Analysis of

Recommendations made in
49th GST Council
Meeting
By Taxmann’s Research and Advisory

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 Contents
1. Necessary amendments related to GST Tribunal to be incorporated 3
in Finance Bill, 2023
2. No Capacity based levy on commodities like pan masala, gutkha, 4
chewing tobacco
3. GST Rates on ‘Rab’ and ‘Pencil Sharpners’ to be reduced 5

3.1. Applicable GST rates on ‘Rab’ is proposed to be reduced from 18% 5

to 5% or Nil
3.2. Applicable GST rates on ‘Pencil sharpeners’ are proposed to be 5
reduced from 18% to 12%
4. Exemption from customs duty provided to durable container to be 6
extended to tag tracking device
5. Extending exemption benefit to coal rejects supplied to a coal 6
washery
6. Exemption for conduct of entrance examination by any authority, 7
board or a body setup by Government
7. RCM to be applied on the services of renting by Courts and Tribunals 8

8. Recommendation to increase time limits for revocation of 9

cancellation of GST registration
9. Increase time period for filing of return for enabling deemed 10
withdrawal of best judgment assessment order
10. Rationalization of late fee for annual return for taxpayers having 11
turnover of upto Rs. 20 Crores from FY 2022-23 onwards
11. Amnesty by way of waiver/reduction of late fee for pending Form 12
GSTR-4, GSTR-9 and GSTR-10
12. Rationalization of provision of place of supply of services of 12
transportation of goods

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 1. Necessary amendments related to
GST Tribunal to be incorporated in
Finance Bill, 2023

• The GST Council adopted the report of Group of Ministers on GSTAT with certain
modifications. The final draft amendments to the GST laws would be circulated
to the Members for their comments. The Chairperson has been authorised to
finalise the same.

• The Finance Minister also confirmed that the amendments will be introduced
through the Finance Bill, 2023.

TAXMANN’s Comments:

The GST Appellate Tribunal (‘GSTAT’) is the forum of second appeals in GST law
and first common forum of dispute resolution between Centre and States. The
appeals against the orders in first appeals issued by the First Appellate Authority
or Revisional Authority under the Centre and State GST Acts would lie before the
GSTAT, which is common under the Central as well as State GST Acts. Since the
inception of the GST law in India, the GST Tribunal has not been set up. In the
absence of the said GSTAT, the aggrieved taxpayers have been left remediless
except in few situations wherein they can exercise their right to file the Writ Pe-
titions under Article 226 of the Constitution of India which is also a costly affair.
As a consequence, plethora of cases have been landed before the various High
Courts in India and the Supreme Court, increasing the burden on the judiciary.

The existing provisions pertaining to the constitution of the GST Appellate Tribu-
nal have been challenged before the High Courts. Currently, the GST law provides
that each bench of the Tribunal should be composed of one Judicial Member,
one Technical Member (Centre) and one Technical Member (State). However, the
Hon’ble Madras High Court has struck down1 the said provision due to the rea-
son that the number of technical members cannot exceed the number of judicial
members on the bench.

Accordingly, a GoM on GSTAT was formed to recommend and submit its report
to ensure that the legal provisions maintain the right federal balance, are in line
with the overall objective of uniform taxation within the country and are in line
with the principles outlined in the judgments of the Courts. After the materially
rich discussion in the meeting on the given issue, it has been recommended that
the Tribunals should consist of two judicial members, and one technical member
each from the Centre and States. This would ensure to give equal representation
of State as far as technical member is concerned. However, all the four members
would not sit for every decision. The said number of members in a bench would
be involved depending upon the complexity of the issue.

1 Revenue Bar Association v. Union of India [2019] 109 taxmann.com 375 (Madras)

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 Further, in order to simplify and make the GST Tribunal more effective, it has been
recommended to have a single Tribunal with its primary or principal bench in New
Delhi and the benches of this Tribunal would be set up in every State depending upon
the density in each state or because of far flung areas or any other justification. The
move will ensure that no interest of the State will suffer both in terms of reference
to the representation and also in reference to the number of benches States would
want.
Given the above, the GST Council has confirmed that they have adopted the report of
Group of Ministers on GST Appellate Tribunal with certain modifications. It is expect-
ed that the respective amendments would be incorporated in the Finance Bill, 2023
in the upcoming session.

2. No Capacity based levy on commodities

like pan masala, gutkha, chewing
tobacco

• GST Council has approved the recommendations of the GoM on Capacity Based Tax-
ation and Special Composition Scheme for certain sectors wherein it has been decid-
ed that capacity-based levy would not be prescribed on panmasala, gutkha, chewing
tobacco, etc., but compliance and tracking measures shall be taken to plug leakages/
evasions.

• Moreover, exports of such commodities shall be allowed only against LUT with con-
sequential refund of accumulated ITC.

• Also, compensation cess levied on such commodities shall be changed from ad valor-
em to specific tax based levy to boost the first stage collection of the revenue.

TAXMANN’s Comments:

A Group of Minister (GoM) was formed for examining the possibility of levy of GST
based on the capacity of manufacturing unit like pan masala, gutkha, etc. and special
composition schemes in certain evasion prone sectors like brick kilns, sand mining,
stone crushers, etc. with reference to current legal provisions as well as to examine
any other administrative or systemic mechanism to plug leakages in these sectors as
revenue in GST regime from these sectors have gone significantly down as compared
to revenue yields during pre-GST era. There seems to be greater revenue leakages at
the later stages of the supply chain of such commodities, and since most of the end
retailers are small and below the threshold limit for mandatory GST registration, it is
difficult to trace them. Now, the GST Council has approved the report of GoM chaired
by Odisha’s Finance Minister which provided that the capacity based levy would not
be prescribed on pan masala, gutkha, chewing tobacco, hookah, chilam, etc. It is note-
worthy that as per current legal framework of GST, GST is a tax on the supply of goods
and services unlike the Central Excise which was on production.

However, in order to plug the GST leakage in these products, several measures would
be taken and various compliances shall be introduced such as registration of ma-
chines, monthly returns with details of machines, inputs, output quantity, mandatory
e-invoicing or e-way bill, etc.

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 In the report, it is suggested that export of these commodities would be allowed only
against a letter of undertaking with consequential refund of accumulated ITC.

It is also decided that compensation cess on these commodities shall be changed

from ad valorem to specific tax based levy. Since there were leakages at the later
stages of supply chain, shift from ad valorem to specific tax-based levies will boost
the first-stage (manufacturer level) collection of the revenue. Such a specific tax shall
be linked to the retail sale price (RSP) to maintain revenue buoyancy. Such measures
including levy of specific tax will help in eliminating the cases of under-invoicing as
well as clandestine removal of goods to a large extent. It is worthwhile to note that
currently, GST on tobacco and pan masala is 28% and compensation cess at the top
of it is 290% and 135% respectively.

3. GST Rates on ‘Rab’ and ‘Pencil

Sharpners’ to be reduced

3.1. Applicable GST rates on ‘Rab’ is proposed to be reduced from 18% to 5% or Nil

• The GST rate on Rab is proposed to be reduced. The current rate on Rab is 18%.
However, the same is proposed to be reduced to 5% where it is pre-packaged and
labelled and Nil in other cases.

TAXMANN’s Comments:

Under the GST law, molasses is taxable at the rate of 28%. The GST Council in its 48th
GST Council meeting highlighted that one State GST authority issued the show cause
notices to the rab producers and wanted to treat rab as molasses.

Further, while analyzing the levy of Agricultural produce-levy, the Hon’ble Supreme
Court in the case of Krishi Utpadan Mandi Samiti vs. M/s Shankar Industries and Ors.
held2 that Rab is different from molasses.
In this regard, the CBIC clarified by issuance of a circular3 that the applicable tax rate
on rab is 18% as the same is covered under HSN code 1702.

The GST Council has now recommended a reduction in the rate of rab considering it a
liquid form of jaggery. It has been recommended that 5% GST to be levied where it is
in pre-packaged and labelled form and the rate should be Nil in other cases.

It has also been recommended that the GST treatment for past periods on rab is to be
done on ‘as is basis’. It means that the GST will be paid based on the current understand-
ing of the classification and applicable rate, without any adjustments for the past period.
This has been recommended in order to avoid litigation and complications.

3.2. Applicable GST rates on ‘Pencil sharpeners’ are proposed to be reduced from
18% to 12%

• The GST rate on Pencil Sharpeners is proposed to be reduced from 18% to 12%

2 1993 SCR (1) 1037

3 Circular No. 189/01/2023-GST, Dated 13-1-2023

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 TAXMANN’s Comments:

Applicable GST rate on pencil is 12%. However, the GST rate on pencil sharpeners is
18% and is covered under Chapter 82 of the Tariff Act. It is worthwhile to note that
GST Council in its 47th meeting has given the approval for increase in rate of GST on
pencil sharpeners from 12% to 18% for the correction of inverted duty structure.
The Council has recommended that the GST rate on pencil sharpeners should be
reduced from 18% to 12%.

4. Exemption from customs duty provided

to durable container to be extended to
tag tracking device

• It is recommended to suitably amend Notification No. 104/94-Customs dated 16-03-

1994 so that if a device like tag-tracking device or data logger is already affixed on a
container, no separate IGST shall be levied on such affixed device and the ‘nil’ IGST
treatment available for the containers under Notification No. 104/94-Customs shall
also be available to the such affixed device subject to the existing conditions.

TAXMANN’s Comments:

The durable containers that are being imported into India has been exempted from
the levy of the following duties:

(a) Whole of the Customs Duty as levied under First Schedule of the Customs Tariff Act

(b) Whole of the additional duty as leviable under Section 3 of the Customs Tariff Act

The said containers have been provided the exemption as they are returned after
being emptied. However, the tag-tracking device or data logger may also have been
affixed on the containers. It has been recommended by the GST Council that the
exemption available to the durable containers through Notification No. 104/94-Cus-
toms dated 16-03-1994 should also be extended to tag-tracking devices or data log-
ger affixed on the containers.

This exemption, once notified, would extend the exemption and ease the compliance
as the tag-tracking device or data logger would not require a separate treatment.

5. Extending exemption benefit to coal

rejects supplied to a coal washery

• The GST Council has recommended to extend the exemption benefit to both coal
rejects supplied to and by a coal washery, arising out of coal on which compensation
cess has been paid and no input tax credit thereof has been availed by any person.

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 TAXMANN’s Comments

The GST law levies4 compensation cess at the rate of Rs. 400 per tonne on coal. Where-
as, exemption5 from compensation cess is available on the supply of coal rejects aris-
ing out of coal by a coal washery, subject to the following conditions:

(a) Compensation cess has been paid on coal and

(b) Input tax credit thereof has not been availed by any person

During the coal mining and coal processing, coal impurities are separated from the
coal and such coal impurities are the by-products of the coal processing, which are
also referred to as coal rejects. Generally, the power plants procure the raw coal and
pay the compensation cess on such inward supply. The raw coal is then sent for job
work to the coal washeries. The washed coal is sent back to the power plants, where-
as, the coal rejects being the by-products are sold by the coal washeries directly or
is disposed off in an environment friendly manner. Notably, the power plants raise
invoices to the coal washeries in respect of the supply of coal rejects and charge com-
pensation cess on the same.

Earlier, by way of recommendation in its 28th Meeting, the GST Council extended the
benefit of exemption on the supplies made directly by the coal washery6. Notably, the
above exemption covered the scenarios where the supply of coal rejects was made by
coal washeries but not the supplies made to the coal washeries. Due to this amend-
ment, burden of tax still remained on the coal washeries.

Now, the GST Council in its 49th Meeting has extended this exemption on the supplies
made to the coal washeries also. By this amendment, the coal washeries would com-
pletely be relaxed from the ambit of compensation cess liability as far as the supplies
of coal rejects are concerned. However, now the burden of compensation cess would
remain with the power plants.

6. Exemption for conduct of entrance

examination by any authority, board or
a body setup by Government

• Recommendation has been made to extend the exemption available to educational

institutions and Central and State educational boards for conduct of entrance exam-
ination to any authority, board or a body setup by the Central Government or State
Government including National Testing Agency for conduct of entrance examination
for admission to educational institutions.

TAXMANN’s Comments:

Currently, the exemption notification provides7 exemption to all educational institu-

tions on services relating to admission to, or conduct of examination by such institu-
tion. This exemption is specifically available to educational institutions. However, vide
Explanation to the exemption notification it has been provided that the Central and
State Educational Boards shall be treated as Educational Institution for the limited

4 Sl. No. 39 of Notification No. 1/2017-Compensation Cess (Rate), Dated 28-6-2017

5 Sl. No. 41A of Notification No. 1/2017-Compensation Cess (Rate), Dated 28-6-2017
6 Volume-I of Agenda for 28th GST Council Meeting
7 Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 purpose of providing services by way of conduct of examination to the students. But
any other institution or organisation or board would not be allowed to take benefit of
this exemption.

Further, it is worthwhile to note that CBIC vide Circular No. 151/07/2021-GST, dated
17-6-2021 has clarified that GST is exempt on services provided by Central or State
Boards (including the boards such as National Board of Examination (NBE) by way of
conduct of examination for the students, including conduct of entrance examination
for admission to educational institution. GST is also exempt on input services relat-
ing to admission to, or conduct of examination, such as online testing service, result
publication, printing of notification for examination, admit card and questions papers
etc., when provided by NBE to such Boards.

Now, the GST Council has recommended to extend this exemption to any authority,
board or a body setup by the Central Government or State Government including
National Testing Agency for conduct of entrance examination for admission to educa-
tional institutions. This exemption has been extended specifically for National Testing
Agency (NTA) which has been established as a premier, specialist, autonomous and
self-sustained testing organization to conduct entrance examinations for admission/
fellowship in higher educational institutions.

7. RCM to be applied on the services of

renting by Courts and Tribunals

• It has been proposed to extend the dispensation available to Central Government,

State Governments, Parliament and State Legislatures with regard to payment of
GST under reverse charge mechanism (RCM) to the Courts and Tribunals also in re-
spect of taxable services supplied by them such as renting of premises to telecom-
munication companies for installation of towers, renting of chamber to lawyers etc.

TAXMANN’s Comments:

Currently, Reverse Charge is applicable8 on the services supplied by the Central Gov-
ernment, State Government, Union territory or local authority by way of renting of
immovable property to a registered person under the GST law.

Further, services, other than the specified services such as renting of immovable
property, supplied by the Central Government, State Government, Union territory or
local authority to a business entity are also liable9 to reverse charge.
The GST Council has now recommended that the applicability of RCM on supplies
by Government and Local Authorities should also be extended to Courts and Tribu-
nals. It is further provided that services like renting of premises to telecommunication
companies for installation of towers, renting of chamber to lawyers etc. are to be cov-
ered within its scope. Hence, it would be interesting to see whether RCM would also
be applicable on the services of renting of immovable property provided by Courts
and Tribunal in case where the recipient is a person other than business entities.

8 Sl. No. 5A of Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017

9 Sl. No. 5 of Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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8. Recommendation to increase time
limits for revocation of cancellation of
GST registration

• The GST Council has recommended to increase the time limit for making an applica-
tion for revocation of cancellation of GST registration from 30 days to 90 days.

• It has also been recommended that the above time limits may be extended by the
Commissioner/officer for further period of not exceeding 180 days.

• Amnesty may be provided for the past cases where registration has been cancelled
for non-filing of returns and application for revocation of cancellation of registration
could not be filed within time limits.

TAXMANN’s Comments

The existing provisions under the GST law provides10 that the application for revoca-
tion of cancellation of registration can be applied within 30 days from the date of the
service of the order of the cancellation of registration.

The time limit for applying for revocation of cancellation of registration can be ex-
tended11 on sufficient cause being shown by the applicant. This extension of time-lim-
it can be provided by the relevant authorities in the following manner:

(a) The Additional or Joint Commissioner, as the case may be, for a period not exceeding
30 days

(b) The Commissioner, for a further period not exceeding 30 days, beyond the period of
30 days as per clause (a) above

In other words, currently, the time limit of 30 days may first be extended by the Ad-
ditional/Joint Commissioner by a period of 30 days. This extended period of 60 days
(i.e. 30 + 30) may further be extended by the Commissioner by a further period of
30 days. Therefore, the time limit for filing an application for revocation of cancelled
registration may be extended maximum upto 90 days.

As a part of trade facilitation measures, the GST Council has recommended to amend
the current provisions and allow filing of application for revocation of cancellation
within 90 days instead of existing time limit of 30 days. The Council has also recom-
mended that the above time limit of 90 days may be extended by the Commissioner
to a further period of not exceeding 180 days.

Another recommendation is to provide an amnesty for the past cases where registra-
tion has been cancelled on account of non-filing of the returns but the application for
revocation could not be filed within the time limits. In this regard, it is recommended
to allow such persons to file the application for revocation by a specified date, subject
to certain conditions. Notably, the Council has not yet clarified that what conditions
would be applicable in such cases.

10 Section 30(1) of the CGST Act read with Rule 23(1) of the CGST Rules
11 Proviso to Section 30(1) of the CGST Act effective from 01-01-2021

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 The Hon’ble High Courts in arious cases12 have directed the department to reconsider
the application for revocation of cancellation of registration subject to payment of
outstanding interest, penalties and other dues. Notably, most of these cases per-
tained to the Covid-19 pandemic period. The GST Council seems to follow the same
line and has recommended to provide amnesty for the past periods.

9. Increase time period for filing of return

for enabling deemed withdrawal of best
judgment assessment order

• Recommendation has been made to amend Section 62 so as to increase the time

period for filing of return for enabling deemed withdrawal of best judgment assess-
ment order, from the present 30 days to 60 days, extendable by another 60 days,
subject to certain conditions.

• Also, an amnesty scheme would be introduced for conditional deemed withdrawal

of assessment orders in past cases where the concerned return could not be filed
within 30 days of the assessment order but has been filed along with due interest
and late fee up to a specified date.

TAXMANN’s Comments:

There can be cases where a person is registered under the GST laws but he is not
filing any return in respect of its registration. In such cases, the Department issues a
notice to such person in Form GSTR 3A requiring him to furnish such return within a
period of 15 days. If the said return is still not filed by the defaulter within 15 days of
the said notice then the law provides powers to the department to assess based on
the best judgement assessment under Section 62 in Form GST ASMT-13. However,
if the defaulter furnishes a ‘valid return’ within 30 days of the service of assessment
order in Form GST ASMT-13, then the said assessment order shall be deemed to have
been withdrawn.

Now, the GST Council has recommended to increase the time period for filing of re-
turn from the present 30 days to 60 days for enabling deemed withdrawal of such
best judgment assessment order. Moreover, this period can be further extended by
another 60 days, subject to certain conditions which are yet to be prescribed.

Moreover, the Council has also recommended to introduce an amnesty scheme for
conditional deemed withdrawal of assessment orders in past cases where the con-
cerned return could not be filed within 30 days of the assessment order but has been
filed along with due interest and late fee up to a specified date. This scheme would be
available irrespective of whether appeal has been filed or not against the assessment
order, or whether the said appeal has been decided or not. This would be a huge re-
lief for taxpayers who failed to file returns in time and adverse demand orders were
issued against them and shall reduce burden from Appellate Authorities as well.

12 Smt. Shailaja Chandrashekar v. Additional Commissioner of Central Tax (Appeals) [2022] 145 taxmann.com 563 (Karnata-
ka), Mayflower Hotels and Resorts LLP v. Principal Commissioner of State Goods and Service Tax [2022] 145 taxmann.com 2
(Gauhati), San Traders v. Joint Commissioner (Appeals) [2022] 145 taxmann.com 423 (Madras) and Tvl. Suguna Cutpiece Center
v. Appellate Deputy Commissioner (ST) (GST) [2022] 135 taxmann.com 234 (Madras)

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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 10. Rationalization of late fee for annual
return for taxpayers having turnover
of upto Rs. 20 Crores from FY 2022-23
onwards

• In the case of delayed filing of return in Form GSTR-9, the GST law provides13 that
the late fee of Rs. 200 per day (i.e. Rs 100 CGST and Rs 100 SGST) would be payable
subject to a maximum of 0.5% (i.e. 0.25% CGST and 0.25% SGST) of the turnover for
the relevant Financial Year (‘FY’) in the State or Union Territory. The GST Council has
recommended to rationalize the late fee for the taxpayers having a turnover of upto
Rs. 20 Crores. However, the reduced late fee is applicable for FY 2022-23 onwards.

TAXMANN’s Comments:
The registered persons having aggregate annual turnover exceeding Rs. 2 Crores in
a FY are required to file an annual return in Form GSTR-9 under GST. The due date of
the same, as provided14 in the GST law, is 31st December of the FY following the rel-
evant FY which may be extended by the Government. The filing of the return beyond
the due date attracts a late fee of Rs. 200 per day (i.e. Rs. 100 CGST and Rs. 100 SGST)
subject to a maximum of 0.5% (i.e. 0.25% CGST and 0.25% SGST) of the turnover for
the relevant FY in the State or Union Territory.
Hence, the GST Council has recommended that the late fee for taxpayers is to be
reduced. This has been done to provide relief to the MSME sector. However, the said
rationalization of the late fee is applicable from the FY 2022-23 onwards.
The applicable late fee for all the FYs under GST is summarized in the table below
where the annual return is filed beyond the due date.
Financial Due Date Turnover of the relevant FY
Year Turnover of upto 5 Turnover exceeding Turnover exceed-
Cr. 5 Cr. upto 20 Cr. ing 20Cr.
2017-18 5-2-2020 and Rs. 200 per day (i.e. Rs 100 CGST and Rs 100 SGST) subject to
7-2-2020 a maximum of 0.5% (i.e. 0.25% CGST and 0.25% SGST) of the
turnover for the relevant FY in the State or Union Territory
2018-19 31-12-2020
2019-20 31-03-2021
2020-21 28-02-2022
2021-22 31-12-2022
2022-23 31-12-2023 (as Rs. 50 per day (i.e. Rs Rs. 100 per day (i.e. Rs. 200 per day
of now) 25 CGST and Rs 25 Rs 50 CGST and Rs (i.e. Rs 100 CGST
SGST) subject to a 50 SGST) subject and Rs 100 SGST)
maximum of 0.04% to a maximum of subject to a max-
(i.e. 0.02% CGST and 0.04% (i.e. 0.02% imum of 0.5% (i.e.
0.02% SGST) of the CGST and 0.02% 0.25% CGST and
turnover for the rel- SGST) of the turn- 0.25% SGST) of
evant FY in the State over for the rele- the turnover for
or Union Territory vant FY in the State the relevant FY in
or Union Territory the State or Union
Territory

The said relaxation in late fee for Form GSTR-9 has been recommended with an idea
of providing relief to small taxpayers.

13 Section 47 of the CGST Act

14 Section 44 of the CGST Act

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

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11. Amnesty by way of waiver/reduction of
late fee for pending Form GSTR-4, GSTR-9
and GSTR-10

• To provide relief to a large number of taxpayers, the Council recommended amnes-

ty schemes in respect of pending returns in Form GSTR-4, Form GSTR-9 and Form
GSTR-10 by way of conditional waiver/ reduction of late fee.

TAXMANN’s Comments:

Where various returns and statements that are required to be filed under the GST law
are not filed within the specified due date, the taxpayer is required to pay a late fee
where such a return/statement is filed belatedly. The Council has recommended to
come up with an amnesty scheme for late filing of Form GSTR-4, GSTR-9 and GSTR-10.
Notable, Form GSTR-4 is to be filed by the composition dealer, GSTR-9 is the annual
return and Form GSTR-10 is the final return.

Such amnesty may contain a conditional waiver of late fee or reduction in late fee.
This would focus on providing relief to a large number of taxpayers.

Notably, in the Finance Bill 2023, it has been proposed that the filing of return under
GST is to be restricted to a maximum time of 3 years from the due date of filing of
such return. Hence, the said recommendation, if notified would restrict many returns
under GST from being filed. Hence, this amnesty would be a last chance to file the
pending composition dealer’s returns, annual return, and final return that too at a
reduced/ no late fee.

12. Rationalization of provision of place of

supply of services of transportation of
goods

• Recommendation has been made to rationalize the provision of place of supply for
services of transportation of goods by deletion of section 13(9) of IGST Act, 2017 so
as to provide that the place of supply of services of transportation of goods, in cases
where location of supplier of services or location of recipient of services is outside
India, shall be the location of the recipient of services.

TAXMANN’s Comments:

Currently, the GST law15 provides that the place of supply of services of transportation
of goods, in cases where location of supplier of services or location of recipient of
services is outside India, shall be the place of destination of such goods.

15 Section 13(9) of IGST Act, 2017

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

12
 Now, it has been recommended to delete this provision and therefore the place of
supply shall be determined as per residuary provision16 and it will be the location of
the recipient of services.

Notably, the Finance Bill, 2023 also proposed an amendment in Section 12 of the IGST
Act, wherein it is proposed to delete the proviso to Section 12(8). Proviso to Section
12(8) currently provides that in case where the supplier of transportation services of
goods is located in India and supplying goods to outside India for a recipient who is
also located in India, the place of supply is destination where the goods are transport-
ed.

The impact of the above two proposals is summarized in the table below:

Sl. Nature of Suppli- Recip- Suppli- Recip- As per As per Com-

No. contract er of ient of er of ient of Existing new pro- ments
goods goods Services services provi- posal
sions
CIF - India Outside Outside India Section 13(2) i.e. Reverse
1 Export India India 13(9) i.e. location of Charge.
through Destina- recipient - (Refer
Foreign tion of In India Note 1)
Shipping goods -
company Outside
India
2 CIF - India Outside India India Proviso 12(8) i.e Forward
Export India to Sec- location of charge
through tion 12(8) recipient - (Refer
Indian i.e. Des- In India Note 1)
shipping tination
Company of goods
- Outside
India
3 CIF/FOB - India India India India 12(8) i.e 12(8) i.e Forward
Domestic location location of charge
transac- of recip- recipient -
tion ient - In In India
India
4 FOB - India Outside Outside Outside No levy No levy of No levy
Export India India India of GST GST of GST
through
Foreign
Shipping
company
5 FOB - India Outside India Outside 13(9) i.e. 13(2) i.e Forward
Export India India Destina- location of charge/
through tion of recipient LUT Ex-
Indian goods - - Outside port of
shipping Outside India services
Company India (Subject
to other
condi-
tions)

16 Section 13(2) of IGST Act, 2017

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13
 6 CIF - Outside India Outside India 13(9) i.e. 13(2) i.e Refer to
Import India India (As per Destina- location of Note 3
through Mohit tion of recipient
Foreign Miner- goods -
Shipping als17 - India
company Refer to
Note 2)
7 CIF - Outside India India India 12(8) i.e. 12(8) i.e.
Import India (As per Loca- Location
through Mohit tion of of Recipi-
Indian Miner- Recipient ent - India
Shipping als18 - – India
company Refer to
Note 2)
8 FOB - Outside India Outside India 13(9) i.e. 13(2) i.e Reverse
I m p o r t India India Destina- location of Charge
through tion of recipient -
Foreign goods - India
Shipping India
company
9 FOB - Outside India India India Proviso 12(8) i.e Forward
I m p o r t India to 12(8) location of charge
through i.e. Desti- recipient -
Indian nation of In India
shipping goods -
Company India
Note 1: The move will bring a parity between the Indian Shipping Lines and Foreign Shipping
Lines.

Note 2: The recipient of services has been treated as importer on the basis of Mohit Miner-
als decision19.
Note 3: In the above decision, the Supreme Court while concluding relied on the provisions
of Section 13(9) and concluded that the importer will be the recipient (i.e. ultimate beneficia-
ry of CIF Contract). Since the GST Council has recommended to delete provisions of Section
13(9), it will be interesting to see how it would impact the decision of Supreme Court and
impact the location of the recipient.

17 [2022] 138 taxmann.com 331 (SC)

18 [2022] 138 taxmann.com 331 (SC)
19 [2022] 138 taxmann.com 331 (SC)

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

14
 Our
Associations

Income-tax Department Indian Institute

of Banking & Finance

Income-tax National Institute

Appellate Tribunal of Securities Markets -
An Education Initiative of SEBI

ANALYSIS OF RECOMMENDATIONS MADE IN 49TH GST COUNCIL MEETING

15
ABOUT TAXMANN About TAXMANN
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