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January 22, 2018

GST Council Meeting 18.01.2018

25th GST Council meeting was held at New Delhi on 18.01.2018 under the chairman ship of Shri Arun Jetley, the Honorable Finance Minister. Discussions relating to-

  • exemptions;
  • changes in GST rates;
  • ITC eligibility criteria;
  • Rationalization of rates;

were held in the meeting. Accordingly below said decisions will be given effect to through Gazette Notifications/circulars.

Cutback in GST rate

 

28% to 18%;
  • Old and used motor vehicles (medium and large cars and SUVs) on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/VAT or GST paid on such vehicles has been availed by him;
  • Buses, for use in public transport, which exclusively run on bio-fuels.
28% to 12%
  • All types of old and used motor vehicles (other than medium and large cars and SUVs)on the margin of the supplier of subject to the conditions that no input tax credit of central excise duty/VAT or GST paid on such vehicles has been availed by him.
18% to 12%;  The GST Council recommended the reduction of GST rate from 18% to 12% to the following goods-

  • Sugar boiled confectionary;
  • Drinking water packed in 20 litters bottles;
  • Fertilizer grade Phosphoric acid;
  • Bio-diesel;
  • Bio-pesticides
18% to 5%
  • Tamarind Kernel Powder
  • Mehendi paste in cones
  • LPG supplied for supply to household domestic consumers by private LPG distributors
  • Scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mock ups and modules, raw material and consumables required for launch vehicles and satellites and payloads.
  • Satellites and payloads and scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mock ups and modules, raw material and consumables required for launch vehicles and satellites and payloads (IGST rates)
12% to 5%
  • Articles of straw, of esparto or of other plaiting materials;
  • Basket ware;and
  • Wickerwork.
  • Velvet fabric – subject to the condition that refund of unutilized input tax credit is available
3% to 0.25%
  • diamonds and precious stones.
Nil GST Rate
  • Vibhuti
  • Parts and accessories for manufacture of hearing aids;
  • De-oiled rice bran.

Enhancement in GST rate

12% to 18%
  • Cigarette filter rods
Nil to 5%
  • Rice bran (other than de-oiled rice bran)

Cutback in GST  rate of Services

28% to 18%; · Admission to theme parks, water parks, joy rides, merry-go-rounds, go-caring and ballet
18% to 12%;  · GST rate on construction of metro and monorail projects (construction, erection, commissioning or installation of original works);· Works contract services provided by sub contractor to the main contractor providing works contract service to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12%
18% to 5% · Tailoring service;· Transportation of petroleum crude and petroleum product

· Common effluent treatment plants services of treatment of effluents
Exemption GST/IGST
  • Viability Gap Funding for a period of 3 years from the date of commencement of RCS airport from the present period of one year;
  • Supply of services by way of providing information under RTI Act, 2005;
  • Legal services provided to Government, local authority, Governmental Authority and Government Entity;
  • Transportation of goods from India to a place outside India by air; (available up to 30.09.2018)
  • Transportation of goods from India to a place outside India by sea and provide that value of such service may be excluded from the value of exempted service for the purpose of reversal of ITC (available up to 30.09.2018);
  • Naval Insurance Group Fund by way of Life Insurance to personnel of Coast Guard under the Group Insurance Scheme of the Central Government retrospectively from 01.07.2017;
  • Exemption to IGST payable under section 5(1) of IGST Act on supply of services covered by item 5(c) of Schedule II of CGST Act, to the extent of aggregate of the duties and taxes levaible under section 3(7) of Customs Tariff Act read with sections 5 and 7 of IGST Act on part of consideration declared under section 14(1) of the Customs Act, towards royalty and license fee includible in transaction value as specified under Rule 10(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
  • Enhance exemption limit of ₹ 5,000/- per month to ₹ 7500/- per month in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution.
  • Dollar denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India to a person outside India.
  • Services by government or local authority to governmental or governmental entity, by way of lease of land and supply of land or undivided share of land by way of lease or sub lease where such supply is a part of specified composite supply of construction of flats etc., and to carry out suitable amendment in the provision relating to valuation of construction service involving transfer of land or undivided share of land, so as to ensure that buyers pay the same effective rate of GST on property built on leasehold and freehold land.
  • Pure services provided to Government entity;
  • To expand pure services exemption to include composite supply involving predominantly supply of services i.e.,up to 25% of supply of goods;
  • Services relating to admission to, or conduct of examination provided to all educational institutions;
  • Services by educational institution by way of conduct of entrance examination against consideration in the form of entrance fee;
  • Reinsurance services in respect of insurance schemes exempted;
  • To increase threshold limit for exemption for all theatrical performances from ₹ 250/- to ₹ 500/- per person and to the services by way of admission to a planetarium;
  • Services by way of fumigation in a warehouse of agricultural produce;
  • Subscription of online educational journals/periodicals by educational institutions who provide degree recognized by any law from GST.
  • Renting of transport vehicles provided to a person providing services of transportation of students, faculty and staff to an educational institution providing education up to higher secondary or equivalent.
  • Services provided by an to FederationInternationale de Football Association and its subsidiaries directly or indirectly related to any of the events under FIFA U – 20 World Cup in case the said extent is hosted by India.
  • Government’s share of profit petroleum from GST and to clarify that cost petroleum is not taxable per se.

Cutback in  compensation cess

NIL rate of compensation cess from the applicable rate to the following-

  • Motor vehicles (falling under heading 8702,as it was in excise regime) cleared as ambulances, duly fitted with all fitments, furniture and accessories necessary for an ambulance from the factory manufacturing such vehicles. 10 – 13 seater ambulances, subject to specified conditions;
  • Old and used motor vehicles (medium and large cars and SUVs) on the margin of the supplier, subject to the condition that no input tax credit of Central Excise duty/VAT or GST paid on such vehicles has been availed of by him;
  • All types of old and used motors (other than medium and large cars and SUVs) on the margin of the supplier of subject to the conditions that no input tax credit of central excise duty/VAT or GST paid on such vehicles has been availed by him.

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