The 23rd GST Council meeting increased composition limits, lowered rates, and simplified compliance. These major updates are effective from Nov 15, 2017.
The 23rd Goods and Services Tax (GST) Council convened on November 10, 2017, announcing significant changes based on its press release. These amendments were set to take effect from November 15, 2017, with some modifications awaiting official notification, indicated by an asterisk (*). Further details are available for download here.
Amendments to the Composition Scheme
Several adjustments were introduced for the Composition Scheme: * The turnover limit for eligibility was proposed to increase to Rs 1.5 crore, with a potential future extension to Rs 2 crore. * A reduced GST rate of 1% was set for manufacturers and traders. * This 1% composition tax applies only to the turnover of taxable goods, excluding exempted goods. * Businesses offering both goods and services are eligible if their service component does not exceed Rs 5 lakhs in total. * The deadline for filing Composition Returns (GSTR-4) for the July to September period was extended to December 24, 2017. * Composition dealers are restricted from engaging in inter-state sales and cannot claim input tax benefits.
Simplification of GSTR Compliance
Measures were implemented to simplify GSTR compliance for businesses: * All entities are required to file GSTR-1 and GSTR-3B until March 2018. * A Committee of Officers will subsequently determine the filing dates for GSTR-2 and GSTR-3 for the period of July 2017 to March 2018. * Businesses with an annual turnover below Rs 1.5 crore must file GSTR-1 quarterly. * Businesses exceeding Rs 1.5 crore in turnover are required to file GSTR-1 monthly. * All businesses must submit GSTR-3B by the 20th of the following month, applicable until March 2018.
Revised GSTR-1 Filing Deadlines
The due dates for GSTR-1 submissions were revised based on turnover:
For Businesses with Turnover up to Rs 1.5 Crore (Quarterly Filing):
| Period | Due Dates |
|---|---|
| July – September | December 31, 2017 |
| October – December | February 15, 2018 |
| January – March | April 30, 2018 |
For Businesses with Turnover exceeding Rs 1.5 Crore (Monthly Filing):
| Month | Dates |
|---|---|
| July to October | December 31, 2017 |
| November | January 10, 2018 |
| December | February 10, 2018 |
| January | March 10, 2018 |
| February | April 10, 2018 |
| March | May 10, 2018 |
Exemptions for Service Providers
Service providers with an annual turnover up to Rs 20 lakhs were exempted from GST registration requirements. This exemption applies even to those involved in inter-state supplies or transactions through e-commerce operators.
Impact on Restaurants
Restaurants faced new regulations: * The GST rate for restaurants was reduced to 5%, but this came with the condition of no input tax credit. * For restaurants located within hotels where the room tariff is less than Rs 7,500, the GST rate is 5%, with no ITC allowed on inward supplies. * For restaurants in hotels with room tariffs exceeding Rs 7,500, the GST rate is 18%, and input tax credit on inward supplies can be claimed. * Outdoor catering services continue to be taxed at 18%, with the benefit of input tax credit on inward supplies.
Additional Taxpayer Relief Measures
Several other relief provisions were introduced: * Regular taxpayers are not required to pay GST on advances received for the supply of goods. * Reduced Late Fees: The late fee for delayed filing of NIL tax GSTR-3B was cut from Rs 200 to Rs 20 per day. Other taxpayers are now liable for a late fee of Rs 50 per day for GSTR-3B delays. * Late Fee Credit: Late fees previously paid for GSTR-3B for July, August, and September were waived. Any such fees already paid would be credited back to the Electronic Cash Ledger under ‘Tax’ and could be used for future GST payments. * A manual filing process for Advance Ruling applications was to be introduced. * Export of services to Nepal and Bhutan became exempt from GST. * Exporters of services to Nepal and Bhutan were also allowed to claim a refund of any input tax credit paid. * TRAN-1 forms could be filed and revised only once until December 31, 2017. * The Committee of Officers was tasked with determining the specific timelines for filing GSTR-2 and GSTR-3 for July to March 2018, ensuring that this would not affect subsequent GSTR-1 filings.
Further GSTR Filing Extensions
Additional extensions for various GSTR filings were announced:
| Return Type | Revised Due Date | Old Due Date |
|---|---|---|
| GSTR-4 (Composition Dealers) | December 24, 2017 | November 15, 2017 |
| GSTR-5 (July to October) | December 11, 2017 | Earlier of August 20, 2017, or 7 days from registration |
| GSTR-5A (July to October) | December 15, 2017 | November 20, 2017 |
| GSTR-6 (July 2017) | December 31, 2017 | August 13, 2017 |
| ITC-04 (Job Work) for Jul-Sep Quarter | December 31, 2017 | October 25, 2017 |
GST Rate Revisions
A number of GST rate changes were implemented: * Manufacturers and traders under the composition scheme were subject to a 1% GST rate*. * Items like shampoo, perfume, tiles, and watches saw their GST rate reduced from 28% to 18%, effective November 15, 2017. * Wet grinders and tanks had their rates lowered from 28% to 12%. * Condensed milk, refined sugar, and diabetic food products were reduced from 18% to 12%. * Desiccated coconut, idli/dosa batter, and coir products saw rates decrease from 12% to 5%. * Duar meal, khandsari sugar, and dried vegetables were moved from 5% to Nil GST.
