32nd GST Council Meeting – Key Takeaways

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32nd GST Council Meeting took decision with respect to GST turnover limit – Rs 40 lakhs (from Rs. 20 lakhs) and composition scheme limit raised to Rs. 1.5 crore – changes would be effective from 1st April 2019. The Government took steps provide compliance relief to small businesses.

Outcome of 32nd GST Council Meeting -The highlights of the reliefs announced by FM Arun Jaitley are as below:

1. Threshold limit for GST Registration increased to 40 Lakhs
Effective April 1, the GST exemption threshold has been raised from Rs 20 lakh to Rs 40 lakh. For hilly states and those in the North East, the threshold has been doubled to Rs 20 lakh.

Earlier in a press talk AP FM said increased to 50lakhs, but it is increased to 40lakhs only as said by FM

2. Power to states
Now states will be able to choose if they want to keep the GST exemption limit at Rs 20 lakh or Rs 40 lakh, Jaitley said.

3. Composition limit increased to 1.5Cr from the present 1 Cr

The existing Composition Scheme turnover threshold raised to Rs 1.5 crore.

GST turnover limit and composition scheme changes would be effective from 1st April 2019.

4 Quarterly payment and Annual Return
Now Composition tax payers will pay tax quarterly, but file returns annually.

5 New Composition scheme for Services providers
Those providing services or mixed supplies (goods and services) with a turnover up to Rs 50 lakhs will now be entitled to avail composition scheme.

6 Rate for services under comp scheme @ 6%
Compounding rate for services under composition scheme is fixed at 6 percent.

7 Real Estate
A committee has been set up to consider real estate GST rates, a consensus is yet to be achieved, says FM Arun Jaitley.

8 Consensus for Calamity cess in Kerela @1%
GST Council has given approval to  Kerala to levy Disaster / Calamity cess of 1%  on all intra-state supplies of goods and services within Kerala, for up to 2 years.

GST Council slashes Rate on Certain Services

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GST Council in the 31-meeting held on 22 December, 2018 at New Delhi took following decisions relating to changes in GST rates on goods and services. The decisions of the GST Council have been presented in this note for easy understanding. The same would be given effect to through Gazette notifications/ circulars which shall have force of law.

GST rate reduction on goods which were attracting GST rate of 28%:

28% to 18%

Pulleys, transmission shafts and cranks, gear boxes etc., falling under HS Code 8483

Monitors and TVs of upto screen size of 32 inches

Re-treaded or used pneumatic tyres of rubber;

Power banks of lithium ion batteries. Lithium ion batteries are already at 18%. This will bring parity in

GST rate of power bank and lithium ion battery.

Digital cameras and video camera recorders

Video game consoles and other games and sports requisites falling under HS code 9504.

 28% to 5%

Parts and accessories for the carriages for disabled persons

GST rate reduction on other goods –

18% to 12%

Cork roughly squared or debagged

Articles of natural cork

Agglomerated cork

18% to 5%

Marble rubble

12% to 5%

Natural cork

Walking Stick

Fly ash Blocks

12% to Nil

Music Books

5% to Nil

Vegetables, (uncooked or cooked by steaming or boiling in water), frozen, branded and put in a unit container

Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption.

III. GST on solar power generating plant and other renewable energy plants

GST rate of 5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.

Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.

To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

 Reduction in GST rates/exemptions on services:

GST rate on cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%.

GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18% to 12%

Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.

Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services).

Source: GST Rate reductions made during 31st Meeting of the GST Council