The 53rd GST Council meeting, held on June 22nd, 2024, brought forth a wave of positive changes for businesses. Let’s dive into the key takeaways and how they will impact you.

Summary of the 53rd GST Council Meeting

The GST Council met on June 22, 2024, and proposed several measures to make things easier for taxpayers. These include:

• More time for tax credits: Businesses will have more time to claim input tax credits (ITC).
• Relief from penalties: In some cases, interest and penalties on taxes may be waived.
• Lower advance tax payments: Businesses may be required to pre-pay less tax upfront.
• Expiry of anti-profiteering rules: There’s a proposal for an end date (sunset clause) on rules that penalize businesses for not passing on tax benefits to customers.
• GST rate changes: The Council has recommended adjustments to GST rates on various goods and services.

The Council also clarified how GST applies to specific situations, such as:

• Importing services between connected companies.
• Taxes on corporate guarantees.
• Claiming input tax credit under the reverse charge mechanism (RCM).

Read on to know more.

Key recommendations/decisions made by the 53rd GST Council Meeting:

Proposed legislative changes

Relaxation in the time limit for availing ITC	Deadline extended for claiming tax credits (ITC) from FY 2017-18 to 2020-21 – new deadline Nov 30, 2021.
Conditional waiver of interest or penalty	You can get interest and penalty waived on tax demand notices from FY 2017-18 to 2019-20 issued under Section 73. But you must pay the entire tax amount by March 31, 2025. This is a government program to help taxpayers during the initial years of GST implementation.
Reduction in pre-deposit for filing an appeal under GST	Appeals are getting easier to file: The minimum amount required to file an appeal has been lowered.Tax Authorities: Appeals against tax authorities now only require a pre-deposit of ₹20 crore (both CGST & SGST) instead of the previous limit.GST Appellate Tribunal (GSTAT): The pre-deposit amount for GSTAT appeals has been reduced from 20% (with a maximum of ₹50 crore) to 10% (with a maximum of ₹20 crore) for both CGST & SGST.
Time limit for filing appeals before GSTAT	The government will announce a specific date in the future, which will mark the start of the three-month window for filing appeals before the GSTAT.
Interest applicability on delayed filing of return	Good news for late filers: If you file a GST return late, interest won’t be charged on the tax amount already deposited in your Electronic Cash Ledger (ECL).
Monetary limits for filing appeals by the department	Appeal Limits for Department to be Notified: The government will announce specific amounts for the department to file appeals before the GSTAT, High Court, and Supreme Court. GSTAT – 20 lakhs High Court – 1 crore Supreme Court – 2 crores
Sunset, clause for anti-profiteering applications	Anti-profiteering rules to have an end date: The government is proposing to stop accepting new anti-profiteering cases after April 1, 2025. These cases involve penalizing businesses for not passing on tax benefits to customers. Existing cases will be heard by the main GST Appellate Tribunal (GSTAT) instead of the current panel.
Reduction in rate of TCS collected by ECOs	A reduction in the TCS rate to 0.5% (0.25% CGST + 0.25 % SGST) has been proposed to ease the financial burden on the suppliers making supplies through an ECO.
Refund of additional IGST on upward price revision	A reduction in the TCS rate to 0.5% (0.25% CGST + 0.25 % SGST) has been proposed to ease the financial burden on the suppliers making supplies through an ECO.
Refund of additional IGST on upward price revision	A mechanism will be prescribed for claiming a refund of additional IGST paid owing to an upward price revision after the export of goods.
Insertion of Section 11A	Section 11A will be inserted to regularise non-levy or short- levy of GST where tax was short-paid or unpaid due to standard trade practices.
ISD transitional provisions	A retrospective amendment w.e.f. 1 July 2017 proposed to allow transitional credit for invoices pertaining to services provided before the appointed date and where invoices were received by the input service distributor (ISD) before the appointed date.
Common time limit for demand notice and order	•      Introduction of Section 74A to prescribe a common time limit for issuance of demand notices and orders from FY 2024-25 onwards•      The time limit for availing the benefit of reduced penalty is to be increased from 30 to 60 days.
Refund restrictions	The refund benefit would not be available where goods are subject to export duty, irrespective of whether the goods are exported with/without payment of IGST, including SEZsupplies.

Proposed Clarificatory changes

Time limit for availing ITC under RCM	The date of issuance of the self-invoice would be considered for determining the time limit for availing the ITC on supplies received from unregistered suppliers under the reverse charge mechanism (RCM).
Import of services by a related person	A clarification is to be issued, providing the value of supply in case of import of services from a related person, where full input tax credit (ITC) is eligible:•       Case 1: Invoice issuedThe value declared in the invoice would be deemed as open market value (OMV). •       Case 2: Invoice not issuedNIL value may be deemed as OMV for the purpose of GST
Valuation of corporate guarantee arrangements	Rule 28(2) would not be applicable in case of: ·   Export of servicesWhere the recipient of service is eligible for full ITC

53rd GST Council Compliance and functionalities changes

Introduction of FORM GSTR-1A	An optional facility by way of Form GSTR-1A will be introduced to enable taxpayers to amend the details in FORM GSTR-1 for a tax period and/or declare additional information before filing GSTR-3B for the said tax period.
Bio-metric-based Aadhaar authentication	Biometric-based Aadhaar authentication of registered applicants on a pan-India basis will be implemented in a phased manner.
Exemption from filing annual return for small taxpayers	Taxpayers with an aggregate annual turnover of up to 2 crore rupees are to be exempted from filing the annual return in FORM GSTR-9/9A for the financial year 2023- 24.
Reporting of B2C supplies in GSTR-1	The threshold for reporting B2C inter-state supplies invoice-wise in Table 5 of FORM GSTR-1 is to be reduced from INR 2.5 lakh to INR 1 lakh.
Mechanism for adjustment of amount paid towards demand as pre-deposit	A mechanism will be prescribed to adjust an amount paid in respect of demand via GST DRC-03 against the pre- deposit for appeal filing.
Mandatory filing of FORM GSTR-7 by ECO	•      GSTR-7 is to be filed every month by the registered persons who are required to deduct tax at source under Section 51, regardless of whether any tax has been deducted during that month.•      No late fee is applicable for the delayed filing of a nil GSTR-7 return.•      Invoice-wise details are to be furnished in FORM GSTR- 7.
Extension in the filing of GSTR-4	From FY 2024-25 onwards, the due date for filing the GSTR- 4 return for composition taxpayers has been extended from 30 April to 30 June, following the end of the FY.

53rd GST Council Meeting Announces Relief Measures for Businesses

After an eight-month hiatus, the GST Council met and delivered a package of reforms to ease compliance burdens and improve cash flow for businesses. Key measures include:

• GST exemption for hostels
• Relaxation of input tax credit (ITC) rules
• Introduction of GSTR-1A form
• No interest charged on electronic cash ledger balance

These reforms aim to reduce disputes with tax authorities and make GST administration smoother for taxpayers.

Focus on Business Friendliness

The Council’s recommendations pave the way for a business-friendly approach to taxation in the upcoming budget. While discussions on online gaming tax and GST rate changes are postponed until August, the next meeting is expected to tackle these crucial issues, including the potential inclusion of petroleum products under GST.

At Pitchers Global, we are here to guide you to each and every step so that it ensures seamless compliance and strategic growth.

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