GST Council met 30 times, took 918 decisions since its Constitution;

96% of decisions already been implemented through 294 Notifications

28 OCT 2018

Till date, the Goods and Services Tax ( GST ) Council  has taken 918 decisions related to GST laws, rules, rates, compensation and taxation threshold etc. More than 96% of the decisions have already been implemented through 294 Notifications issued by the Central Government and the remaining are under various stages of implementation. Almost equal number of corresponding SGST Notifications have been issued by each State.

The GST Council Members under the Chairpersonship of  the Union Finance Minister have spent long hours discussing the broad contours as well as the nitty gritty of the new GST regime in a harmonious and collaborative spirit. Till now, 30 GST Council Meetings have taken place. Detailed Agenda Notes were prepared before every GST Council Meeting and discussed in the preparatory Officer’s Meeting to enable the Council Members to fully appreciate the issues under consideration. The Detailed Agenda Notes for the 30 GST Council Meetings ran into 4730 pages. The discussions in the GST Council were very detailed, reflecting the collective wisdom of the Council and this has been captured exhaustively in the Minutes of the 30 Council Meetings running into 1394 pages.

The GST Council was constituted on 15th September 2016 under Article 279A of the Constitution. It consists of the Union Finance Minister (Chairperson), Union Minister of State in charge of the Revenue or Finance and the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government. Union Revenue Secretary is the ex-officio Secretary to the GST Council. The working of GST Council has ushered in a New Phase of Cooperative Federalism where the Central and the State Governments work together to take collective decisions on all issues relating to Indirect Tax regime of the country.

PIB

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Recommendations made by the GST Council for the Housing Sector to promote Affordable Housing for the masses come into force;

Concessional Rate of GST of 12% extended to construction of houses constructed/ acquired under the Credit Linked Subsidy Scheme for EWS, LIG, MIG sections

Posted On: 07 FEB 2018 1:45PM by PIB Delhi

In its 25th Meeting held on 18th January, 2018, the GST Council had made several important recommendations for the Housing Sector which have come into force with effect from 25th January, 2018. The recommendations are expected to promote affordable housing for the masses in the country.

One of the important recommendations made is to extend the concessional rate of GST of 12% (effective rate of 8% after deducting one third of the amount charged for the house, flat etc. towards the cost of land or undivided share of land, as the case may be) in housing sector to construction of houses constructed/ acquired under the Credit Linked Subsidy Scheme (CLSS) for Economically Weaker Sections (EWS) / Lower Income Group (LIG) / Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All (Urban) Mission/Pradhan Mantri AwasYojana (Urban).

Credit Linked Subsidy Scheme (CLSS) is one of the components of Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY) (Urban). Under this component, subsidy would be provided on home loans taken by eligible urban poor (EWS/LIG/ MIG-I/ MIG-II) for acquisition and construction of house. Credit linked subsidy would also be available for housing loans availed for new construction and for addition of rooms, kitchen, toilet etc, to existing dwellings as incremental housing. The carpet area of houses constructed under this component of the mission would be up to 30 square meters for EWSA, 60 Square Meters for LIG, 120 sqm for MIG I and 150 Sqm for MIG II. The benefit of Credit Linked Subsidy Scheme may be taken by the Economical Weaker sections or Low/Middle Income Groups for purchase of houses under any project. The maximum annual income for eligibility of beneficiaries under the scheme can be up to Rs.18 lakhs. It covers a very large section of population which aspires to own a home.

So far, houses acquired under CLSS attracted effective GST rate of 18% (effective GST rate of 12% after deducting value of land). The concessional rate of 12% was applicable only on houses constructed under the other three components of the Housing for All (Urban) Mission/Pradhan Mantri AwasYojana (Urban), namely (i) ln-situ redevelopment of existing slums using land as a resource component; (ii) Affordable Housing in partnership and (iii) Beneficiary led individual house construction/enhancement. The exemption has now been recommended for houses acquired under the CLSS component also. Therefore, the buyers would be entitled to interest subsidy under the Scheme as well to a lower concessional rate of GST of 8% (effective rate after deducting value of land).

The GST Council has also recommended that the benefit of concessional rate of GST of 12% (effective GST rate of 8% after deducting value of land) applicable to houses supplied to existing slum dwellers under the in-situ redevelopment of existing slums using land as a resource component of PMAY may be extended to houses purchased by persons other than existing slum dwellers also. This would make the in-situ redevelopment of existing slums using land as a resource component of PMAY more attractive to builders as well as buyers.

The third recommendation of the Council is to include houses constructed for ‘Economically Weaker Section (EWS)’ under the Affordable Housing in partnership (PMAY) under the concessional rate of GST of 8% (effective rate after deducting value of land). This will support construction of houses up to 30 sqm carpet area.

The Fourth Recommendation of the Council is to extend the concessional rate of 12% to services by way of construction of low cost houses up to a carpet area of 60 sqm in a housing project which has been given infrastructure status under notification No. 13/06/2009 dated 30th March, 2009. The said notification of Department of Economic Affairs provides infrastructure status to Affordable Housing.

Affordable Housing has been defined in the said notification as a housing project using at least 50% of the FAR/FSI for dwelling units with carpet area of not more than 60 sqm. The recommendation of the Council would extend the concessional rate of 8% GST (after deducting value of land) to construction of flats/ houses of less than 60 sqm in projects other than the projects covered by any scheme of the Central or State Government also.

In addition to the above, in order to provide a fillip to the housing and construction sector, GST Council has decided to give exemption to leasing of land by Government to Governmental Authority or Government Entity. [Government Entity is defined to mean an authority or board or any other body including a society, trust, corporation, (i) set-up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90% or more participation by way of equity or control, to carry out any function entrusted by the Central Government, State Government, UT or a local authority].

Also, any sale/lease/sub-lease of land as a part of the composite sale of flats has also been exempted from GST. Therefore, in effect, the Government does not levy GST on supply of land whether by way of sale or lease or sub-lease to the buyer of flats and in fact, gives a deduction on account of the value of land included in the value of flats and only the value of flat is subjected to GST.

It may be recalled that all inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land). As a result, the builder or developer will not be required to pay GST on the construction service of flats etc. in cash but would have enough ITC (input tax credits) in his books to pay the output GST, in which case, he should not recover any GST payable on the flats from the buyers. He can recover GST from the buyers of flats only if he recalibrates the cost of the flat after factoring in the full ITC available in the GST regime and reduces the ex-GST price of flats.

The builders/developers are expected to follow the principles laid down under Section 171 of the GST Act scrupulously. The above changes have come into force with effect from 25 January 2018.

PIB

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The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its approval to the proposal of the Finance Ministry to promulgate an ordinance to suitably amend the Goods and Services Tax (Compensation to States) Act, 2017.

The approval would allow to increase the maximum rate at which the Compensation Cess can be levied from 15% to 25% on:

a) motor vehicles for transport of not more than thirteen persons, including the driver [falling under sub-headings 870210, 8702 20, 8702 30 or 8702 90]; and

b) motor vehicles falling under headings 8703.

The GST Council, in its meeting held in August 2017, taking into consideration the fact that post introduction of GST, the total incidence on motor vehicles [GST+ Compensation Cess] has come down vis-a-vis pre-GST total tax, incidence, and had recommended increase in the maximum rate at which Compensation Cess can be levied on motor vehicles falling under headings 8702 and 8703 from 15% to 25%.

The issue regarding the increase in effective rate of Compensation Cess on motor vehicles will be examined by the GST Council in due course.

PIB

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The GST Council considered the issue of cess leviable on motor vehicles in its 20th meeting held on the 5th of August 2017 and recommended that Central Government may move legislative amendments required for increase the maximum ceiling of cess leviable on motor vehicles falling under headings 8702 and 8703 including SUVs, to 25% instead of present 15% . However, the decision on when to raise the actual cess leviable on the same will be taken by the GST Council in due course.

It was noted that after introduction of GST, the total tax incidence on motor vehicles [GST + Compensation Cess] has come down vis-a-vis the total tax incidence in pre-GST regime. The Schedule to the Goods and Service Tax (GST) (Compensation to State) Act 2017, specifies the maximum rate at which Goods and Service Tax Compensation Cess may be collected. In respect of motor vehicles, the maximum rate at which Goods and Service Tax Compensation Cess may be collected is 15%.

PIB

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The all-powerful GST Council today finalised tax rates for services under the Goods and Service Tax (GST) regime, scheduled to kick-infrom July 1.

Healthcare and education would be exempt from GST.

Kerala Finance Minister Thomas Isaac said there will be four rates for services at 5, 12, 18 and 28 per cent, similar to tax slabs for goods.

The tax rate on gold has not been finalised yet, he said, adding that the Council will meet again on June 3.

PTI

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The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all States, at its last meeting approved the final draft of Central GST (C-GST) and Integrated GST (I-GST) laws.

The GST council also agreeing on capping the cess on sin (tobacco products) and luxury goods has been capped at 15 per cent, Jaitley said after the meeting.

“Capping of cess has been done. These are not actual, but, ceiling is kept higher to give a marginal headspace,” he said.

“The supporting GST laws will now be taken to the Cabinet and then to Parliament for approval,” he said.

Jaitley also said the government was hopeful that GST could be “tentatively” implemented from July.

The GST Council would meet on March 31 for framing of rules for Goods and Service Tax regime, Jaitley said, adding that tax rates for various goods and services would be taken up after framing of rules.

After March 31, the Council will take up the exercise of fitment of various commodities in the GST tax slabs – 5 %, 12%, 15%  and 28%, he added.

The officials have already started the fitment process, which will be put up for discussion and approval before the Council.

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Opposing some recent decisions taken by GST Council, various indirect tax officials’ associations today decided to start non-cooperation movement.

To start with, the employees associations will not celebrate international customs day on Friday. Besides, they will observe ‘black day’ by wearing black badges on Martyrs’ Day, i.E. January 30, as per minutes of meeting held among their representatives here.

The associations said that their members are “highly disappointed” and feel “cheated” over the decisions taken by Finance Minister Arun Jaitley-led GST Council in its meeting on January 16.

The Council had agreed to give states the powers to levy tax on economic activity within 12 nautical miles of territorial waters and to administer 90 per cent of the tax payers under Rs 1.5 crore annual turnover.

“We feel that the biggest tax reform of the century should have been in conformity with the principles of responsibility and authority going together and also in conformity with the Constitutional design. We feel that the decision shall weaken the Centre’s ability to ensure its revenues.

“The decision will not only adversely affect the career of revenue officers but it is not in national interest. We oppose the decisions taken by GST Council and requests for deferment and review of above inappropriate and incorrect decisions,” as per the minutes of meeting of steering committee of associations representing Group A, B and C employees of Central Board of Excise and Customs (CBEC).

The decision came after a meeting of representatives of Indian Revenue Service (Customs and Central Excise), All India Association of Central Excise Gazetted Executive Officers, All India Central Excise Inspectors’ Association and All India Central Excise and Service Tax Ministerial Officers Association, comprising 70,000 personnel, here, office bearers said.

According to them, the decision taken by GST Council in its January 16, meeting will not only weaken the Centre but also adversely affect the Indian economy and revenue collection but also national security.

They have decided to request authorities concerned to take immediate necessary action to resolve the issues and to defer the unjustified decision of GST Council taken under pressure of state VAT officers.

“We feel that if the above genuine demands in national and revenue interest are not considered then this disciplined service will be forced to initiate non-cooperation movement following Gandhian methods of Satyagraha,” the associations said.

The Goods and Services Tax (GST) is likely to be rolled out from July 1, as against April 1 decided earlier by the government.

PTI

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New Delhi: The GST Council, which began 2-day deliberations here today, is likely to shortly finalise a 4-tier tax structure with some tinkering of the Centre’s proposal.

The Centre has proposed 4-tier tax structure of 6, 12, 18 and 26 per cent, the peak rate being for FMCG and consumer durables.

According to sources, the Council comprising state finance ministers and headed by Union Finance Minister Arun Jaitley may opt for a lower rate of 5 per cent instead of the proposed 6 per cent.

The members may agree to raise the higher slab to 28 per cent rate from the proposed 26 per cent.

They may retain the 12 per cent and 18 per cent rate for certain categories under the Goods and Services Tax regime.

Sources also said that certain states are in favour of 40 per cent tax rate on tobacco.

The meeting will have to sort out the issues concerning tax rate to enable Parliament to approve the Central GST (CGST) and Integrated GST (IGST) legislations in the Winter Session beginning November 16 and pave the way for rollout of the new indirect tax regime from April 1 next year.

A state finance minister said “mood in the meeting is very good” and the Council is expected to seal the rate structure by evening.

On the issue of dual control or cross empowerment, another state minister said that there would be a generic line in the CGST Bill regarding jurisdiction of centre and states on taxes. The final touches would be given by GST Council.

As per the slab proposed the Centre, the items which are currently taxed between 3-9 per cent would fall in the 6 per cent bracket; those in 9-15 per cent range would come under 12 per cent rate.

Those products which are currently taxed between 15-21 per cent would attract 18 per cent levy while those above 21 per cent would be taxed at the peak rate of 26 per cent.

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The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has approved setting up of GST Council and setting up its Secretariat as per the following details:

(a) Creation of the GST Council as per Article 279A of the amended Constitution;

(b) Creation of the GST Council Secretariat, with its office at New Delhi;

(c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;

(d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;

(e) Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).

The Cabinet also decided to provide for adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments.
The steps required in the direction of implementation of GST are being taken ahead of the schedule so far.

The Finance Minister has also decided to call the first meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi.

Background:

The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016.

As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: –

a) Union Finance Minister – Chairperson
b) The Union Minister of State,
in-charge of Revenue of finance – Member
c) The Minister In-charge of finance or
taxation or any other Minister nominated
by each State Government – Members

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

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PIB

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