draft changes in the said instructions are as follows:
Table No. Instructions
8A The total credit available for inwards supplies (other than imports and
inwards supplies liable to reverse charge but includes services received from
SEZs) pertaining to the financial year for which the return is being furnished
and reflected in FORM GSTR-2A (table 3 & 5 only) shall be auto-populated
in this table. This would be the aggregate of all the input tax credit that has
been declared by the corresponding suppliers in their FORM GSTR-1.
For FY 2017-18, It may be noted that the FORM GSTR-2A generated as on
the 1st May, 2019 shall be auto-populated in this table.
For FY 2018-19, It may be noted that the FORM GSTR-2A generated as on
the 1st November, 2019 shall be auto-populated in this table.
For FY 2017-18 and 2018-19, the registered person shall have an option to
upload the details for the entries in Table 8A to 8D duly signed, in PDF
format in FORM GSTR-9C (without the CA certification).
For FY 2019-20, it may be noted that the details from FORM GSTR-2A
generated as on the 1st November, 2020 shall be auto-populated in this table.
However, for FY 2023-24 onwards, the total credit available for inwards
supplies (other than imports and inwards supplies liable to reverse charge
but includes services received from SEZs) pertaining to the financial year for
which the return is being furnished and reflected in table 3 of FORM GSTR-
2B shall be auto-populated in this table.

(iv) Requisite changes in FORM GSTR-9 may be carried out in view of insertion of table 14
& 15 and amendment thereof in FORM GSTR-1 vide Notification No. 26/2022 – Central Tax dated
26.12.2022 for reporting supplies made through e-commerce platforms including supplies taxable
under section 9(5).
6.1. Draft Notification in respect of Sr. No. (ii), (iii) and (iv) above, is enclosed as Annexure Y.
7. In view of the above, the proposal in para 4 is placed for approval of the GST Council.
*****
Agenda for 53rd GSTCM Volume 3
Page 21 of 55
Annexure A
The details of relaxations provided in FY 2022-23, which are proposed to be continued in FY
2023-24
Table 1: Simplification of FORM GSTR-9
Table No. Details of relaxations in previous FYs Status of relaxations in FY
2022-23, which may be
continued for FY 2023-24
4I to 4L 2017-18, 2018-19, 2019-20 & 2020-21: The
registered person was given an option to either file
4B to 4E net of credit notes/ debit notes/
amendments or report such details separately in 4I
to 4L.
2021-22: It was informed by GSTN that tables 4B
to 4E and tables 4I to 4L are being separately auto-
populated from relevant tables of GSTR-1 and
therefore, the said relaxation was not continued for
FY 2021-22.
The relaxation was not
continued for FY 2022-23.
5D, 5E and
5F
2017-18, 2018-19, 2019-20 & 2020-21: The
registered person was given an option to either
separately report his supplies as exempted, nil rated
and non-GST supply or report consolidated
information for all these three heads in the
“exempted” row only.
2021-22: The registered person was required to
report Non-GST supply (5F) separately and was
given an option to either separately report his
supplies as exempted and nil rated supply or report
consolidated information for these two heads in the
“exempted” row only.
The relaxation on the pattern of
2021-22 was continued for
2022-23.
5H to 5K 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22:
The registered person was given an option to fill
Table 5A to 5F net of credit notes/ debit notes/
amendments or report such details separately in 5H
to 5K.
The relaxation was continued for
FY 2022-23 as there is marginal
or no revenue implication.
6B, 6C, 6D
and 6E
2017-18 & 2018-19: The registered person was
given an option to either report the breakup of
input tax credit as inputs, capital goods and input
services or report the entire input tax credit under
the “inputs” row only.
2019-20, 2020-21 & 2021-22: The registered
person was required to report the breakup of input
The relaxation on the pattern of
2021-22 was continued for
2022-23.
Agenda for 53rd GSTCM Volume 3
Page 22 of 55
tax credit as capital goods and was given an option
to either report the breakup of the remaining
amount as inputs and input services or report the
entire remaining amount under the “inputs” row
only.
7A to 7E 2017-18, 2018-19, 2019-20, 2020-21 & 2021-
22:The registered person was given an option to
either fill his information on reversals separately in
Table 7A to 7E or report the entire amount of
reversal under Table 7H only. However, reversals
on account of TRAN-1 credit (Table 7F) and
TRAN-2 (Table 7G) were to be mandatorily
reported.
The relaxation was continued for
FY 2022-23.
12 and 13 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22:
The registered person was given an option to not
fill these tables.
 It was felt that this information is not essential
for the tax administration.
The relaxation was continued for
FY 2022-23.
15 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22:
The registered person was given an option to not
fill this table.
 It was felt that tax administration already has
all the data on refund and demands for the
taxpayers.
The data is already available
with tax officer in the form of
MIS reports. Therefore, the
relaxation on the pattern of
2021-22 was continued for
2022-23.
16A, 16B
and 16C
2017-18, 2018-19, 2019-20, 2020-21 & 2021-22:
The registered person was given an option to not
fill these tables.

The relaxation was continued for
FY 2022-23.
18 FY 2017-18, 2018-19, 2019-20, 2020-21 & 2021-
22: The registered person was given an option to
not fill this table.

Since HSN details are not
communicated in GSTR-2A, and
HSN requirements for suppliers
may be different from that for
the annual return filer, it may be
difficult for the annual return
filer to reconcile HSN wise
details of inward supplies.
Therefore, the relaxation was
continued for FY 2022-23.


Agenda for 53rd GSTCM Volume 3
Page 23 of 55
Table 2: Simplification of FORM GSTR-9C
Table No. Details of relaxations in previous FYs Status of relaxations
in FY 2022-23, which
may be continued for
FY 2023-24
5B to 5N 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22: The
registered person was given an option to not fill these tables.
If any adjustments were required to be reported, then the
same could be reported in Table 5O.
 It was felt that a number of big companies which have a
presence in multiple States face a lot of challenges in
reporting State wise unbilled revenue, unadjusted
advances, deemed supply details, etc. It was also felt that,
from an indirect tax administration point of view, this
data may not be required. In fact, this table was to act as a
pointer of the adjustments that taxpayers need to make to
derive GST turnover from income tax / audited financial
turnover. Since filing this data was a challenge, it was
recommended that taxpayers may be given an option to
either file the data row wise or directly report all
adjustments through table 5O (adjustment tab).
The relaxation was
continued for FY
2022-23.
Table 14 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22: The
registered person was given an option to not fill this table.
 Trade and industry have widely represented that neither
the internal accounts nor the audited financial statements
mandate maintaining of expense-head wise input tax
credit.
The relaxation on the
pattern of 2021-22
was continued for
2022-23.











Agenda for 53rd GSTCM Volume 3
Page 24 of 55
Annexure B
Requisite Changes in GSTR-9 due to insertion of new tables in GSTR-1 and GSTR 3B.

(A) Impact of insertion of table 14 & 15 in GSTR-1 on GSTR-9 - Table 14 & 15 and amendment
thereof have been inserted in GSTR-1 vide Notification No. 26/2022 – Central Tax dated 26-12-2022
for reporting supplies made through e-commerce platforms. It includes supplies taxable under Section
9(5) also. Corresponding changes in GSTR-9 of current financial year 2023-24 would also be
required. Following changes in tables and instructions of the said return would be required:
1. Table 4 –
a. Insertion of new row G1 after row G for reporting 9(5) supplies by ECO.
G1 Supplies on which e-commerce
operator is required to pay tax u/s
9(5) (including amendments, if
any)
[E-commerce operator to report]

b. Minor change in row H.
H Sub-total (A to G1 above)

2. Table 5 –
a. Insertion of new row C1 after row C for reporting 9(5) supplies by supplier.
C1 Supplies on which tax is to be
paid by e-commerce operators as
per section 9(5)
[Supplier to report]

b. Minor changes in row N.
N Total Turnover (including
advances) (4N + 5M - 4G - 4G1
above)





Agenda for 53rd GSTCM Volume 3
Page 25 of 55
3. Instructions –
a. Instruction to be added for insertion of new row G1 of table 4.
4G1 Aggregate values of all the supplies (net of amendments) on which tax is to be paid
by the e-commerce operators under section 9(5) is to be reported by e-commerce
operator. Table 15 and 15A of FORM GSTR-1 may be referred for filling up these
details.

b. Instruction to be added for insertion of new row C1 of table 5.
5C1 Aggregate values of supplies (net of amendments) made by suppliers through e-
commerce operators on which e-commerce operators are liable to pay taxes under
section 9(5) is required to be reported here by supplier. Table 14(b) and 14A(b) of
FORM GSTR-1 may be referred for filling up these details.

c. Minor change in instruction to row N of table 5.
5N Total turnover including the sum of all the supplies (with additional supplies and
amendments) on which tax is payable and tax is not payable shall be declared here.
This shall also include amount of advances on which tax is paid but invoices have not
been issued in the current year. However, this shall not include the aggregate value of
inward supplies on which tax is paid by the recipient (i.e. by the person filing the
annual return) on reverse charge basis and supplies on which e-commerce operators
are required to pay taxes under section 9(5).

d. Minor change in instruction to row A of table 8 for computation of ITC.
8A

The total credit available for inwards supplies (other than imports and inwards
supplies liable to reverse charge but includes services received from SEZs and
supplies received from E-commerce operators) pertaining to the financial year for
which the return is being for and reflected in FORM GSTR-2A (table 3 & 5 only)
shall be auto-populated in this table. This would be the aggregate of all the input tax
credit that has been declared by the corresponding suppliers including e-commerce
operators in their FORM GSTR-1. For FY 2017-18, It may be noted that the FORM
GSTR-2A generated as on the
1stMay, 2019 shall be auto populated in this table.
For FY 2018-19, It may be noted that the FORM GSTR-2Agenerated as on the 1st
November, 2019 shall be auto-populated in this table. For FY 2017-18 and 2018-19,
the registered person shall have an option to upload the details for the entries in Table
8A to 8D duly signed, in PDF format in FORM GSTR-9C (without the CA
certification).
For FY 2019-20, it may be noted that the details from FORM GSTR-2A generated
as on the 1st November, 2020 shall be auto-populated in this table.


Agenda for 53rd GSTCM Volume 3
Page 26 of 55
Annexure X
Draft notification to exempt taxpayers having AATO upto Rs. 2 crores from the requirement of
furnishing annual return for FY 2023-24
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS

NOTIFICATION
No. --/2024 – Central Tax
New Delhi, the -- June, 2024
G.S.R. ......(E).— In exercise of the powers conferred by the first proviso to section 44 of the Central
Goods and Services Tax Act, 2017 (12 of 2017), the Commissioner, on the recommendations of the
Council, hereby exempts the registered person whose aggregate turnover in the financial year 2023-24
is up to two crore rupees, from filing annual return for the said financial year.
[F. No. CBIC-20001/2/2022-GST]

(Raghvendra Pal Singh)
Under Secretary


Agenda for 53rd GSTCM Volume 3
Page 27 of 55
Annexure Y
Draft notification to notify Annual return for FY 2023-24
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS
NOTIFICATION
No. --/2024 – Central Tax
New Delhi, the -- June, 2024

G.S.R... (E). –In exercise of the powers conferred by section 164 of the Central Goods and Services
Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby
makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:
—
1. Short title and commencement.- (1) These rules may be called the Central Goods and
Services Tax (Second Amendment) Rules, 2024.
(2) Save as otherwise provided in these rules, they shall come into force on the date of their
publication in the Official Gazette.
2. In the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules),
in FORM GSTR-9,
(A) in the table, -
(i) in Pt. II, -
(a) in Sl no 4,

(i) after the entry relating to serial number G, the following serial number and entry
relating thereto shall be inserted, namely: -
G1 Supplies on which e-commerce
operator is required to pay tax as
per section 9(5) (including
amendments, if any)
[E-commerce operator to report]


Agenda for 53rd GSTCM Volume 3
Page 28 of 55
(ii) against serial number H, -for the letters and word “Sub-total (A to G
above)”, the letters, figures and word “Sub-total (A to G1 above)” shall be
substituted.”;
(b) in Sl no 5,

(i) after the entry relating to serial number C, the following serial number and entry
relating thereto shall be inserted, namely: -
C1 Supplies on which tax is to be
paid by e-commerce operators as
per section 9(5)
[Supplier to report]

(ii) against serial number N, -for the letter,figures and word “Total Turnover
(including advances) (4N + 5M - 4G above)”, the letters, figures and word
“Total Turnover (including advances) (4N + 5M - 4G - 4G1 above)” shall be
substituted.”;

(B) under the heading Instructions, -
i. in paragraph 4, -
a. after the word, letters and figures “or FY 2022-23”, the word, letters
and figures “or FY 2023-24” shall be inserted;
b. in the Table -
(I) after the entry relating to serial number 4G, the following serial number
and entry relating thereto shall be inserted, namely: -
4G1 Aggregate values of all the supplies (net of amendments) on which tax is to be paid
by the e-commerce operators under section 9(5) is to be reported by e-commerce
operator. Table 15 and 15A of FORM GSTR-1 may be referred for filling up these
details.

(II) after the entry relating to serial number 5C, the following serial number
and entry relating thereto shall be inserted, namely: -
5C1 Aggregate values of supplies (net of amendments) made by suppliers through e-
commerce operators on which e-commerce operators are liable to pay taxes under
section 9(5) is required to be reported here by supplier. Table 14(b) and 14A(b) of
FORM GSTR-1 may be referred for filling up these details.


Agenda for 53rd GSTCM Volume 3
Page 29 of 55
(III) in second column, against serial numbers 5D, 5E and 5F, the following
entries shall be inserted at the end, namely: –
‘For FY 2023-24, the registered person shall report Non-GST supply (5F)
separately and shall have an option to either separately report his supplies
as exempted and nil rated supply or report consolidated information for
these two heads in the “exempted” row only.’;
(IV) in second column, against serial numbers 5H, 5I, 5J and 5K, for the
figures and word “2021-22 and 2022-23”, the figures and word “2021-22,
2022-23 and 2023-24” shall be substituted;
(V) in second column, against serial number 5N, after the letters and word
“on reverse charge basis.”, the letters, figures and word “and supplies on
which e-commerce operators are required to pay taxes under section 9(5).”
shall be inserted.”;

ii. in paragraph 5, in the Table, in second column, -
a. against serial numbers 6B, 6C, 6D and 6E, for the letters and figures “FY 2019-20,
2020-21, 2021-22 and 2022-23”, the letters, figures and word “FY 2019-20, 2020-
21, 2021-22, 2022-23 and 2023-24” shall respectively be substituted;
b. against serial numbers 7A, 7B, 7C, 7D, 7E, 7F, 7G and 7H, for the figures and
word “2021-22 and 2022-23”, the figures and word “2021-22, 2022-23 and 2023-
24” shall be substituted;
c. against serial number 8A, -
1. after the words “received from SEZs”, the words “and supplies
received from E-commerce operators” shall be inserted,
2. after the words “corresponding suppliers”, the words “including e-
commerce operators” shall be inserted and
3. the following entry shall be inserted at the end, namely: -
“However, for FY 2023-24 onwards, the total credit available for
inwards supplies (other than imports and inwards supplies liable to
reverse charge but includes services received from SEZs) pertaining
to the financial year for which the return is being furnished and
reflected in table 3(I) of FORM GSTR-2B shall be auto-populated in
this table.”

iii. in paragraph 7, -
a. after the words and figures “filed upto 30th November, 2023.”, the
following entry shall be inserted, namely: -
“For FY 2023-24, Part V consists of particulars of transactions for the
previous financial year but paid in the FORM GSTR-3B of April, 2024 to
October, 2024 filed upto 30th November, 2024.”;
b. in the Table, in second column, -
(I) against serial numbers 10 & 11, the following entry shall be inserted at the
end, namely: -
“For FY 2023-24, details of additions or amendments to any of the
supplies already declared in the returns of the previous financial year but
such amendments were furnished in Table 9A, Table 9B and Table 9C of
Agenda for 53rd GSTCM Volume 3
Page 30 of 55
FORM GSTR-1 of April, 2024 to October, 2024 filed upto 30th
November, 2024 shall be declared here.”;
(II) against serial number 12, -
(1) after the words, letters, figures and brackets “upto 30th
November, 2023 shall be declared here. Table 4(B) of FORM GSTR-
3B may be used for filling up these details.”, the following entry shall
be inserted, namely: -
“For FY 2023-24, aggregate value of reversal of ITC which was
availed in the previous financial year but reversed in returns filed
for the months of April, 2024 to October, 2024 filed upto 30th
November, 2024 shall be declared here. Table 4(B) of FORM GSTR-
3B may be used for filling up these details.”;
(2) for the figures and word “2021-22 and 2022-23”, the figures and word
“2021-22, 2022-23 and 2023-24” shall be substituted;
(III) against serial number 13, -
(1) after the words, letters and figures “reclaimed in FY 2023-24, the
details of such ITC reclaimed shall be furnished in the annual return for
FY 2023-24,”, the following entry shall be inserted, namely: -
“For FY 2023-24, details of ITC for goods or services received in the
previous financial year but ITC for the same was availed in returns
filed for the months of April, 2024 to October, 2024 filed upto 30th
November, 2024 shall be declared here. Table 4(A) of FORM GSTR-
3B may be used for filling up these details. However, any ITC
which was reversed in the FY 2023-24 as per second proviso to sub-
section (2) of section 16 but was reclaimed in FY 2024-25, the
details of such ITC reclaimed shall be furnished in the annual return
for FY 2024-25.”;
(2) for the figures and word “2021-22 and 2022-23”, the figures and word
“2021-22, 2022-23 and 2023-24” shall be substituted;
iv. in paragraph 8, in the Table, in second column, -
a. against serial numbers, -
(I) 15A, 15B, 15C and 15D,
(II) 15E, 15F and 15G,
(III)16A,
(IV)16B and
(V) 16C
for the figures and word “2021-22 and 2022-23” wherever they occur, the letters,
figures and word “2021-22, 2022-23 and 2023-24” shall be substituted.”;
b. against serial number 17 & 18, for the figures and word “2021-22 and
2022-23”, the letters, figures and word “2021-22, 2022-23 and 2023-24”
shall be substituted.”;

3. In the said rules, in FORM GSTR-9C,-

(i) under the heading Instructions, -
Agenda for 53rd GSTCM Volume 3
Page 31 of 55
(a) in paragraph 4, in the Table, in second column, for the figures and word,-
i. “2021-22 and 2022-23”, wherever they occur, the figures and word “2021-
22, 2022-23 and 2023-24” shall be substituted, and
ii. “2020-21 and 2021-22", wherever they occur, the figures and word “2020-21,
2021-22, 2022-23 and 2023-24” shall be substituted;
(b) in paragraph 6, in the Table, in second column, against serial number 14, for the
figures and word “2021-22 and 2022-23”, the figures and word “2021-22, 2022-23
and 2023-24” shall be substituted;
[F. No. CBIC-20001/2/2022-GST]


(Raghvendra Pal Singh)
Director
Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i), vide notification No. 3/2017-Central Tax, dated the 19thJune, 2017, published, vide
number G.S.R. 610(E), dated the 19th June, 2017 and last amended, vide notification No. 40/2021-
Central Tax, dated the 29th December, 2021, vide number G.S.R. 902(E), dated the 29th December,
2021.


Agenda for 53rd GSTCM Volume 3
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Agenda Item 3 (xlii): Rolling out of Biometric based Aadhar Authentication of registration on
Pan-India basis-reg.

Government has taken several policy and system-based measures on the to curb the menace
of availment of fraudulent Input Tax Credit (ITC) on the basis of the fake invoices. Among various
measures taken to tackle the menace of fake invoice and fake dealers, one such measure was to further
strengthen GST registration process so that the registration is granted only to genuine suppliers of
goods or services. In order to fulfil the intended objective, sub-rule (4A) of rule 8 of Goods and
Service Tax Rules, 2017 (“CGST Rules”) was substituted by Notification No. 4/2023 dated
31.03.2023 with effect from 26.12.2022, for biometric authentication of Adhaar number and in-person
verification of the applicant before grant of registration in cases identified on the basis of data
analytics and risk parameters. The same (as amended) is reproduced as under:
“(4A) Where an applicant, other than a person notified under sub-section (6D) of section 25,
opts for authentication of Aadhaar number, he shall, while submitting the application under
sub-rule (4), undergo authentication of Aadhaar number and the date of submission of the
application in such cases shall be the date of authentication of the Aadhaar number, or fifteen
days from the submission of the application in Part B of FORM GST REG-01 under sub-rule
(4), whichever is earlier:
Provided that every application made under sub-rule (4) by a person, other than a person
notified under sub-section (6D) of section 25, who has opted for authentication of Aadhaar
number and is identified on the common portal, based on data analysis and risk
parameters, shall be followed by biometric-based Aadhaar authentication and taking
photograph of the applicant where the applicant is an individual or of such individuals in
relation to the applicant as notified under sub-section (6C) of section 25 where the applicant
is not an individual, along with the verification of the original copy of the documents
uploaded with the application in FORM GST REG-01 at one of the Facilitation
Centres notified by the Commissioner for the purpose of this sub-rule and the application
shall be deemed to be complete only after completion of the process laid down under this
proviso”.
2. Sub-rule (4A) of rule 8 of CGST Rules provides that the applicants who have opted for
authentication of Aadhar number will have to undergo authentication of Aadhar number while
submitting the registration application. Further, proviso to the said sub-rule (4A) of rule 8 of CGST
Rules provides for the risk based biometric-based Aadhaar authentication of registration applicants
who have opted for authentication of Aadhar number. The provisions of the proviso has been made
effective in the State of Gujarat vide Notification no. 27/2022-Central Tax dated 26.12.2022, in the
State of Puducherry vide Notification number 31/2023-Central Tax dated 31.07.2023 and in the State
Agenda for 53rd GSTCM Volume 3
Page 33 of 55
of Andhra Pradesh vide Notification number 54/2023-Central Tax dated 17.11.2023 for the purpose
of conducting pilot of such biometric based Aadhaar authentication of applicants identified by Goods
and Service Tax Network (GSTN) on the common portal on the basis of data analytics and risk
parameters. Accordingly, the said pilot is being conducted in the States of Gujarat, Puducherry and
Andhra Pradesh at GST Suvidha Kendras (GSKs) wherein the identified applicant has to visit GST
Suvidha Kendra (GSK) for Biometric based Aadhaar Authentication and original document
verification.
3. A study of the said pilot project has been conducted by Directorate General of Goods and
Service Tax (DGGST) of CBIC to ascertain the feasibility of rolling out of the said project on Pan-
India basis and to provide suggestions for improving the Bio-metric Aadhaar based authentication
process. Besides, suggestions were also received from States of Gujarat and Andhra Pradesh. Broadly,
two types of suggestions viz. Policy related suggestions and Systems related suggestions have been
received. All these suggestions have been deliberated by the Law Committee in its meeting held on
18.03.2024. As regards Systems related suggestions, it was informed by GSTN that they have taken
up the same for examination and necessary action for modifying/ improving the functionality on the
system. The policy related suggestions were deliberated in the meeting of Law Committee which are
mentioned as under:
3.1 Rolling-out of the Biometric based Aadhar Authentication project on pan-India basis:
3.1.1 As per the feedback from the State of Gujarat, the number of new applications for obtaining
GST Registrations went down by almost 50% after the roll-out of Pilot project in Gujarat in
November, 2023. It has further been informed that applications for new registration in the State of
Gujarat have gone down by about 25% in first seven months of the pilot. Law Committee felt that as
the pilot has been found to be successful and has helped in curbing fraudulent registration in the
States where pilot has been launched, the same needs to be extended to other States/UTs also. Law
Committee, accordingly, recommended that the Biometric based Aadhar Authentication for GST
registration applicants may be rolled out on pan-India basis as a pre-emptive measure to deter such
fraudulent registration applicants. Such rollout of the biometric based Aadhar Authentication on pan
India basis may be done in phased manner, depending upon the preparedness of the tax authorities in
various States/UTs.

3.2 Insertion of second proviso in sub-rule (4A) of rule 8 of the CGST Rules:
3.2.1 Presently, only those high-risk applicants who opt for authentication of Aadhaar number are
required to visit GSKs for biometric-based Aadhaar authentication. However, the applicants who do
not opt for Authentication of Aadhar Number are neither required Biometric based Aadhar
Authentication nor are required to visit GSKs.
Agenda for 53rd GSTCM Volume 3
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3.2.2 In this regard, Law Committee recommended that such applicants, who do not opt for
Authentication of Aadhar Number, may also be required to visit the GSKs for photo capturing and
document verification in order to ascertain the genuineness of such applicants and their documents.
This will require an amendment in sub-rule (4A) of rule 8 of CGST Rules, 2017 by inserting a
second proviso to the said sub-rule to make it mandatory for those applicants, as detailed below:
“Provided further that every application made under sub-rule (4) by a person,
other than a person notified under sub-section (6D) of section 25, who has not opted for
authentication of Aadhaar number, shall be followed by taking photograph of the
applicant where the applicant is an individual or of such individuals in relation to the
applicant as notified under sub-section (6C) of section 25 where the applicant is not an
individual, along with the verification of the original copy of the documents uploaded
with the application in FORM GST REG-01 at one of the Facilitation Centres notified
by the Commissioner for the purpose of this sub-rule and the application shall be deemed
to be complete only after successful verification as laid down under this proviso.”

3.3 Policy measures required for All India rollout of Biometric based Aadhar
Authentication
3.3.1 GST Council in its 49th meeting dated 18.02.2023 recommended substitution of sub-rule (4A)
of rule 8 of the CGST Rules, 2017 in order to mandate biometric-based Aadhaar authentication for
high-risk applicants who opt for authentication of Aadhaar number. It also recommended amendment
of sub-rule (5) of rule 8 of the said Rules in order to provide that acknowledgement shall be issued to
the applicant only after completion of biometric-based authentication. In addition, the Council
recommended amendment to rule 9 to provide for mandatory physical verification of an applicant
who has undergone biometric-based Aadhaar authentication and is identified on the common portal,
based on data analysis and risk parameters. The Council had also recommended that the above-
mentioned amendments to rules 8(4A), 8(5) and 9 may be made only in Gujarat GST Rules, 2017 and
in the CGST Rules, 2017 at that stage. Further, the Council also recommended insertion of sub-rule
(4B) in Rule 8 of the CGST Rules, 2017 to provide for exemption from biometric-based Aadhaar
authentication in States/UTs where the biometric based Aadhar authentication was not being
undertaken and for this, the Centre would need to issue a Notification under Rule 8(4B) for specifying
all States and UTs, except State of Gujarat, where provisions of Rule 8(4A) would not apply.
Subsequently, States of Andhra Pradesh and Puducherry were also notified, as mentioned in para 2
above, under the said sub-rule (4B) for making the provisions of sub-rule (4A) of rule 8 of the CGST
Rules applicable in these States. Further, in the 50th meeting of GST Council, it was recommended
Agenda for 53rd GSTCM Volume 3
Page 35 of 55
that the amendments in rule 8(5), rule 9(1) and rule 9 (2) of CGST Rules, as have been notified by
Centre vide notification no. 26/2022-CT dated 26.12.2022, may also be notified by all States.
3.3.2 Therefore, considering the above, all the States/UTs other than the States of Gujarat,
Puducherry and Andhra Pradesh, shall be required to substitute sub-rule (4A) of rule 8 of their
respective SGST Rules on the same lines as done by the Centre vide notification no. notification
no.04/2023 dated 31.03.2023, to implement the said biometric based Aadhar authentication for GST
registration in their respective jurisdictions.
3.3.3 Further, all the States including States of Gujarat, Puducherry and Andhra Pradesh, will
also be required to insert the second proviso in sub-rule (4A) of rule 8 of their respective SGST
Rules as detailed in para 3.2.2 above.

3.3.4 Law Committee also recommended that Centre may notify all the remaining States/Union
territories (UTs) for under sub-rule (4B) of rule 8 of CGST Rules for enabling the same. As per the
present notification under sub-rule (4B) of rule 8 of CGST Rules, all States/UTs other than the States
of Gujarat, Puducherry and Andhra Pradesh have been notified where proviso to sub-rule (4A) of rule
8 is not applicable. As for All India roll out of biometric-based Aadhaar authentication, none of the
State/UTs need to be exempted from the applicability of the proviso to sub-rule (4A) of rule 8, it is
proposed that the existing notifications (Notification no. 27/2022-Central Tax dated 26.12.2022
as amended by Notification no.31/2023 dated 31.07.2023 and Notification no. 54/2023 dated
17.11.2023) issued by the Central Government under sub-rule (4B) of rule 8 of CGST Rules
may be rescinded.
4 Accordingly, agenda is placed before the GST Council for approval.
*****






Agenda for 53rd GSTCM Volume 3
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Agenda Item 7 (Part-II): GST Appellate Tribunal - Status update and issues for approval

Introduction – Status Update
The GST Council in its 52nd meeting held on 07.10.2023, recommended amendments in
Section 110 of the CGST Act to align the provisions of the CGST Act, 2017 (in respect of
Appointment of President and Member of the proposed GST Appellate Tribunals) with the provisions
of the Tribunal Reforms Act, 2021. Accordingly, the said amendments were carried out vide Central
Goods and Services Tax (2nd Amendment) Act, 2023 and the same was enacted on 28.12.2023.
2. Thereafter, post the notification for the constitution of the Principal Bench and the State
Benches of GSTAT, the process for appointment of the President of the GSTAT was initiated and
Justice (Retd.) Sanjaya Kumar Mishra, former Chief Justice, High Court of Jharkhand was appointed
as the President of Goods and Services Tax Appellate Tribunal vide order dated 01.05.2024. He
assumed office on 06th May 2024.
3. In addition to the above, the process of search, selection and appointment of 63 Judicial
Members, 32 Technical Members (Centre) and 1 Technical Member (State), to be done by the Centre,
has also been initiated which is likely to be completed by mid-July. Similarly, 953 posts of
subordinate staff have been sanctioned and the process of filling up of the said posts of supporting
staff is under process. In addition to the above, work on search and selection of Technical Member
(State) for the 31 State Benches is being carried out by the States vide the respective State level
ScSCs constituted for the same. The States are required to formulate their respective ScSCs and carry
out the process for selection of a panel of 2 names for each post of Technical Member (State); which
will then be sent to the Appointments Committee of the Cabinet for selection and appointment of the
31 Technical Members (State).
4. For creation of physical and digital infrastructure, work in respect of identification of office
space and development of office infrastructure of the Principal Bench and the State Benches of the
GSTAT is being actively pursued. Similarly, it is proposed that filing of appeals in the GSTAT would
be completely online and would be developed by GSTN and NIC.



Agenda for 53rd GSTCM Volume 3
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Approval of the GST Council sought on Relaxation regarding eligibility of Technical Member
(State) earlier provided by the GIC

5. Some states had requested for relaxation in the qualification of Technical Member (State).
Section 110(1)(d), which also 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.
6. Recommendation of the GST Council was required for the purpose of such relaxations by the
States. The requests for relaxation were placed before the GIC and wherever approved the same has
been communicated to the State Governments. A summary of relaxation granted to each state is given
in Annexure 1.
7. It is requested that the Council ratify the approvals provided by the GIC on the proposals
detailed above.
8. Further proposals have been received from the below mentioned States for relaxation in
qualification and eligibility criteria as per section 110(1)(d) and proviso thereof:-
a) Gujarat, Maharashtra and Mizoram (to notify the rank of officer working in the State, not
lower than the rank of the First Appellate Authority, who would be eligible for Technical
Member (State));
b) Delhi and Chhattisgarh (to reduce the requirement of the officer having completed twenty-
five years in the Government in Group A, or equivalent, to be eligible for Technical Member
(State)).
Agenda for 53rd GSTCM Volume 3
Page 38 of 55
9. The detailed summary of the same is placed in Annexure 2 to the Agenda Note. It is
requested that approval of the Council may be accorded on the relaxations sought by Gujarat,
Maharashtra and Mizoram; and Delhi and Chhattisgarh.
10. Respective State Governments are required to notify the above stated relaxations in
qualification and eligibility for the Technical Members (State). For the purpose of ensuring
uniformity, a draft notification has been prepared and is being placed before the GST Council in
Annexure 3 for approval.
Approval of the Council sought for amendment of notifications issued earlier
11. As per section 109, the notification for constitution of the Principal Bench and another
notification for the constitution of the State Benches were issued. In the notification of constitution of
the State Benches, it is necessary to provide clarity on the location of the State Bench and also
provide the location of the sitting associated with the bench.
12. Moreover, given the number of taxpayers in Goa and Puducherry, assigning a full sitting of
division bench to Panaji and Puducherry is disproportionate. Accordingly, it is proposed that the
Sittings in Panaji and Puducherry may be converted as Circuit Benches and benches in Mumbai and
Chennai being converted to a full Bench.
13. A consolidated master notification covering all the above changes is being placed before the
GST Council in Annexure 4 for approval.
14. It is also necessary to notify the jurisdiction of each of the benches and sittings in cases where
there are sittings in more than one location. Recommendations have been sought from the States.
States are requested to forward the same so that the same can be notified with the approval of the
Council in its next meeting.
Decision points
15. In light of the above, approval of the GST Council is sought for the following:
(a) Take on record status update as per paras 1-4 above.
(b) Approvals to the States regarding relaxation in qualifications and eligibility along with
approval of the draft notification which may be issued by the States for the purpose of
relaxation of qualification criteria for Technical Member State as per para 5-10 above.
(c) Approval of a master notification of GSTAT clearly notifying the GSTAT, the location
of the Benches, the locations of the sittings associated with the Benches and the
jurisdiction of the said Benches and associated sittings as per para 11-13 above. This
includes notifying Puducherry and Panaji as circuit benches.
*****

Agenda for 53rd GSTCM Volume 3
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ANNEXURE - 1
Relaxation States to
which
approval
granted
Remarks
As per proviso to
Section
110(1)(d),
relaxation has
been sought to
reduce the
requirement of
the officer
having
completed
twenty-five
years in the
Government in
Group A, or
equivalent






Gujarat Proposal of State of Gujarat for notifying an officer of the
Commercial Tax Department of Gujarat, 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.
Goa Proposal of 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.
Himachal
Pradesh
Proposal of State of Himachal Pradesh for notifying an officer of
the Commercial Tax Department of Himachal Pradesh, 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.
Odisha Proposal of State of Odisha for notifying an officer of the
Commercial Tax Department of Odisha, who has completed
fifteen years of service as Group A or equivalent subject to overall
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.
Rajasthan Proposal of State of Rajasthan for notifying an officer of the
Commercial Tax Department of Rajasthan, who has completed at
least fifteen years as Group A or equivalent subject to overall
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.
Uttarakhand Proposal of State of Uttarakhand for notifying an officer of the
Commercial Tax Department of Uttarakhand, 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.
Haryana Proposal of State of Haryana for notifying an officer of the
Commercial Tax Department of Haryana, 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.
Tamil Nadu Proposal of State of Tamil Nadu for notifying an officer of the
Commercial Tax Department of Tamil Nadu, who has completed at
least fifteen years as Group A or equivalent subject to overall
twenty-five years of service in the Government, as Gazetted
Officer, to be eligible for the appointment as Technical Member
Agenda for 53rd GSTCM Volume 3
Page 40 of 55
Relaxation States to
which
approval
granted
Remarks
(State) in the State Bench.
Bihar Proposal of the State of Bihar for notifying an officer of the
Commercial Tax Department of Bihar, 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).
Uttar
Pradesh
Proposal of the State of Uttar Pradesh for notifying an officer of
the State Tax Department of Uttar Pradesh, 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).
Andhra
Pradesh
Proposal of State of Andhra Pradesh for notifying an officer of the
Commercial Tax Department of Andhra Pradesh, who has
completed at least twenty years as Group A or equivalent
subject to overall 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.


Agenda for 53rd GSTCM Volume 3
Page 41 of 55
ANNEXURE - 2
Relaxation States for
which
approval
required
Remarks
As per proviso to
Section 110(1)(d),
relaxation has been
sought to reduce the
requirement of the
officer having
completed twenty-
five years in the
Government in
Group A, or
equivalent, to be
eligible for Technical
Member (State)
Delhi and
Chhattisgarh
(i) For Delhi: Proposal for notifying an officer of All
India Service (Group ‘A’) of AGMUT Cardre in the State
Government of Delhi, who has completed at least fifteen
years of service in the Government as Group A or
equivalent, subject to overall twenty-five years of
service, to be eligible for the appointment as Technical
Member (State) in State Bench.

(ii) For Chhattisgarh: Proposal for notifying an officer
of the Commercial/State Tax Department of Chhattisgarh,
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 State
Bench.
As per Section
110(1)(d), relaxation
has been sought to
notify the rank of
officer working in
the State, not lower
than the rank of the
First Appellate
Authority, who
would be eligible for
Technical Member
(State)
Maharashtra,
Gujarat &
Mizoram
(i) Proposal of State of Maharashtra for notifying the
rank of an officer of the State of Maharashtra, not below
the rank of “Joint Commissioner of Sales Tax or 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;

(ii) Proposal of State of Gujarat for notifying the rank
of an officer of the State of Gujarat, not below the rank of
“Joint Commissioner of Gujarat Value Added Tax or
Gujarat Goods and Services Tax”, as the 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.

(iii) Proposal of State of Mizoram to notify the Joint
Commissioner as the minimum qualifying rank of the
officer of the State of Mizoram, who shall be eligible for
Technical Member (State), subject to other conditions of
section 110(1)(d) of the CGST Act, 2017.

Agenda for 53rd GSTCM Volume 3
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ANNEXURE - 3
[To be published in the Gazette of State of <State Name>, <reference of section>]
<State Name>
Government of <State Name>

Notification No. xx/202x – State Tax

<Place>, the <Date>

G.S.R.....(E).- In exercise of the powers conferred by clause (d) of sub-section (1) of section 110 of
the Central Goods and Services Tax Act, 2017 (12 of 2017), and the proviso thereof, the Government
of <State Name>, on the recommendations of the Council, in respect of the qualification of the
officers of <State Name> for appointment as a Technical Member (State) in the State Benches of
Goods and Services Tax Appellate Tribunal, hereby:
(i) relaxes the qualification from the requirement of “completion of twenty-five years of service in
Group A, or equivalent” as per proviso to clause (d) of sub-section (1) of section 110 of Central
Goods and Services Tax Act, 2017 (12 of 2017) to “<as per the approval granted to the State by the
council>” for a period of ten years from the date of publication of this notification:
[point (i) only is to be notified by Himachal Pradesh, Goa, Odisha, Rajasthan, Uttar Pradesh, Bihar,
Uttarakhand, Tamil Nadu, Haryana, Andhra Pradesh, Delhi and Chhattisgarh]
(ii) specifies “Joint Commissioner” in place of “Additional Commissioner” in clause (d) of sub-
section (1) of section 110 of Central Goods and Services Tax Act, 2017 (12 of 2017).
[point (ii) only is to be notified by Maharashtra and Mizoram]
[point (i) and (ii) both are to be notified Gujarat]
2. All other conditions as contained in clause (d) of sub-section (1) of section 110 of Central
Goods and Services Tax Act, 2017 (12 of 2017) shall also apply.

[F. No. State/no./name-GST]

(Name Name)
Under Secretary to the Government of <State Name>
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ANNEXURE - 4
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINATY, PART II,
SECTION 3, SUB-SECTION(i)]
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, dated June, 2024
G.S.R. (E).— In exercise of the powers conferred by the sub-sections (1), (3) and (4) of
section 109 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and in supersession of
the Ministry of Finance, Department of Revenue’s notification numbers S.O.1(E), published in the
Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 29th December, 2023,
and S.O.4073(E), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section
(ii), dated the 14th September, 2023 except as respect things done or omitted to be done before such
supersession, the Central Government, on the recommendation of the Goods and Services Tax
Council, hereby-
(i) establishes the Goods and Services Tax Appellate Tribunal (GSTAT), with effect from the 1st
day of September, 2023;
(ii) constitutes the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at
New Delhi; and
(iii) constitutes the number of State Benches of the Goods and Services Tax Appellate Tribunal as
specified in column (3) of the table below, with respect to the State specified in the corresponding
entry in column (2) of the said table, at the location specified in corresponding entry in column (4)
thereof, with the Sitting or Circuit Bench specified in column (5) thereof, namely:—
S.No. State Name
No. of
Benches
Location Sitting / Circuit
(1) (2) (3) (4) (5)
1 Andhra Pradesh 1 Vishakhapatnam Vijayawada
2 Bihar 1 Patna -
3 Chhattisgarh 1 Raipur Bilaspur
4 Delhi 1 Delhi -
5 Gujarat
2
Ahmedabad -
6
Dadra and Nagar Haveli and Daman
and Diu
Surat Rajkot
7 Haryana 1 Gurugram Hissar
8 Himachal Pradesh 1 Shimla -
9 Jammu and Kashmir
1 Jammu Srinagar
10 Ladakh
11 Jharkhand 1 Ranchi -
12 Karnataka 2 Bengaluru -
13 Kerala
1 Trivandrum Ernakulum
14 Lakshadweep
15 Madhya Pradesh 1 Bhopal -
Agenda for 53rd GSTCM Volume 3
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16 Goa
3
Mumbai Panaji (Circuit)
17 Maharashtra
Pune Thane
Nagpur Aurangabad
18 Odisha 1 Cuttack -
19 Punjab
1 Jalandhar Chandigarh
20 Chandigarh
21 Rajasthan 2
Jaipur -
Jodhpur -
22 Tamil Nadu
2
Chennai
Puducherry
(Circuit)
23 Puducherry Coimbatore Madurai
24 Telangana 1 Hyderabad -
25 Uttar Pradesh 3
Lucknow -
Varanasi Prayagraj
Ghaziabad Agra
26 Uttarakhand 1 Dehradun -
27 Andaman and Nicobar Islands
2 Kolkata - 28 Sikkim
29 West Bengal
30 Arunachal Pradesh
1 Guwahati
Aizawl(Circuit )
Agartala(Circuit )
Kohima (Circuit )
31 Assam
32 Manipur
33 Meghalaya
34 Mizoram
35 Nagaland
36 Tripura

Explanations —
(i) Locations shown as 'Circuit' shall be operational in such manner as the President may order,
depending upon the number of appeals filed by suppliers in the respective States/jurisdiction;
(ii) The Additional Sitting associated with the Bench shall be operated by one Judicial Member and
one Technical Member.
[F. No. A-50050/150/2018-CESTAT-DoR]
______, Jt. Secy.

Agenda for 53rd GSTCM Volume 3
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Agenda Item 8 : Performance Report of the Anti-profiteering authorities for the 2nd quarter (July to
September 2023) 3rd quarter (October to December 2023) and 4th quarter (January to March, 2024) for the
information of the GST Council

The performance report of Anti-profiteering authorities at various levels for the 2nd quarter (July to
September, 2023), 3rd quarter (October to December, 2023) and 4th quarter (January to March,
2024) of Financial Year 2023-24 at various levels, is as under:

2.1 Performance 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
quarter
No. of cases
Where
Profiteering
established
No. of cases
Where
Profiteering
not established
No. of
cases
referred
back to
DGAP
Quarter 1st July, 2023 to 30th September, 2023
176 2 27 0 17 10 151
Quarter 1st October, 2023 to 31st December, 2023
151 3 13 4 3 6 141
Quarter 1st January, 2024 to 31st March, 2024
141 3 87 0 3 84* 57
Note- * 83 out of 84 cases which pertains to real estate sector were 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.

2.2 Performance 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,2023 to 30th September, 2023
35 15 2 1 1 48
Quarter 1st October,2023 to 31st December, 2023
48 6 2 0 2 52
Quarter 1st January,2024 to 31st March, 2024
52 87 3 3 0 136

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2.3 Performance report of the Standing Committee on Anti-profiteering:
Opening Balance
(No. of cases)
Receipt Disposal Closing Balance (No. of
cases)
Quarter 1st July, 2023 to 30th September, 2023
44 126 111 59
*Reports for Quarter 1st October, 2023 to 31st December, 2023 and Quarter 1st January, 2024 to 31st
March, 2024 are yet awaited.


2.4 Performance report from the State Level Screening Committee:

Opening Receipt Disposal Closing
Balance (No. of cases) Cases referred to
Standing Committee
Cases Rejected Balance
(No. of
cases)
Quarter 1st July, 2023 to 30th September, 2023
95 135 7 89 134
*Report from Karnataka, Kerala and Tamil Nadu has not been received
Quarter 1st October, 2023 to 31st December, 2023
134 133 7 132 128
*Report from Bihar, Karnataka, Kerala and Tamil Nadu has not been received
Quarter 1st January, 2024 to 31st March, 2024
128 59 2 119 66
*Report from Bihar, Haryana, Karnataka, Kerala, Odisha, Rajasthan, Tamil Nadu and Telangana
has not been received

3. During these quarters CCI has undertaken the following activities/initiatives-
(i). The Quarterly Performance report for the quarter 1st July, 2023 to 30th September,
2023 is submitted as under:-
i. The mandate to examine profiteering has been 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 has been restored w.e.f. 23.05.2023 with the joining of the Chairperson. Proceedings
in anti-profiteering cases has commenced w.e.f. 22.06.2023.
ii. Total 27 Orders comprising of 17 Final Orders and 10 Interim Orders have been passed by
the Commission during the quarter ending on 30.09.2023. As on 30.09.2023, 151 cases of
anti-profiteering are pending with Commission.
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iii. Nine Ordinary meetings of the Commission were held during the quarter ending on
30.09.2023 wherein 79 cases were taken up and necessary directions were given by the
Commission.
iv. 15 hearings in 9 cases were accorded by the Commission during the quarter ending on
30.09.2023.
v. The erstwhile NAA had passed 380 orders since its inception establishing profiteering of
Rs. 2563 Cr. (Approx.), out of which an amount of Rs. 563 Cr. (Approx.) has either been
passed on to the buyers or deposited in the Consumer Welfare Funds or deposited with the
High Courts.
vi. For the quarter ending on 30.09.2023, out of 12 complaints, 4 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 8 complaints
which related to other GST/Enforcement issues were forwarded to the Jurisdictional State &
Central GST Commissioners/Chief Commissioners for necessary action.
(ii). The Quarterly Performance report for the quarter 1st October, 2023 to 31st
December, 2023 is submitted as under:-
i. The mandate to examine profiteering has been 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 has been 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 Commission has passed
40 orders in Anti-Profiteering cases till 31.12.2023.
ii. Total 13 Orders comprising of 7 Final Orders and 6 Interim Orders have been passed by
the Commission during the quarter ending on 31.12.2023 in which profiteering of Rs.
31,32,068/- has been established. As on 31.12.2023, 141 cases of Anti-Profiteering are
pending with Commission.
iii. Eight Ordinary meetings of the Commission were held during the quarter ending on
31.12.2023. Therefore, total 20 Ordinary meetings were held by the Commission w.e.f.
01.12.2022 till 31.12.2023.
iv. 13 hearings in 11 cases were accorded by the Commission during the quarter ending on
31.12.2023. In total 28 hearings in 20 cases were given by the Commission w.e.f. 01.12.2022
till 31.12.2023.
v. W.e.f. 01.12.2022 till 31.12.2023, the Commission has forwarded 115 complaints to the
respective Authorities for further necessary action. For the quarter ending on 31.12.2023, out
of 14 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 8 complaints which related to other GST/Enforcement issues
were forwarded to the Jurisdictional State & Central GST Commissioners/Chief
Commissioners for necessary action.
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(iii) The Quarterly Performance report for the quarter 1st January, 2024 to 31st March,
2024 is submitted as under:-
i. The mandate to examine profiteering has been 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 has been 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 Commission has passed
44 orders in anti-profiteering cases till 31.03.2024.
ii. Total 4 Orders comprising of 3 Final Orders and 1 Interim Order have been passed by the
Commission during the quarter ending on 31.03.2024. As on 31.03.2024, 57 cases of anti-
profiteering are pending with Commission.
iii. DGAP made a detailed presentation before the Commission on 07.03.2024 relating to the
implications of the Judgement of the Hon'ble Delhi High Court dated 29.01.2024. Further,
DGAP vide letter dated 14.03.2024 intimated that opinion of the Legal Counsel was obtained
by DGAP, which highlighted that square feet approach suggested by Hon'ble High Court was
“justified and reasonable” in real estate cases.
Therefore, as directed by the Commission, 83 cases of real estate sector have been sent back
to the DGAP for re-investigation for re-working the profiteered amount within a period of
three months in terms of judgement dated 29.01.2024 of Hon'ble Delhi High Court.
iv. Eight Ordinary meetings of the Commission were held during the quarter ending on
31.03.2024. Therefore, total 28 Ordinary meetings were held by the Commission w.e.f.
01.12.2022 till 31.03.2024.
v. 3 hearings in 3 cases were accorded by the Commission during the quarter ending on
31.03.2024. In total 31 hearings in 22 cases were given by the Commission w.e.f, 01.12.2022
till 31.03.2024.
vi. W.e.f. 01.12.2022 till 31.03.2024, the Commission has forwarded 127 complaints to the
respective Authorities for further necessary action. For the quarter ending on 31.03.2024, out
of 12 complaints, 5 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 7 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 quarterly performance report of the Anti-profiteering Authorities for
the quarters i.e. 2nd quarter (July to September, 2023, 3rd quarter (October to December, 2023)
and 4th quarter (January to March, 2024) of Financial Year 2023-24 is placed before the GST
Council.

*****

Agenda for 53rd GSTCM Volume 3
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Agenda Item 9 : Ad-hoc Exemptions Order(s) issued under Section 25(2) of Customs Act, 1962 to be placed
before the GST 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:
3.
Order No. Date Remarks
AEO No.
01 of 2024 01.02.2024
Exemption from Customs duty on import of technical
documentation by M/s Indo-Russian Rifles Pvt. Ltd.
(order copy enclosed ).
AEO No.
02 of 2024 10.05.2024
Joint Counter Terrorism Training exercise
(TARKASH-VII) between US special forces & NSG
at Kolkata during April-May 2024 (order copy
enclosed ).
AEO No.
03 of 2024 31.05.2024
Waiver of Customs duty u/s 25(2) of the Customs
Act, 1962 for import of 04 armoured vehicles by
MEA (order copy enclosed).

4. This is placed for the information of GST Council.



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