Table agenda - Proposal to withdraw amendment to Section 16(2) of the CGST Act, 2017 - 29th GSTCM

Confidential





Agenda for
29th GST Council Meeting
Volume – 1

04 August 2018


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File No: 484/29th GSTCM/GSTC/2018
GST Council Secretariat

Room No.275, North Block, New Delhi
Dated: 27 July 2018


Notice for 29th Meeting of the GST Council on 04 August 2018
The undersigned is directed to refer to the subject cited above and to say that the 29th
Meeting of the GST Council will be held on Saturday, 4 August 2018 from 11:00 am onwards
at Hall No 2-3, Vigyan Bhawan, New Delhi. The Meeting is convened to discuss mainly the
issues, concerns and suggestions of the Micro, Small & Medium Enterprises (MSME) in the
GST regime and any other agenda with the permission of the Chairperson of the Council.
2. The Detailed Agenda Note, if any, will be sent separately in due course of time.
3. All State Governments and CBIC are requested to send their suggestions or concrete
action points for this single agenda item to Member (GST), CBIC / GST Council before 29th
July, 2018, as discussed in the 28th GST Council Meeting.
4. Please convey the invitation to the Hon’ble Members of the GST Council to attend the
meeting.

(-Sd-)
(Dr. Hasmukh Adhia)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653


Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request
to brief Hon’ble Minister about the above said meeting.
2. PS to Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the
request to brief Hon’ble Minister about the above said meeting.
3. The Chief Secretaries of all the State Governments, Delhi and Puducherry with the request to intimate
the Minister in charge of Finance/Taxation or any other Minister nominated by the State Government
as a Member of the GST Council about the above said meeting.
4. Chairperson, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the
Council.
5. Chairman, GST Network
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Agenda Items for the 29th Meeting of the GST Council on 04 August 2018
1. Confirmation of the Minutes of 28th GST Council Meeting held on 21st July, 2018
2. Discussion to address issues and concerns of Micro, Small & Medium Enterprises
(MSME) in GST regime
3. Incentivising Digital Payments in GST Regime
4. Any other agenda item with the permission of the Chairperson
5. Date of the next meeting of the GST Council
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TABLE OF CONTENTS
Agenda No. Agenda Item Page No.
1
Confirmation of the Minutes of 28th GST Council Meeting held on 21st July,
2018
6

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Discussion on Agenda Items
Agenda Item 1: Confirmation of the Minutes of 27th GST Council Meeting on held 21st July 2018
Draft Minutes of the 28th GST Council Meeting held on 21 July, 2018
The twenty-eighth Meeting of the GST Council (hereinafter referred to as ‘the Council’) was
held on 21 July 2018 at Vigyan Bhawan, New Delhi under the Chairpersonship of the Hon’ble Union
Finance Minister, Shri Piyush Goyal (hereinafter referred to as the Chairperson). A list of the Hon’ble
Members of the Council who attended the meeting is at Annexure 1. A list of officers of the Centre, the
States, the GST Council and the Goods and Services Tax Network (GSTN) who attended the meeting
is at Annexure 2.
2. The following agenda items were listed for discussion in the 28th Meeting of the Council:
1. Confirmation of the Minutes of 27th GST Council Meeting held on 4 May, 2018
2. Deemed ratification by the GST Council of Notifications, Circulars and Orders issued by the
Central Government
3. Decisions of the GST Implementation Committee (GIC) for information of the Council
4. Decisions/recommendations of IT Grievance Redressal Committee for information of the
Council
5. Review of Revenue Position
6. Issues recommended by the Law Committee for consideration of the GST Council
i. Proposals for amendments in the CGST Act, 2017, IGST Act, 2017, UTGST Act, 2017
and GST (Compensation to States) Act, 2017
ii. Creation of GST Appellate Tribunal (GSTAT)
iii. Simplification of GST Returns
7. Issues recommended by the Fitment Committee for consideration of the GST Council
8. Reports/recommendations of different Committees/Group of Ministers (GoMs) for
information/approval of the Council:
i. Recommendations of the Committee on Lottery
ii. Recommendations of the Committee on IGST
iii. Recommendations of the Report of the Task Force to suggest measures for creating and
Eco-System for Seamless Road Transport Connectivity
iv. Recommendations of the Group of Ministers on Digital Payments
v. Interim report of the Group of Ministers on imposition of Sugar Cess
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vi. Recommendations of the Group of Ministers on Reverse Charge Mechanism
9. Minutes of 9th Meeting of Group of Ministers (GoM) on IT Challenges in GST Implementation
for information of the Council and discussion on GSTN issues
10. Ad hoc exemption order issued under Section 25(2) of the Customs Act, 1962 for information
of the GST Council
11. Any other agenda item with the permission of the Chairperson
12. Date of the next meeting of the GST Council
Preliminary discussion
3. Shri Shiv Pratap Shukla, Minister of State for Finance, welcomed Shri Piyush Goyal, Union
Finance Minister (hereinafter referred to as the Chairperson) on behalf of all the Council Members and
the officers. He stated that the Hon’ble Chairperson was chairing the Meeting for the first time in place
of Shri Arun Jaitley, Union Minister. He then invited the Hon’ble Chairperson to start the proceedings.
The Hon'ble Chairperson stated that this was his first experience to attend the meeting of the Council.
He applauded the positive work of the Council and stated that the Council had made a historic display
of consensus based on co-operative and collaborative federalism. With the success of the GST, there
was a thinking that similar model could be replicated in other departments like agriculture,
infrastructure, etc. He added that this was the first meeting of the Council after completion of one year
of GST roll out and everyone present could take pride in the largest reform ever attempted in the world.
He stated that the credit for GST roll out went to the political leadership and officers of all 29 States and
7 Union Territories, who despite their different political ideologies, worked for the future of the country
and for the next generation. He added that it was truly amazing for the world to see that India could
present this united stand. It was a matter of pride for India to be able to showcase the working of the
GST Council and the successful implementation of GST to the world inspite of some hurdles in the
beginning. He stated that the rest of the world was impressed that India could unitedly bring about
change for the betterment of its people. He stated that GST rollout was also a matter of pride for India
as well as for the Council during the 2018 World Economic Forum meeting at Davos. He further
observed that the Council had very sensibly and sensitively responded to people’s concerns expressed
from time to time and this had led to public participation and support of 125 crore people of India for
this reform. He expressed that upon completion of one year of GST, the Council should resolve to thank
125 crore people of India who adopted GST despite some small initial problems. He also stated that the
Council should thank all the States who made GST a success for the benefit of the people, going beyond
political considerations.
3.1. The Hon'ble Chairperson further added that it was a matter of great pride that now that there
was one nation, one law and one procedure in the indirect taxation system of India. He stated that GST
would impart respect for honesty and transparency in the country. e-Way bill system was a big step in
improving compliance and all the Hon’ble Members of the Council deserved the highest accolade for
introducing this reform in a phased manner and organized fashion. He further appreciated that growth
had been maintained in the GST structure. He stated that the tax collection was at a reasonable level
and expressed confidence that GST revenue would grow with greater ease of operation and record
maintenance, lower tax rates and simplification of processes. He also expressed confidence that the
Council would continue its high tradition of taking decisions by consensus.
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3.2. Dr. Hasmukh Adhia, Union Finance Secretary and Secretary to the Council (hereinafter referred
to as the Secretary) informed that Smt. Vanaja N. Sarna, Chairman of the Central Board of Indirect
Taxes and Customs (CBIC) had superannuated on 30 June, 2018. He placed on record the Council’s
appreciation for her contribution towards GST. He welcomed the new Chairman, CBIC, Shri S.
Ramesh, who would be attending the Council meetings henceforth.
3.3. The Secretary further stated that the Chief Economic Adviser (CEA), Shri Arvind Subramanian
was leaving India on 26 July, 2018 to teach at the Harvard University, USA. He stated that the CEA
was a great pillar of support to the work of the Council and his best contribution was his report on
Revenue Neutral Rate under GST, which became a landmark document for working on the tax structure
under GST. On behalf of the Council, he expressed gratitude for the work of CEA in the Council.
3.4. The CEA thanked the Hon'ble Chairperson as well as Shri Arun Jaitley and others for giving
him the chance to work for the Council. He stated that his association with the Council was one of the
highlights of his job. He observed that it was an extraordinary and ambitious reform which could be
brought about through extraordinary political compromise, information technology and the coming
together of the officers of the Centre and the States. He expressed a hope that the spirit of co-operative
federalism may extend to other areas of work of the Government at the Centre and the States. He also
observed that for rationalization of tax rate, there should be a structured effort and hoped that over a
period of two years, with growing revenue, there would be a three-rate structure, as suggested in his
Report. He, in particular, expressed his appreciation for the extraordinary work done by Shri Arun Jaitley
and Dr. Hasmukh Adhia in the GST Council.
3.5. The Hon’ble Minister from Punjab congratulated the Hon'ble Chairperson for chairing the
meeting. He also placed on record the stellar work done by Shri Arun Jaitley as Chairperson of the
Council and prayed for his early recovery. He stated that he was very conscious of the fact that after
thousands of years, India was at the cusp of eradicating poverty. He observed that the Council had no
option to fail in its work and hoped that its work would lead India to become a super power soon. He
stated that during the Council meetings, Punjab had many times ignored its own interest for the higher
interest of the country. He stated that he as well as the Hon’ble Minister from West Bengal had written
to the Hon’ble Chairperson earlier and also highlighted that the detailed agenda notes for this Meeting
run into more than 400 pages and covered issues such as amendment to GST laws, rules, rates, returns,
GIC, etc. These were very important issues and it was humanly impossible to go through 400 pages in
a short time of three days. They needed more time to study the proposals to first convince themselves
and then to convince the State Cabinet and then their people in the State. He recalled that in the 25th
Meeting of the Council held on 18 January 2018, the Council gave in principle approval to the proposed
amendments in GST Laws and asked the Law Committee to get it vetted by the Law Ministry. He stated
that many proposals of the Law Review Committee were not being reflected without any mention of
reason thereof. He requested to defer the law amendment proposals by two weeks for wider consultation
with the stakeholders.
3.6. The Secretary stated that the agenda notes other than that relating to Fitment of rates of tax were
discussed in detail from 10.00 a.m. to 8.00 p.m. during the Officers meeting held on 20 July, 2018. He
stated that the agenda notes relating to Agenda items 1 to 4 [Confirmation of the Minutes of 27th Meeting
of Council; Ratification by the Council of Notifications, Circulars and Orders; Decisions of the GST
Implementation Committee (GIC); and Decisions/recommendations of IT Grievance Redressal
Committee] were sent well in advance to all the States and they had been put in the Agenda only for
quick recapitulation. He stated that the Agenda of the Law Committee only ran into 20-30 pages. The
Agenda of the Fitment Committee was long only because detailed justification was given for the
proposals for ease of reference of the Council Members; otherwise it could have been covered only in
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two to three pages. He further stated that it was not desirable to send the Agenda related to Fitment of
Rates too much in advance since these are sensitive proposals. He added that for the sake of
transparency, Minutes of the Group of Ministers and those of the previous Council Meeting as well as
the presentations were made part of the Agenda as annexure, and therefore, the Agenda notes looked
bulky. He also informed that during the Officers meeting held on 20 July, 2018, the participants
complimented Shri Shashank Priya, Joint Secretary, GST Council, and his team for writing very good
and detailed minutes.
3.7. The Hon’ble Minister from Punjab stated that it would be preferable to circulate Agenda notes
10 days in advance of the Council Meeting. At least, all Agenda notes that is ready early, should be sent
well in advance. He also observed that a gap of two and a half months between two Council Meetings
was too long and suggested that the Council must meet once a month. In such a case, since Agenda
items would be less, it would be fine if it is received three to five days in advance. He added that this
would also show that the Council was sensitive to the needs of the people. The Hon'ble Deputy Chief
Minister of Bihar also suggested that Agenda notes which were ready should be sent 10-15 days in
advance.
3.8. The Hon’ble Deputy Chief Minister of Delhi stated that during the 26th Meeting of the Council
held on 10 March, 2018, there was an Agenda note (Agenda Item 5) to put IGST amount lying in balance
at the end of a Financial Year into the Consolidated Fund of India (CFI), and to be devolved as per
Article 270 of the Constitution. This proposal was not accepted by Delhi and many other Members and
accordingly this Agenda item was deferred. However, now Rs.1.60 lakh crore of IGST revenue was put
in the CFI. He stated that the tax collected from Delhi should go to Delhi but since it had gone to the
CFI, Delhi did not get any devolution out of this amount. He questioned whether the Central
Government could take unilateral decision to put this amount in the CFI when the Union Territory with
legislature also have the status of a State for the purpose of GST revenue. He stated that the Minutes of
this Council Meeting should specifically record his opposition to this unilateral decision of the
Government of India to put Rs.1.60 lakh crore of IGST revenue in the Consolidated Fund of India when
an Agenda item on this issue was withdrawn during the 26th Meeting of the Council. He added that
today’s agenda on IGST settlement was a welcome move and after disbursing Rs 50,000 crore to States,
Delhi had received Rs 1050 crore. Had Rs 1.68 lakh crore been disbursed as per this formula, Delhi
would have got Rs 3300 crore. He observed that, till now, all decisions of the Council were being taken
by consensus and deferred issues had been respected but with this unilateral decision on a deferred issue,
the Government had disrespected the Council. He further stated that the interest of States including
Delhi should be upheld in future.
3.9. The Hon’ble Chief Minister of Puducherry fully supported the views of the Hon'ble Deputy
Chief Minister of Delhi. He stated that the Union Territories of Delhi and Puducherry were neither part
of the Central Finance Commission nor Union Territories Finance Commission. The devolution of funds
coming from the Central Government, which stood earlier at 70% had come down to 30% and now their
State was getting only 25% grant from the Government of India. He informed that he had earlier taken
up this issue with the Hon’ble Union Finance Minister and the Hon’ble Prime Minister, but nothing had
been done. He added that in the GST law, Union Territory with legislature was also recognized as a
State for the purpose of GST and when it qualified as a State and as a Member of the Council, it should
get its share of the devolution of funds accruing from GST. He also expressed his opposition to the
unilateral decision taken by the Government of India to apportion the money only to the States and not
to Union Territories with legislature and stated that Puducherry should get its due share.
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3.10. The Hon'ble Chairperson stated that this issue could be discussed further during discussion on
the relevant Agenda item. He then invited the Secretary to start discussion on various Agenda items for
the Council Meeting.
Discussion on Agenda items
Agenda Item 1: Confirmation of the Minutes of 27th GST Council Meeting held on 4 May, 2018
4. The Secretary informed that during the Officers meeting held on 20 July, 2018, no comments
on the Minutes of 27th Council Meeting were offered. He invited comments, if any, of the Members of
the Council. There were no comments on the Minutes.
5. For Agenda item 1, the Council decided to adopt the Minutes of the 27th Meeting of the Council
without any changes.
Agenda Item 2: Deemed ratification by the GST Council of Notifications, Circulars and Orders
issued by the Central Government
6. The Secretary stated that the deemed ratification of the notifications, circulars and orders issued,
based on the decisions taken during the 27th Meeting of the Council, issued after 4 May, 2018 and till
16 July, 2018 were presented during the Officers meeting on 20 July 2018. He suggested that the same
may be approved by the Council. He also suggested that the notifications, circulars and orders issued by
all the Member States, which are pari materia with the notifications, circulars and orders of the Central
Government may also deemed to be ratified. The Council approved the suggestion.
7. For Agenda item 2, the Council approved the deemed ratification of the following notifications,
circulars and orders, which are available at www.cbic.gov.in
Act/Rules Type Notification/Circular Nos.
CGST Act/CGST Rules Central Tax 22 to 29 of 2018
Central Tax (Rate) 11 and 12 of 2018
IGST Act Integrated Tax (Rate) 12 and 13 of 2018
UTGST Act Union Territory Tax 07 to 11 of 2018
Union Territory Tax (Rate) 11 and 12 of 2018
Circulars Under the CGST Act 44 to 49 of 2018
Under the IGST Act 3 of 2018
The notifications, circulars and orders issued by all the Member States, which are pari materia with the
above notifications, circulars and orders were also deemed to have been ratified.
Agenda Item 3: Decisions of the GST Implementation Committee (GIC) for information of the
Council
8. The Secretary invited Shri Upender Gupta, Commissioner (GST Policy Wing), CBIC, to make
a presentation on the decisions taken by the GIC so that the Members of the Council could be apprised
of the same. The Commissioner (GST Policy Wing), CBIC, made the presentation, which is attached
as Annexure 3 to the Minutes.
9. For Agenda item 3, the Council took note of the decisions of the GIC.
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Agenda Item 4: Decisions/Recommendations of IT Grievance Redressal Committee for
information of the Council
10. The Secretary invited the Commissioner (GST Policy Wing), CBIC, to make a presentation on
the decisions/recommendations of the IT Grievance Redressal Committee, which is attached as
Annexure 3 to the Minutes. The Commissioner (GST Policy Wing), CBIC, stated that a circular had
been issued on 3 April, 2018 prescribing the procedure for taxpayers for lodging their grievances due to
technical glitches in the GST portal. The GIC was mandated to act as the IT Grievances Redressal
Committee (ITGRC) for resolving the problems of taxpayers who have not been able to file their
documents like TRAN-1, TRAN-2, GSTR-3B and GSTR-1 or to complete registration/migration due to
technical glitches at GST portal. He stated that taxpayers were required to submit their applications to
the designated nodal officers of the State Governments and the Central Government, who in turn would
examine the complaint and if prima facie, it was found to be a case of technical glitch by the said nodal
officer, he would send the issue along with remarks and recommendation to GSTN’s nodal officer by
email. He stated that a Standard Operating Procedure (SOP) was issued on 12 April, 2018 by the GSTN
to the Commissioners of the Central and the State Governments for forwarding representations received
from taxpayers to the nodal officer of GSTN.
10.1. He further stated that a total of 598 cases related to TRAN-1 and TRAN-2 and 1881 cases
relating to migration had been received by the GSTN till 15 June, 2018. Out of this, 170 cases relating
to TRAN-1/TRAN-2 and 748 cases relating to migration/registration were examined by GSTN and
analysis presented before the ITGRC. ITGRC allowed 122 taxpayers to file their TRAN-1/TRAN-2 and
406 taxpayers to complete their migration process. The ITGRC also directed the Law Committee to
examine and map the consequential issues that may arise relating to such filing of TRAN-1/TRAN-2
and migration and suggest ways to handle such situations, wherever required, in a time bound manner.
He also referred to different categories of TRAN-1/TRAN-2 and migration cases approved by the
ITGRC. He added that as on 15 July, 2018, approximately 3500 cases of grievances relating to migration
/registration/ TRAN-1/TRAN-2/GSTR-3B/GSTR-1/ITC-01/ITC-04, etc. had been received by the
GSTN’s Nodal Officer. In the first list, approximately 918 cases were examined and presented to
IRGRC. Another lot of around 1200 cases had been examined by GSTN and would be put up before
the ITGRC. The remaining cases were under investigation with respect to cause and checking of logs
in GST system. He also referred to some challenges faced in the examination of cases i.e. the SOP was
not being followed such as no prima facie examination was being done by the nodal officers, cases being
sent without any remarks, non-technical issues, duplicate entries etc., while forwarding the taxpayer’s
grievances relating to technical glitches.
10.2. He informed that during the Officers meeting held on 20 July, 2018, discussion took place
regarding many taxpayers who did not file Part B of GST REG-26 and who were given only a
provisional ID but no GSTIN. These taxpayers were not able to file their returns and pay taxes and it
was suggested that migration should be allowed one more time. During the Officers meeting, it was
recommended to allow migration to all those taxpayers who had obtained provisional ID by filling up
Part A of GSTR REG-26, but who could not fill up Part B ibid due to any reason, technical or otherwise,
by the prescribed last date of 31 January, 2018. For this, the Commissioner can issue an order under
Rule 24 of CGST Rules, 2017 extending the time limit for furnishing the information as required under
the said Rule and that the Nodal officers of the Central and State Governments should send such cases
to GSTN by 14 August, 2018. It was also proposed that in such cases, fee for late filing of return would
be waived (by way of reversal in electronic ledger and crediting the amount in the relevant tax head
from the fee head) but interest would be charged on delayed payments of tax. For this purpose, it was
also recommended to expand the mandate of ITGRC to allow migration of even those taxpayers who
could not migrate due to reasons other than technical glitches.
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10.3. The Secretary stated that the ITGRC had looked into the cases of technical glitches but now the
proposal was that whoever could not complete migration into GST could be allowed one more time to
complete the migration till 14 August, 2018 on the basis of recommendation received by GSTN from
the Principal Nodal officers / Nodal officers of Central and State Governments. He added that a large
number of cases had been filed in High Courts on this issue and this decision would help to bring down
such litigation. The Hon'ble Chairperson observed that it would be fair to extend this relief to the
taxpayers. He also raised a question regarding the status for allowing filing of TRAN-1. The Secretary
informed that filing of TRAN-1 had financial implication and it needed to be examined further. The
Hon'ble Minister from Maharashtra suggested that the date for receiving requests of taxpayers to migrate
to GST could be taken as 31 August, 2018 instead of 14 August 2018. The Council agreed to this
proposal.
11. For Agenda item 4, the Council approved the following:
(i) To allow migration of those taxpayers to GST, who have submitted Part A of REG-26 but could
not complete the migration process, and whose applications were received by the Principal Nodal
officers / Nodal officers of the Central and State Governments till 31 August, 2018;
(ii) In order to give effect to the decision at (i) above, ITGRC’s mandate will be to allow migration
of even those taxpayers who could not migrate due to reasons other than technical glitches and an
order under Rule 24 of CGST/SGST Rules, 2017 will be issued by the Commissioner extending
the time limit for furnishing the information as required therein;
(iii) To waive the late fee (by way of reversal in electronic ledger and crediting the amount in the
relevant tax head from the fee head) for filing of returns for the months of July, 2017 to August,
2018 by such taxpayers who complete their migration process as per this decision;
(iv) To allow filing of TRAN-1 and TRAN-2 in 122 cases, as listed in Annexure 3 of the Minutes
of the first meeting of ITGRC held on 22 June, 2018 relating to technical issues with all
consequential benefits to the taxpayers. The technical issues would be limited to the below
mentioned 4 categories:
(a) Cases where the taxpayer received the error “Processed with Error”. The taxpayer could
not claim transitional credit as the line items requiring declarations of earlier existing law
registration were processed with error since the taxpayer had not added them in his
registration details.
(b) Cases where TRAN-1 was attempted or TRAN-1 revision was attempted by taxpayer on
or before 27.12.2017. However, the taxpayer could not file due to encountered errors. The
taxpayer in these cases received messages such as “system error”, “upload in progress”,
“save in progress” etc.
(c) Cases in which as per GST system logs, the taxpayer was not enabled to file TRAN1 till
its due date of filing of 27.12.2017 due to registration/migration issues. In this category,
the taxpayers’ dashboards were not enabled because of issues in migration application and
hence they could not file their TRAN-1.
(d) Cases in which the taxpayer filed his TRAN-1 once but no credit has been posted due to
technical reasons.
(v) The Law Committee shall map the consequential benefits relating to filing of TRAN-1 and
TRAN-2 and recommend how to handle such situations in a time bound manner.

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Agenda Item 5: Review of Revenue Position under GST
12. The Secretary invited Shri Ritvik Pandey, Joint Secretary, Department of Revenue (DoR) to
brief the Council on the GST revenue position. Joint Secretary, DoR gave an overview of the GST
revenue including CGST, SGST, IGST and Compensation Cess (domestic and imports) for April to June
2018. Total revenue collected during April 2018 was Rs.103,459 crore; in May 2018, it was Rs.94,016
crore; and in June 2018, it was Rs.95,610 crore. He also briefed on the IGST Settlement for the months
of April to June 2018. IGST Settlement for April 2018 was Rs.28,394 crore; for May it was
Rs.25,261crore; and for June it was Rs.30,338 crore. Out of this, CGST and SGST breakup for April
2018 was Rs.13,841 crore for CGST and Rs.14,553 crore for SGST; for May 2018, it was Rs.12,931
crore for CGST and Rs.12,330 crore for SGST; and for June 2018, it was Rs.15,676 crore for CGST and
Rs.14,662 crore for SGST. He further informed that there was an ad hoc provisional settlement of
Rs.25,000 crore each of CGST and SGST in the month of June 2018. He stated that with this ad hoc
IGST settlement of Rs.50,000 crore, there was negative balance in the IGST account for the period
April-June, 2018.
12.1. The Joint Secretary, DoR also presented a chart of the average revenue trends of the States from
August 2017 to June 2018 which showed that all India percentage shortfall of revenue was 13%. He
also presented a Return filing analysis till due date and on cumulative basis till date. He pointed out that
the return filing percentage had shown an increasing trend till December 2017 but it declined thereafter,
which was a matter of concern.
12.2. The Hon’ble Chairperson observed that those States which had a return filing percentage of less
than 60% of the registered taxpayers needed to examine as to how many taxpayers were not actually in
the tax net. He stated that it might be the case that during the roll out of GST, many taxpayers below
the threshold limit would have taken registration, who in the first place who were not required to be
registered with the tax administration. Some action could be taken to take these taxpayers out of the tax
net, which would automatically improve the return filing percentage. He also stated that those who still
wanted to retain the GST registration, should be persuaded to file returns as per law.
12.3. The Hon’ble Minister from Uttarakhand observed that for taxpayers with annual turnover below
Rs.1.5 crore, GSTR-1 was to be filed quarterly and GSTR-3B to be filed on monthly basis. He stated
that pre-GST revenue for his State for August 2016 to June 2017 was Rs 5210 crore and after GST
implementation, they collected Rs 3565 crore and after accounting for the Settlement done to States, the
revenue figure stood at Rs 3701 crore. He further stated that pre-GST, the combined tax collection of
Central Excise, Service Tax and VAT in his State was about Rs.8336 crore and post-GST, it was
Rs.15,139 crore. However, they only got Rs.3701 crore after settlement which was 29% less than the
pre-GST regime’s revenue collection. He expressed concern regarding the revenue position of the State
and stated that something needed to be done about it. The Hon’ble Chairperson observed that provision
of Compensation cess was meant for States in such a situation. He further observed that this was also an
issue of gap in revenue between manufacturing States and the consuming States and expressed a hope
that revenue would become buoyant for all States by 2021-22. The Hon’ble Minister from Uttarakhand
stated that by 2021-22, their State would roughly get Rs 13,492 crore and they feared that after five-year
compensation period was over, their revenue shall drop steeply to about Rs.9970 crore. The Hon’ble
Chairperson stated that one needed to look holistically at 5-year growth by Uttarakhand.
12.4. The Hon’ble Minister from Uttarakhand stated that initially when the State of Uttarakhand was
formed, they only had about 1100 MSMEs whereas after the Industrial Package was given to the State
in 2003, the number of medium and large industries increased to 41000 along with 226 Heavy Industries.
However, now all these industries wanted to move out of the State as there was no area-based exemption.
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Further, due to IGST, they were getting no revenue as it was all getting passed on to the destination
States. The Hon’ble Chairperson stated that the issue of Uttarakhand would be examined separately.
12.5. The Hon’ble Minister from Tamil Nadu stated that the process of collating the details of
unutilized credit of IGST would take time and may not be resolved fully even if more time was taken.
He suggested to make an interim arrangement to distribute the accumulated credit. He proposed that
90% of accumulated IGST relating to Financial Year 2017-18 as at the end of March 2018 should be
settled immediately on the same basis as the two provisional settlements of Rs. 35,000 crore and Rs.
50,000 crore made so far and treated as 2017-18 revenue. 90% of accumulated IGST for 2018-19 as on
31 July 2018 should also be settled on the same basis. During the Financial Year 2018-19, 90% of the
IGST amount accumulated each month may be apportioned to the States with a lag of one month. He
also requested that figures of IGST accumulation should be shared transparently with the States every
month. He stated that retention of 10% of the huge initial balance plus 10% of the IGST accumulated
each month was likely to be sufficient to meet any contingency of recovery of excess settlement to the
States.
12.6. The Hon’ble Minister from Punjab stated that his State had the highest revenue gap, both in
percentage term and absolute term. He had been flagging this issue in every Council meeting. He stated
that there appeared to be structural and operational challenges. He observed that though his State had
the highest return filing and tax to GDP ratio, the revenue position was very poor. He recalled that in
previous Council Meeting, CEA had promised to conduct a study for Punjab as a special case to study
and fix this peculiar problem of Punjab. He also stated that just like Uttarakhand, they would also have
severe shortfall of revenue in 2021-22 if this was not addressed quickly. He requested that study for
Punjab should be done quickly through the Council. He also pointed out that after abolishing the power
to levy entry tax by the Constitutional amendment Act, the petroleum revenue was being siphoned off
to other States. Their internal study indicated that there was a rise of 60% in the revenue of the
neighbouring States, which is accrued from petroleum products. He suggested allowing levy of entry
tax on non-GST products. He stated that 40% of Punjab revenue base had been subsumed under GST
and urgent study needed to be conducted as to how to improve the revenue position in his State. The
Hon’ble Chairperson stated that under the Convenorship of the Union Finance Secretary, Finance
Secretaries of States whose revenue gap both in percentage term and absolute term was very high like
Uttarakhand, Punjab, Bihar, Himachal Pradesh, Jammu & Kashmir and Puducherry could meet to work
out a solution on this issue.
12.7. The Hon’ble Deputy Chief Minister of Bihar stated that CEA had studied the revenue situation
in their State but the report was still awaited. CEA assured that the report would be sent soon. The
Hon’ble Deputy Chief Minister of Bihar raised the issue of IGST settlement and stated that their State
officers have no experience of services sector and they needed more clarity on this subject especially
with respect to Banking Sector, Railways and Airlines. Shri Jagdish Chander Sharma, Principal
Secretary, Himachal Pradesh stated that there was huge revenue gap in their State as well. The Hon’ble
Chief Minister of Puducherry observed that in GST, as tax rates in his Union Territory had come at par
with the adjoining States, they were losing revenue. The Secretary suggested that he could sit with the
Secretaries of States of Punjab, Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Puducherry to
analyse reasons for low revenue. The Council approved this proposal. Shri Tuhin Kanta Pandey,
Additional Chief Secretary (ACS), Odisha stated that the States which derived their revenue from metals
and minerals suffered a specific problem. Secretary stated that report of the CEA on Bihar would be
reviewed and that could form the basis for study for other States. The Hon’ble Chairperson stated that
the work of study of revenue gap of the States of Punjab, Himachal Pradesh, Uttarakhand and Jammu
& Kashmir as well as that of Puducherry should be completed in 45 days.
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12.8. The Secretary stated that States were concerned as to what would happen once the compensation
ceased after 4 years. In his assessment, after 3 years, as the compliance under GST improved, no State
might need to be compensated.
12.9. The Hon’ble Minister from Meghalaya stated that percentage of returns filed in the States of
North-East was very low. He stated that in their State, legal requirement of registration was annual
turnover of Rs.10 lakh and about 5,000 taxpayers were between the annual turnover of Rs.10 lakh and
Rs.20 lakh. This constituted almost 50% of the taxpayer base but the revenue coming from them was
only 2%. These were small time people having no computer and no facility for return filing. He stated
that in his view, the low return filing percentage could be because of them. He, therefore, proposed that
for their State, the annual turnover threshold for registration may be increased from Rs.10 lakh to Rs.20
lakh as also proposed by Assam.
12.10. The Hon’ble Minister from Assam stated that the North-Eastern States had earlier wanted
threshold for registration at annual turnover of Rs.10 lakh. Now, there was proposal by Assam to
increase this threshold to Rs.20 lakh and Sikkim had also supported the proposal subsequently. If States
of Meghalaya and Uttarakhand also wanted to increase their threshold, Council could agree to it. The
Hon’ble Chairperson suggested that an enabling provision could be provided in the Law that Council
could increase the threshold limit in the Special Category States. Secretary sought the opinion of Dr.
Rajiv Mani, Joint Secretary, Law Ministry, regarding the proposed law amendment. The Joint Secretary,
Union Law Ministry stated that the GST Law could have an enabling provision to permit increase in the
annual turnover threshold for registration for any State up to Rs.20 lakh. The Hon’ble Chairperson
stated that the GST Law should have such an enabling provision so that any North-Eastern State which
wanted to later increase its annual turnover threshold from Rs.10 lakh to Rs.20 lakh for registration
could do so easily without requiring a change in the Law but with the recommendation of Council.
12.11. The Secretary stated that as per the presentation by Joint Secretary, DoR, the revenue gap during
the first seven months was 17% which had come down to 13% in the 11 months of GST roll out, due to
better compliance. The Hon’ble Chairperson observed that compliance must have improved
substantially during the last 4 months and the country was possibly revenue neutral for the last 4 months.
He stated that the officers of the Fitment Committee should be complimented for achieving this while
also reducing rates from time to time. He further observed that the success and benefits of e-Way Bill
were yet to be fully reaped. He also stated that refinements in e-Way Bill system like distance matching
through pin codes would further reduce mis-declaration and misuse of the e-Way Bill.
12.12. The Joint Secretary, DoR informed that during the Officers meeting on 20 July 2018, it was also
recommended to put the GST revenue collection data in the public domain at macro level with some lag
as also the revenue collected by the States in the Financial Year 2016-17 from the taxes subsumed in
GST for analysts, media or for general public with a view to increase transparency. He requested that
the Council may approve this proposal. The Council approved the same.
13. For Agenda Item 5, the Council: -
i) Took note of the revenue position under GST for April to June 2018;
ii) Decided that the study conducted by CEA for Bihar regarding its revenue gap shall be used
as a basis for conducting similar study for the States of Punjab, Himachal Pradesh,
Uttarakhand, Jammu & Kashmir and Puducherry, for which the Union Finance Secretary
shall work with the Finance Secretaries of the above mentioned States and submit the Report
within 45 days;
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iii) Decided that the GST revenue data at macro level as well as revenue collected by the States
in the Financial Year 2016-17 from the taxes subsumed in GST shall be put in the public
domain on the website of Department of Revenue.
Agenda Item 6: Issues recommended by the Law Committee for consideration of the GST
Council
Agenda Item 6(i): Proposals for amendments in the CGST Act, 2017, IGST Act, 2017,
UTGST Act, 2017 and GST (Compensation to States) Act, 2017
14. The Secretary invited Shri Upender Gupta, Commissioner (GST Policy Wing), CBIC, to make
a presentation on the proposed changes in the GST Law. The presentation made by the Commissioner
(GST Policy Wing), CBIC is attached as Annexure 4 to the Minutes. During the presentation, he stated
that a Law Review Committee (LRC) was constituted after the 22nd Meeting of the Council held on 6
October, 2017. The LRC submitted its first draft report on 04.01.2018 and the final report on
11.07.2018. The GST Policy Wing, CBIC analysed various representations received and prepared a
broadsheet containing proposals for amending the Law. A consolidated proposal for law amendment as
proposed by Law Committee (LC) and LRC were discussed in the Officers meeting before the 25th
Meeting of Council held on 18 January 2018 and the Council accorded in-principle approval of the
recommendations of the officers.
14.1. He informed that four joint meetings of the LC and LRC were held to finalize the proposals and
to draft the formulations. The draft proposals that were agreed upon in the four joint meetings were
further discussed by the LC on 6 July, 2018. The finalised 48 amendments relating to CGST Act,
2017(38), IGST Act 2017(7), UTGST Act, 2017(1) and GST (Compensation to States) Act, 2017(2)
were put in a broadsheet and placed in public domain on the website https://www.mygov.in with the
approval of the GST Implementation Committee (GIC) from 9 July, 2018 to 15 July, 2018 for inviting
comments from trade and public. He stated that about 1300 suggestions were received on the said
MyGov.in URL and some more were received through mail from ASSOCHAM, FICCI, CII, PHD
Chamber of Commerce and Industry, SIAM, IMC, ICAI, E&Y, AMCHAM, Export Promotion Council,
EOU & SEZ, etc. He stated that all these suggestions were examined and wherever it was felt that it
could be included in the draft proposals as put in the public domain, these were added. These proposals
were discussed thoroughly in the Officers Meeting on 20 July 2018 and as a result, further 19 changes
were suggested which were also incorporated in the Presentation.
14.2. The Hon’ble Deputy Chief Minister of Delhi asked whether the report of the LRC was shared
with the States and tabled before the Council. Shri Shashank Priya, Joint Secretary, GST Council
informed that it was shared with the Convenor of the LC and the GST Policy Wing of CBIC. The
Hon’ble Deputy Chief Minister, Delhi stated that as a principle, for any Committee set up by the Council,
the report should be first submitted to the Council for taking any decision based on its report.
14.3. The Hon’ble Minister from Punjab stated that the Council during its 25th Meeting held on 18
January 2018 gave in principle approval to the LRC’s recommendations for 69 changes in the Law and
only legal vetting was to be done but out of these, only 8 proposals were accepted without any change
and 15 were accepted with modifications. He asked as to what happened to the rest of the proposals and
it is not understood why many proposals were completely dropped. He stated that they were not against
changes in Law but it could not be changed frequently and multiple changes would lead to protracted
litigation. He suggested that 10 more days’ time should be given to discuss and consider these proposed
changes in the CGST/SGST Law with the stake holders before finalisation. He further observed that
since about 1300 suggestions were received with regard to the proposed changes, the Council should
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also be made aware of these suggestions. He added that State Ministers were answerable to stakeholders
and he needed time to study the proposed changes in the Law.
14.4. The Hon’ble Chairperson suggested to first run through the presentation on the agenda item and
also asked to explain as to what happened to the 69 proposals submitted by the LRC and why some
suggestions were modified and some were left out. He further stated that the 1270 suggestions/feedbacks
received on MyGov.in portal should be shared with the States. The Commissioner, (GST Policy Wing)
CBIC stated that the suggestions of the LRC were discussed in the joint meetings of the LC and the LRC
and those proposals were not taken forward on which there was no agreement. He requested Shri P.K.
Mohanty, Convenor, Law Committee to further elaborate on this subject.
14.5. The Convenor, Law Committee stated that the first report of LRC was given on 4 January, 2018
and the final report on 11 July, 2018. Between these two reports, 17 broadsheets/papers containing law
amendment proposals were circulated by LRC for discussion in the joint meetings of the LC and the
LRC. All law amendment proposals of the LRC were carefully considered and four joint meetings of
the LC and the LRC were convened – one each in February, April, May and June, 2018 - to consider the
proposals in detail, and after further discussions in the Ministry and by the Law Committee, 46 proposals
were put in the public domain.
14.6. He stated that some of the proposals made by the LC and the LRC in their joint meetings were
dropped on account of various considerations. For example, one proposal regarding replacing the word
“beyond” with the word “within” in Section 122 which related to collection of any amount as tax by a
taxable person but failure to pay the same to the Government beyond a period of three months was
dropped as the Union Law Ministry had approved the existing language after discussing this very issue
and had also noted that the same formulation was part of the Service Tax Law. Another proposal that
was dropped related to a proposed amendment providing that eligibility of zero rating for supply to SEZ
would only be for ‘authorised operations’. He stated that this issue was already addressed in the GST
Rules and the SEZ Act also provided for benefit of zero rating only for ‘authorised operations’. If Law
was changed at this stage, it could be construed that for the past period, supplies made to SEZ for non-
authorised operations would also be eligible for zero rating.
14.7. He further stated that a third example related to the problem of reversal of input tax credit in
respect of the services provided by way of extending loans and deposits. He explained that services by
way of extending deposits, loans or advances in so far as the consideration is represented by way of
interest or discount are exempt from GST. In terms of Section 17(2) of the CGST Act, 2017, input tax
credit (ITC) is not available in respect of exempt supplies, that is to say, ITC of common inputs and
input services used in exempted supplies is required to be reversed. In the service tax regime, as a
business-friendly measure, it had been provided in the Cenvat Credit Rules that the value for the purpose
of reversal of common input tax credit shall not include the value of services by way of extending
deposits, loans or advances against consideration in the form of interest. A similar provision was,
however, not made under GST. The matter was considered by the Council during its 25th Meeting held
on 18 January, 2018 and it was decided to make a provision in the CGST Rules that the value of exempt
supply under Section 17(2) shall not include the value of deposits, loans or advances on which interest
or discount is earned. This would however not apply to a banking company and financial institution
including NBFC. Accordingly, the CGST Rules were amended so as to provide an Explanation under
Rule 43. The implication of the change was that ITC would not be denied on the value of deposits, loans
or advances on which interest or discount is earned. Insertion of a paragraph in Schedule III to cover
the above issue, as recommended in the LRC Report, will achieve the same purpose which has already
been met by way of amendment in the CGST Rules, 2017 as per the directions of the Council. As the
matter was resolved, it was felt that an amendment in Schedule III need not be carried out. The
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Convenor, Law Committee stated that the LRC had made a suggestion to create a Schedule IV for
Exempt Supplies but earlier the Council had decided not to incorporate such supplies in a Schedule and
to address such supplies through the exemption route. It was, therefore, felt not advisable to go against
the earlier decision of the Council.
14.8. The Hon’ble Minister from Punjab stated that the definition of ‘supply’ was a subject of doubt,
challenge and litigation. He requested to clarify as to why the changes recommended regarding the word
‘supply’ did not find any mention in the draft proposals. Shri V. K. Garg, Advisor (Financial Resources),
Punjab stated that the heart and soul of GST is ‘supply’. He further stated that there were many other
problematic issues in respect of GST Law. The Schedule II of CGST Law provides that any undivided
share in goods is a supply of service, and a question would arise whether an undivided/unascertained
share in goods which included alcohol for human consumption, would also become supply of service,
though it was not in GST. He pointed out another instance of problem in law with regard to definition
of IGST. The definition of IGST is that it is a tax charged under section 5 of the IGST Act, which
implies that IGST charged by any section other than section 5 is not an IGST. He stated that nine months
back, they had raised the issue regarding imported goods as to whether IGST on imported goods was
being charged under the IGST Act or the Customs Tariff Act. The IGST Act provides that IGST on
imported goods will be charged under Section 3 of the Customs Tariff Act 1975; if a tax was charged
under the Customs Tariff Act, then no input tax credit would be available under the CGST/SGST Act.
This appeared to be a dual taxation and no reply had been received so far. He further stated that the
definition of supply in Section 7 of the CGST/SGST Act required many changes. The definition of
supply as it stood today was a matter of doubt and it was not understood why the changes suggested by
LRC were dropped. He recalled that earlier too, during July 2016, more than 50,000 representations
were received and on 26 November, 2016, only 3 days consultation was permitted with the stake holders.
The same mistake was being repeated and only one week’s consultation was being allowed for proposed
changes in Law, which was inadequate. He stated that there should be more consultation and they would
revert with their suggestions with full urgency.
14.9. The Convenor, Law Committee stated that as regards Section 7, the current text made entries in
Schedule II to the CGST/SGST Act taxable activities whereas Schedule II was only intended to classify
certain activities as goods or services in case they were taxable. Hence, proposal for amendment to
Section 7 to this extent was agreed upon. He stated that broadly, proposals which did not have
significance for taxpayers were dropped and only those proposals which facilitated trade were retained.
He further informed that the Final Report of the LRC had some 23 law amendment proposals in the
Report which did not figure in any of the 17 papers / broadsheets that were circulated by LRC for
discussion in the joint meetings. He added that there were some 16 law amendment proposals in the
Report which could not be taken up for discussion in the joint meeting of the LC and LRC for want of
time. Bulk of these proposals were received on 6 June, 2018 and the proposals could not be discussed
in the last joint meeting of LC and LRC held on 7- 9 June, 2018. Referring to the two points raised by
the Advisor (Financial Resources), Punjab, he informed that the above points were not there in the LRC
Report, nor these were brought before the joint meetings of the two Committees. The Secretary further
clarified that only 47, and not 69, changes to GST law were proposed during the 25th GST Council
Meeting held on 18 January 2018.
14.10. The Hon’ble Chairperson observed that GST was a new law and it was not possible to make it
perfect in such a short time. He suggested to look at the proposals on the table and if more changes in
law were required, these could be examined further and taken up later. He stated that this would send a
message that the Council cared for small and medium enterprises.
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14.11. The Hon’ble Deputy Chief Minister of Delhi stated that one could agree with the changes which
were already agreed upon in the Council such as the return format and increasing the annual turnover
eligibility criteria for Composition taxpayers from of Rs.1 crore to Rs.1.5 crore. He suggested that only
these changes might be done in the current Parliament session. The Hon’ble Chairperson stated that the
Council should do what could be done and review the other changes subsequently.
14.12. After these discussions, Commissioner (GST Policy Wing), CBIC proceeded with the
Presentation. The discussion in the Council in respect of the specific proposals is summarised as below:
(i) S. No. 6 of Presentation relating to Section 7 of CGST/SGST Act: The Commissioner (GST
Policy Wing), CBIC explained that Section 7 (1) was proposed to be amended by creating a new
sub-section (1A) clarifying that certain activities or transactions, which constituted a supply in
accordance with the provisions of sub-section (1) of Section 7, shall be treated “either as supply
of goods or supply of services as referred to in Schedule II”. Advisor (Financial Resources),
Punjab stated that the existing provision under Section 7 which made activities under Schedule II
as a supply of goods or services was an inadvertent error in law drafting. If it was corrected at
this stage prospectively, there would be numerous litigation. In this view, he proposed that this
amendment should be carried out with retrospective effect. The Hon’ble Deputy Chief Minister
of Bihar cautioned that retrospective amendment could lead to a situation of tax refunds. The
Secretary stated that this issue was discussed in the Officers meeting of 20 July 2018 and some
officers had also expressed similar apprehension but the Council could take a view on this. After
further discussion, the Council agreed to amend this provision with retrospective effect.
(ii) S.No.10 of Presentation relating to Section 9(4) of CGST/SGST Act: The Hon’ble Minister
from Kerala stated that under Section 9(4) of the SGST Act, the States should have the power to
put specific products under reverse charge. For their State, rubber was a very sensitive product
which they would like to put under reverse charge. Commissioner (GST Policy Wing), CBIC
stated that GST was a uniform law and it should be made uniformly applicable all over India on
the recommendation of the Council. The Hon’ble Chairperson stated that Kerala could always
present a proposal for a specific product before the Council, which could be approved by the
Council and this would then apply uniformly across India. He stated that all other States would
also have the freedom to bring similar proposals. He further observed that the Council could meet
more frequently to address the concerns of the States. The Council approved the formulation as
proposed in the Presentation.
(iii) S. No. 11 of Presentation relating to Section 10(1) and 10(2) of CGST/SGST Act: The
Hon’ble Deputy Chief Minister of Bihar suggested that since the annual turnover limit for
Composition taxpayers was being increased from Rs.1 crore to Rs.1.5 crore, the upper limit for
value of services that could be supplied by Composition taxpayers should also be increased from
the proposed Rs.5 lakh to Rs.15 lakh. The Council could then take a decision whether this
turnover limit for services should be Rs.5 lakh or more. The Hon’ble Minister from Haryana
pointed out that there appeared some contradiction in the proposed formulation as 10% of Rs.1.5
crore would be Rs.15 lakh whereas the cap was kept at Rs.5 lakh. Shri V.P. Singh, CCT, Punjab
explained that the intent of the proposed formulation was to allow every Composition taxpayer to
supply services up to a turnover of Rs.5 lakh but no one would get this benefit beyond a turnover
value of Rs.15 lakh. Those whose turnover was less than Rs. 1.5 crore would get a lesser
entitlement for supply of services, but all would be assured of entitlement of supplying services
up to a turnover of Rs.5 lakh annually. The Commissioner (GST Policy Wing), CBIC stated that
once the annual turnover threshold for Composition taxpayers was being increased to Rs.1.5
crore, 10% of this would become Rs.15 lakh and therefore the upper limit would now be
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automatically Rs.15 lakh as proposed by the Hon’ble Deputy Chief Minister of Bihar. The
Hon’ble Chief Minister of Puducherry stated that they had received the agenda only three days in
advance of the Meeting and the States that were not part of the Law Committee needed more time
to examine this proposal. The Hon’ble Minister from Assam stated that the proposed amendment
to Section 10 to increase the annual turnover threshold to Rs.1.5 crore was already decided in the
23rd Council meeting held in Guwahati on 10 November, 2017 and the proposed formulation was
only its implementation. The Council approved the formulation as proposed in the Presentation.
(iv) S.No.17 of Presentation relating to Section 17(5)(a) and new (aa) and (b) of CGST/SGST
Act: The Commissioner (GST Policy Wing), CBIC stated that during the Officers meeting held
on 20 July 2018, it was pointed out that there was some contradiction in the presently drafted text
where transportation of goods was being referred in the sub section which was for motor vehicles
for transportation of persons. He suggested that the formulation could be reworded in consultation
with the Union Ministry of Law. The Council approved the proposal.
(v) S. No. 19 of Presentation relating to Explanation in Section 22: The Commissioner (GST
Policy Wing), CBIC explained that this proposal related to increasing the annual turnover
threshold for registration from Rs.10 lakh to Rs.20 lakh for two Special Category States namely,
Assam and Sikkim. The Hon’ble Ministers from Meghalaya, Uttarakhand, Himachal Pradesh and
Arunachal Pradesh expressed that they would also like to increase their State’s annual turnover
threshold for registration from Rs.10 lakh to Rs.20 lakh. The Hon’ble Deputy Chief Minister of
Bihar suggested that instead of naming each State in the law, an enabling provision could be made
in the Law to increase the annual turnover threshold for registration up to Rs.20 lakh for all the
Special Category States. The turnover threshold for registration could then be increased for those
Special Category States which so desired in future. The Hon’ble Minister from Haryana stated
that this provision was deliberated in great detail during the original drafting of the GST law and
the benefit of lower annual turnover threshold for registration under GST was given to a class of
Special Category States. It needed to be examined whether a further class within this class of
Special Category States should be created or whether all Special Category States should be
persuaded to increase their annual turnover threshold for registration from Rs.10 lakh to Rs.20
lakh. The Hon’ble Chairperson stated that this issue should be kept open and the Special Category
States should be given flexibility to increase their annual turnover threshold to Rs.20 lakh for
registration as and when they felt comfortable with it. Dr. Rajiv Mani, Joint Secretary, Ministry
of Law stated that an enabling provision could be made in the GST Law so that the Council could
approve the names of the Special Category States as and when they wanted to increase their
threshold for registration from annual turnover of Rs.10 lakh to Rs.20 lakh. The Council approved
this suggestion as well as the proposed amendment to include names of four more States, namely
Arunachal Pradesh, Himachal Pradesh, Meghalaya and Uttarakhand in Explanation to Section 22
of the CGST Act, 2017.
(vi) S. No. 46 of Presentation relating to new Section 10 (3A) of GST (Compensation to States),
Act, 2017: The Hon’ble Chairperson suggested that the proposed formulation should have more
flexibility. Instead of providing that the amount remaining unutilised in the Fund shall be
distributed between the Centre and the States, the law should provide that such amount may be
distributed between the Centre and the States, as the Council may decide. He suggested to change
the phrase ‘distribute the amount remaining unutilized in the Fund’ to ‘distribute such amount
remaining unutilized in the Fund’. The Council agreed to this proposal.
(vii) S.No.1 of Table relating to Returns: The Hon’ble Chief Minister of Puducherry suggested
that this proposal should be examined further. The Hon’ble Minister from Assam stated that this
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was only an enabling provision and it could be agreed upon. The Council agreed to the
formulation shown in the presentation.
14.13. The Hon’ble Deputy Chief Minister of Delhi stated that the report of the Law Review
Committee should be tabled in the Council along with the reasons as to why its 46 proposals were not
considered. He also suggested that the website link containing the proposed 1270 suggestions received
from the stakeholders on the proposed changes to the GST Law should also be shared with the States.
He further suggested that the report of the Law Review Committee should not be closed. The
Commissioner (GST Policy Wing), CBIC pointed out that these suggestions were available on the
MyGov.in portal of the Government of India. The Council approved the proposals of the Hon’ble
Deputy Chief Minister of Delhi.
15. For Agenda Item 6(i), the Council approved the following:
15.1. Amendments in the CGST Act, 2017; IGST Act, 2017; UTGST Act, 2017; and GST
(Compensation to States) Act, 2017 as proposed in the presentation attached as Annexure 4 to the
Minutes with the following changes:
(i) To amend Section 7 of CGST/SGST Act, 2017 (as mentioned at S. No. 6 and S. No. 7 of the
Presentation) with retrospective effect;
(ii) To reword the formulation relating to Section 17(5)(a) and new (aa) and (b) of CGST/SGST
Act, 2017 (as mentioned at S. No. 17 of the Presentation) in consultation with the Union Ministry
of Law;
(iii) To reword the formulation in Section 22 of the CGST Act, 2017 (as mentioned at S. No. 19 of
the Presentation) in order to have an enabling provision to increase the annual turnover threshold
for registration up to Rs.20 lakh for all the Special Category States;
(iv) To change the phrase ‘distribute the amount remaining unutilized in the Fund’ to ‘distribute
such amount remaining unutilized in the Fund’ in new Section 10 (3A) of GST (Compensation to
States), Act 2017 ((as mentioned at S. No. 46 of the Presentation);
15.2. To make suitable modifications in the draft formulations as per the advice of the Union Law
Ministry.
15.3. To table the Report of the Law Review Committee in the Council along with the reasons why
its proposals were not considered along with the website link containing the suggestions to the proposed
changes in the GST law;
15.4. To keep open for the consideration of the Council the suggestions of the Law Review
Committee not accepted till now.
15.5. To submit before the Council, Report of every Committee set up by it.
Agenda Item 6(ii): Creation of Goods and Service Tax Appellate Tribunal (GSTAT)
16. The Secretary invited the Joint Secretary, Department of Revenue, to introduce the agenda item.
The Joint Secretary, Department of Revenue, stated that the draft rules of Goods and Service Tax
Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2018
was approved by the GST Implementation Committee (GIC). He informed that during the Officers
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meeting held on 20 July 2018, Shri Arun Kumar Mishra, Additional Secretary, Commercial Tax
Department, Bihar had pointed out that Rule 3 of these Rules would require some modification in view
of the fact that the Rule referred to three different Selection Committees, but sub-Rule 4 provided for
Convenor for only two Committees and this could be suitably modified. The Council approved this
proposal. He further stated that it was proposed to constitute a GST Appellate Tribunal (GSTAT)
National Bench at New Delhi and three Regional Benches at Mumbai, Chennai and Kolkata and after
seeking the recommendations and approval of the GST Council, approval would be taken for creation
of necessary posts of Chairman and Members.
16.1. He requested the Council to approve the following:
i) Constitution of Goods and Service Tax Appellate Tribunal (GSTAT); and
ii) Creation of National Bench of GST Appellate Tribunal at New Delhi and three Regional Benches
at Mumbai, Chennai and Kolkata.
16.2. The Council approved the above proposals.
17. For the Agenda Item 6(ii), the Council approved the following:
i) Constitution of Goods and Service Tax Appellate Tribunal;
ii) Creation of National Bench of GST Appellate Tribunal at New Delhi and three Regional Benches
at Mumbai, Chennai and Kolkata; and
iii) Modification of sub-Rule 4 of Rule 3 of GST Appellate Tribunal (Appointment and Conditions
of Service of President and Members) Rules, 2018 in order to provide for Convenors for all three
Selection Committees.
Agenda Item 6(iii): Simplification of GST Returns
18. The Hon’ble Chairperson observed that there had been some concern amongst the small
taxpayers about the number of returns and the amount of paper work that they needed to do in GST
regime. He observed that the new process should be such as to make the return filing a delightful
experience for small taxpayers. He added that the Council should send a message that it cared for small
and medium enterprises. The Secretary invited Shri Manish Kumar Sinha, Joint Secretary (TRU-II),
CBIC, to make a presentation on this Agenda item.
18.1. The Joint Secretary (TRU-II), CBIC, made a presentation on the subject (attached as Annexure
5 to the Minutes). He stated that the Council during its 27th meeting held on 4 May 2018 had approved
the basic principles of GST return filing and directed the Law Committee to finalise the return. Based
on the decisions of the Council and guidance of the Group of Ministers (GoM) on IT Challenges in GST
Implementation, the GST Law Committee had further detailed the GST return, which was placed before
the Council for approval. He informed that during the process of finalization of return format, wide
consultations were held with trade and GST compliance community and their inputs had been duly
incorporated in the return design. GSTN and the implementing IT Company i.e. Infosys were also part
of the return design process and are fully on board for the proposed design.
18.2. The Joint Secretary (TRU-II), CBIC, explained the key features of the return. He stated that
there would be only one monthly return for all taxpayers excluding small taxpayers with annual turnover
below Rs.1.5 crore and Input Service Distributor (ISD), etc. There would be an optional provision of
quarterly return filing for small taxpayers with annual turnover below Rs.1.5 crore, but they would need
to pay tax on monthly basis. The due date for filing return by a large taxpayer shall be 20th of the next
month whereas the due date for smaller taxpayers shall be 25th of the next month. The taxpayers having
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no output tax liability and no input tax credit would also have a facility to file return through SMS.
Facility for continuous upload of invoices by the supplier and viewing by the recipient along with tax
payment status of an invoice shall also be available. On locking those invoices, the recipient can avail
the input tax credit. In cases where no return is filed after uploading of the invoices, it shall be treated
as self-admitted liability of the supplier, after the due date of filing of that return.
18.3. Invoices uploaded by the supplier before 10th of the next month shall be posted for viewing by
the recipient by 11th of next month. He stated that earlier the paper invoice was adequate to avail the
credit but now the uploaded invoices would become a necessary and mandatory condition for availing
credit and to that extent, one was moving towards system-based credit. Hence credit control would
improve. The IT tool would be provided for continuous uploading of invoices. IT tool/facility for
matching of the invoices downloaded from the viewing facility of the buyer shall also be provided.
There shall be a system for locking of invoices which basically means acceptance of transactions by the
recipient before filing of his return. Locked invoices cannot be amended. Provision for pending invoices
facility was proposed to be incorporated in the return in view of the large tax payers, particularly large
manufacturing setups, because they have a cycle in which they examine the inventory etc. and they
decide on the credit availability, ineligible credit and reversal etc. He further explained that pending
invoices are invoices which have been uploaded by the supplier for which supplies have not been
received or the recipient is of the view that invoice needs amendment or where he is not able to decide
to avail the input tax credit. He highlighted that a major change proposed was that no input tax credit
can be availed by the recipient where goods or services have not been received before filing of a return
by the supplier. This would reduce the number of pending invoices for which input tax credit is to be
taken. There would be no automatic reversal of input tax credit at the recipient’s end where tax had not
been paid by the supplier. Revenue administration shall first try to recover the tax from the seller and
only in some exceptional circumstances like missing dealer, shell companies, closure of business by the
supplier, input tax credit shall be recovered from the recipient by following the due process of serving
of notice and personal hearing. He stated that though this would be part of IT architecture, in the law
there would continue to be a provision making the seller and the buyer jointly and severally responsible
for recovery of tax, which was not paid by the supplier but credit of which had been taken by the
recipient. This would ensure that the security of credit was not diluted completely.
18.4. He also explained that in the present return design, GSTR-3B could not be amended but in the
new return design, there would be a facility for amendment of invoice and other details filed in the
return. Maximum two amendments of return would be allowed for each tax period till the month of
September of the next Financial Year. Along with the amendment of return, payment of tax shall also
be allowed to save the interest liability of the taxpayer and the negative tax liability would be taken to
next tax period. In order to bring in some discipline in return filing, it was proposed to charge a late fee
(after some time of implementation of new return) if the amendment return involved change in liability
of tax by more than 10%. He stated that the table for export of goods in return would also contain details
of shipping bills, but this information could be filed even after filing the return by using a separate
facility for correcting details of Shipping Bills without considering it as amendment, and therefore the
taxpayer would not be considered to have exhausted his opportunities for amendment of return.
Subsequently, once the data was complete, the same would be transmitted to ICEGATE for processing.
He stated that a provision of ‘supply side control’, that is some limit / red flags would be introduced for
newly registered taxpayers and the taxpayers who had defaulted in payment of tax beyond a time period
and/or those who pushed credit in the system beyond a threshold. For defaulting taxpayers, it is proposed
that after two defaults, that is, if he has not paid tax for the months of April and May (upto June return),
then July month onwards, his invoices could not be seen by the buyer and credit flow would be blocked.
For such cases, uploading of invoices shall be allowed only after the default in payment of tax was made
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good. He stated that return format shall have two tables - one from which tax liability arose and the
other for availing input tax credit. Some additional details would be captured for ascertaining the
turnover and details of capital goods credit.
18.5. He further explained that the return would be profile based and a questionnaire shall be used to
profile the taxpayers and only that part of return shall be shown to him which matched his profile. First
such profile was for those who were to file ‘Nil’ return. The Hon’ble Chairperson observed that for
‘Nil’ return filing, it should be clearly stated that ‘Nil’ return means ‘no purchase and no sale’. The Joint
Secretary (TRU-II), continuing his presentation, stated that invoice upload table was similar to present
GSTR-1 Table - it captured the basic information such as tax rates, taxable value and tax payable and it
did not capture HSN. The HSN details for the large taxpayers would be captured in a separate table with
appropriate validation to ensure good data quality. He also showed the formats of the main Table and
the annexure to the main return.
18.6. The Joint Secretary (TRU-II) further informed that there shall be a quarterly return for taxpayers
having annual turnover up to Rs.1.5 crore. This would benefit about 83% of taxpayers. He stated that
one of the key concerns for quarterly return was the delay in settlement of tax to States but it was
proposed to be addressed by providing a facility for filing of quarterly return to small taxpayers with
monthly payment of tax and availing input tax credit on self-declaration basis. He stated that even for
small taxpayers, settlement of funds to the extent of 90% would be monthly as IGST utilisation for
CGST or SGST constituted 90% of the settlement. He pointed out that 85% of the business took place
within the sphere of large taxpayers, 12.3% of the business took place between the large taxpayer and
the small taxpayer and transaction between two small tax payers was approximately only 2.2%. The
credit utilization by the small taxpayers/businesses was also lower than that for medium and large
businesses.
18.7. The Joint Secretary (TRU-II), CBIC stated that there would be further simpler quarterly return
available for small traders who make only Business to Consumer (B2C) supplies or only Business to
Business (B2B) plus Business to Consumer (B2C) supplies. The return format for B2C suppliers was
proposed to be called SAHAJ and for B2B plus B2C suppliers, it was proposed to be called SUGAM.
He also stated that small taxpayers would have the option to continuously upload the invoices to enable
their purchasers to avail input tax credit. He informed that the key feature of SAHAJ and SUGAM
would be that some of the details required in other returns had been dropped and such information shall
be collected only in the annual return, such as HSN details, details of non-GST supply and capital goods
credit. He stated that in this return, there shall be no details for pending and missing invoices as small
taxpayers shall typically have only 10-12 invoices and they would not tend to roll over their input tax
credit for the next month. He stated that this simple format would reduce the compliance cost for small
taxpayers. He stated that originally it was proposed that at the beginning of financial year, a taxpayer
would need to opt for this form of return and he could not change this option during the entire financial
year. However, during the Officers meeting held on 20 July, 2018, it was decided that one exit option
should be given to a taxpayer to switch over from filing monthly return to quarterly return and vice versa
at the beginning of any quarter. The Joint Secretary (TRU-II) also showed the structure of the SAHAJ
and SUGAM formats.
18.8. In view of the above discussions, he proposed that the Council may approve the following:
(i) The monthly and quarterly returns as proposed, including SAHAJ and SUGAM;
(ii) The key features of two formats may be placed on the public domain for information;
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(iii) Features and formats to be finalized with amendments based on inputs received from various
quarters such as officers, trade, IT Company, etc. The Council may authorize GIC to approve the
final format; and
(iv) The final provision in law to be finalized in consultation with Ministry of Law and after
receiving inputs from various quarters and to be approved by GIC.
18.9. Initiating the discussion on this agenda item, the Secretary stated that this item was discussed
extensively in the Officers meeting of 20 July, 2018 and large number of officers were in favour of
quarterly return and some even suggested a more liberal idea of even quarterly payment of taxes for
those filing quarterly return. The Hon’ble Deputy Chief Minister of Bihar stated that the proposed
quarterly return with monthly payment of tax would be a historic decision. He stated that the same
format of quarterly return and monthly payment of tax was followed in Bihar during the VAT regime
and it would be good to introduce the same under GST. He stated that originally, the stumbling block
for this idea was that it would obstruct monthly settlement of funds to the States and it was good that a
solution was found for the same. He observed that this new return format would benefit the small
taxpayers. He suggested that return format should be placed in public domain so that ideas could be
obtained for further simplification. He also stated that adequate time should be given for transition and
software development of the new return format. The Hon’ble Chairperson stated that the new return
format could be put in public domain for one month.
18.10. On enquiry by the Hon’ble Chairperson regarding time taken for development of software, Shri
Prakash Kumar, CEO, GSTN informed that they would need about six months’ time to develop the
software after specifications are frozen. The Secretary stated that GSTN was already working on the
software development and the aim would be to introduce the new return format from 1st January 2019
on best effort basis. The CEO, GSTN stated that the return design should be finalized quickly because
it becomes very difficult to first make software and then make further changes. He raised the issue
regarding integration of refund process in the new return design which requires deliberation. The
Hon’ble Chairperson stated that all these aspects should be addressed and the new return format should
be finalized expeditiously. The Hon’ble Deputy Chief Minister of Bihar stated that taxpayers should
also be given time of 2-3 months to practise the return filing in the new format before legally
implementing it. He added that till such time that the new return software was available, the present
system of GSTR-3B and GSTR-1 should continue.
18.11. The Hon’ble Deputy Chief Minister of Bihar observed that quarterly return was proposed only
for those taxpayers having an annual turnover of Rs.1.5 crore. Most taxpayers within this threshold
might opt for Composition scheme. He suggested that considering this, benefit of filing quarterly return
should be extended to taxpayers with annual turnover up to Rs.5 crore. He observed that in Bihar and
eastern Uttar Pradesh, several traders had turnover of two to three crore but they were still small dealers.
They should also get the benefit of filing quarterly return. The Hon’ble Chairperson supported this
suggestion and said that this would improve the compliance environment and would encourage filing of
more returns. The Hon’ble Deputy Chief Ministers of Gujarat and Delhi and the Hon’ble Ministers from
Uttarakhand, Assam, Punjab, Chhattisgarh, and Arunachal Pradesh supported the suggestion of the
Hon’ble Deputy Chief Minister of Bihar. The CCT, West Bengal, the CCCT, Andhra Pradesh, and the
Principal Secretary (Finance), Jammu & Kashmir also supported this proposal. The Hon’ble Minister
from Tamil Nadu supported the proposal in principle subject to its approval by the Law Committee.
18.12. The Advisor (Financial Resources), Punjab stated that the provision for monthly payment of tax
would lead to difficulty for taxpayers to estimate the amount of tax to be paid in advance. He further
suggested that the provision in the law making the buyer and the seller jointly and severally responsible
for input tax credit availed on which tax was not paid by the suppliers was not a very good formulation
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as tax administration would tend to straightaway go after the recipient for recovery of tax not paid by
the supplier. He stated that it should be carefully worded and a better formulation would be to provide
that the liability would be first on the seller and if he fails to pay, then the liability would be of the
recipient. He further stated that some eminent economists had suggested that all taxes could be paid on
reverse charge basis. The Hon’ble Chairperson observed that such new scheme could not be considered
at this stage. He further observed that even Directors of the Companies were jointly and severally
responsible. The Hon’ble Chief Minister of Puducherry supported, in-principle, the proposal to extend
the benefit of filing quarterly returns to taxpayers having annual turnover up to Rs.5 crore but suggested
that it should be further examined. The Hon’ble Deputy Chief Minister of Delhi stated that earlier too,
on many occasions, he had suggested to have a system of filing quarterly return and monthly payment
of tax for all taxpayers.
18.13. The Secretary stated that 13% of the Revenue came from taxpayers with annual turnover below
Rs.5 crore and if the benefit of quarterly return was extended for taxpayers with annual turnover up to
Rs.5 crore, it would lead to benefit for additional 10% of taxpayers (coverage of taxpayers would
increase from 83% to 93%) but the tax involved would be around 13% of the total collection whereas
for tax payers up to Rs.1.5 crore annual turnover, it involved about 6% of total revenue. The Hon’ble
Chairperson stated that 7% revenue was not such a high figure and the turnover threshold for filing
quarterly return could be increased. The Secretary stated that one apprehension was that the taxpayers
eligible to file quarterly return would pay very nominal amount of tax in the first two months and this
would defer collection of 7% of tax revenue by two months and this could cause loss to the smaller
States. The Hon’ble Chairperson stated that a provision could be made for charging interest if the tax
payment was low. Secretary stated that Maharashtra had earlier proposed that for 83% taxpayers whose
annual turnover was less than Rs.1.5 crore, they could also be allowed to make tax payment quarterly
along with filing of quarterly returns. The Hon’ble Chairperson also mooted the idea that since the tax
collection for taxpayers of annual turnover up to Rs.1.5 crore was very small whether they could be
allowed to pay tax quarterly. CCT, Gujarat stated that the system of monthly payment should be kept,
as in its absence, revenue of smaller States of North East would suffer. The Hon’ble Deputy Chief
Minister of Bihar stated that monthly payment of tax should be adopted. The Hon’ble Chairperson stated
that there should be monthly payment of tax and a provision for filing return on quarterly basis.
18.14. The Hon’ble Minister from Odisha stated that the proposal needed more time for study. The
Hon’ble Minister from Kerala stated that he did not support the proposal to increase the threshold for
quarterly filing of return to taxpayers having annual turnover of up to Rs.5 crore. He stated that this
proposal needed deeper study and consultation and it should be deferred. The Hon’ble Chairperson
sought to understand the problem that Kerala foresaw in accepting the proposal. Shri Rajan Khobragade,
CCT, Kerala stated that this would delay IGST settlement by three months. The Hon’ble Chairperson
stated that there would be provisional settlement till that time. He stated that increase of threshold to
Rs.5 crore would lead to increased compliance for smaller taxpayers and thresholds could not be
increased in a staggered manner as the technology could not be changed periodically. The Hon’ble
Chief Minister of Puducherry supported the view of Kerala. He stated that the idea of quarterly return
and monthly payment of tax was dangerous as the taxpayers would pay only notional amount in the first
two months and bulk of the tax would be paid in the third month. The Hon’ble Chairperson stated that
one option was that the taxpayer should make an estimate of his tax liability for the quarter and pay one
third of the tax every month. Shri Tuhin Kanta Pandey, Additional Chief Secretary (ACS), Odisha stated
that taxpayers would not be able to estimate their potential turnover in advance. He also stated that
Rs.1.5 crore annual turnover threshold was based on the threshold limit for Composition scheme. After
further discussion, the Council agreed that taxpayers up to annual turnover of Rs.5 crore would file
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quarterly return and pay tax monthly and that the Law Committee would examine how to ensure that
taxpayers did not pay less amount in the first two months of the quarter.
18.15. The Hon’ble Chairperson also made a reference to ‘briefcase companies’ who sell goods
enabling the recipient to take input tax credit and vanish after 2 to 3 months. He observed that if such
companies were not traceable, then the recipient who had used the input tax credit would be liable to
pay the tax even though he might have paid the tax to the seller. He suggested that to address this
problem, one option could be that when a buyer was purchasing goods from an unknown seller or a new
seller, he should obtain his GSTIN and make payment of tax to the Government and pay rest of the
amount to the seller. The Joint Secretary (TRU-II), CBIC stated that there could be problem for the
seller to offset his input tax credit. The Hon’ble Chairperson stated that if the seller did not agree to this
term, then the purchaser was free not to enter into transaction with him. The Joint Secretary (TRU-II),
CBIC pointed out that the seller could ask for refund of accumulated input tax credit and this also may
need to be built into the refund mechanism or to permit him to use credit for other supplies. The Hon’ble
Chairperson stated that a provision for purchaser to pay tax on behalf of seller would solve the problem
of fly by night operators. Dr. P.D. Vaghela, CCT, Gujarat stated that this option was also examined by
the Law Committee earlier and that this could possibly be implemented by allowing credit to the
purchaser. The Hon’ble Chairperson stated that the Law Committee should examine how to implement
such a provision.
19. For Agenda Item 6(iii), the Council approved the following:
i) The return design and format of monthly and quarterly returns including the SAHAJ and the
SUGAM as contained in Presentation at Annexure 5 of the Minutes;
ii) The benefit of filing quarterly return shall be available to taxpayers with annual turnover of up to
Rs.5 crore but they shall pay tax monthly;
iii) The Law Committee to suggest a method to ensure that taxpayers availing the benefit of filing
quarterly tax return pay the correct estimated amount of tax every month and to charge interest
where tax paid in any month was less than the value of supply declared in that month;
iv) To put the key features and the formats of the new returns in the public domain for one month to
seek comments;
v) Final features of the return formats to be finalized with any minor amendments due to inputs
received from various stakeholders with the approval of the GIC;
vi) The final provision in the Law in relation to Returns to be finalized in consultation with the
Ministry of Law and on the basis of other inputs received to be finally approved by GIC;
vii) The new return format will be implemented from 1st January 2019 on best effort basis; and
viii) The Law Committee to examine to introduce a provision in the GST Law to allow a buyer to
pay tax for the supplies received from a new or unknown supplier.
Agenda Item 7: Issues recommended by Fitment Committee for consideration of GST Council
20. The Secretary invited Shri G.D Lohani, Joint Secretary (TRU-I), CBIC to introduce the agenda
item. The Joint Secretary (TRU-I), CBIC stated that representations received from various stakeholders
including Ministries and Secretaries and other officers of the Centre and the States seeking changes in
GST rates and clarification regarding applicability of GST rates on supply of goods/services, were
considered by the Fitment Committee in its meeting on 9 and 10 July 2018 and its recommendations is
at Annexure I of Agenda Note 7. Fitment Committee also considered the GST rate on Handicraft items
as identified by the Handicraft Committee and it made certain recommendations for changes in GST
rates and for issuing clarification in relation to goods which is at Annexure II of Agenda Note 7. Issues
relating to changes in GST rates or for issuance of clarification in relation to Services is at Annexure-III
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of Agenda Note 7. Issues where the Fitment Committee felt that further examination was required is at
Annexure-IV; issues where no changes were proposed in relation to goods is at Annexure V: and issues
where no changes were proposed in relation to services is at Annexure VI of Agenda Note 7. The
Council took up discussion in relation to proposals for change in rates covered under various annexures
as well as on some other goods. The discussions are summarized as below:
Annexure-I and some other goods
Marble/Stone Deities (Sl. No 2):
(i) The Hon’ble Deputy Chief Minister of Delhi expressed an apprehension that exemption of tax on
marble/stone deities could open doors for loss of revenue as such taxpayers were also trading in
tiles. The Hon’ble Chairperson stated that small artisans were unable to keep books of account
and their accounts were also opaque. He observed that in this segment, there would be very few
manufacturers with large turnovers. It was important to reduce the compliance cost for the larger
number of smaller artisans as the cost of collection from smaller artisans was higher than the
revenue earned. He added that the proposal did not cover deities made of glass and metal as these
were machine made. The Hon’ble Minister from Odisha suggested that deities made of wood
should also be included in this exemption category as images of Lord Jagannath was made of
wood. The Hon’ble Deputy Chief Minister of Delhi observed that including deities made of wood
would have an environmental angle of cutting of trees. The Hon’ble Chairperson observed that
these were small artisans and the proposal of the Hon’ble Minister from Odisha for inclusion of
deities made of wood in the exempted category could be accepted. The Council approved the
recommendation of the Fitment Committee to exempt tax (from the existing rate of 12%) on
marble/stone deities as well as deities made of wood.
Sanitary Napkins (Sl. No. 3):
(ii) The Hon’ble Chief Minister of Puducherry supported the proposal to exempt sanitary napkins
and stated that in the earlier Council meetings too, he had always argued to exempt sanitary
napkins from tax. The Hon’ble Minister from Maharashtra congratulated the Council for coming
up with this proposal. The Council approved the proposal to exempt Sanitary Napkins (existing
rate 12%).
Hand Operated Rubber Roller (Sl. No. 26):
(iii) The Hon’ble Minister from Kerala stated that hand operated rubber roller was an agricultural
implement and most of agricultural implements were exempted from tax. The Joint Secretary
(TRU-I) stated that only agricultural implements such as spades, shovels and hoes falling under
Chapter 82 were exempt from tax whereas those falling under the category of machine were taxed
at the rate of 18%. He added that in the Fitment Committee, there was no proposal to reduce the
rate of tax on Hand Operated Rubber Roller and the issue was only to clarify the correct
classification of the item. The Hon’ble Minister from Kerala suggested that this item should be
taxed at the rate of 5%. The Joint Secretary (TRU-I) stated that no goods under Chapter 8420
were taxed at the rate of 5% and Chapter 8420 covered a lot of other items. Reduction of tax rate
on only item under this Chapter heading could lead to other distortion in rates. CCT, Gujarat
stated that other sectors falling under this Chapter heading would also request for reduction of tax
rate and suggested that the rate should be kept at 18%. The Hon’ble Minister from Assam stated
that since Chapter 8420 contained several other items which attracted tax at the rate of 18%, it
would be better that the Fitment Committee examined the issue further. Joint Secretary (TRU-I)
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stated that presently the item was classifiable under Chapter heading 8420 and any change in the
rate would need a separate carve out within this Chapter heading. The Hon’ble Chairperson
observed that since it was used by poor farmers, the Council should respect the request of the
Hon’ble Minister from Kerala and reduce the rate from 18% to 12%. The Fitment Committee
should study the possibility to further reduce this rate to 5%. The Council agreed to this
suggestion.
Kota Stone, Sand Stone and similar quality of local stones ( Sl No.20):
(iv) Shri J. Syamala Rao, Chief Commissioner, Commercial Taxes (CCCT), Andhra Pradesh stated
that the Fitment Committee proposal was to increase the rate of tax on some items which was
presently at 5% to 12%. He stated that there were similar stones in Andhra Pradesh and they were
presently taxed at the rate of 5%. The Joint Secretary (TRU-I) stated that the structure of the
Harmonized System (HS) Code was devised in a sequential manner where it covered the raw
materials first and then the processed products. He stated that the stones fall into two Chapters –
stones which were quarried and not worked other than simple cutting (quarry level cutting) were
classified under Chapter 25 and taxed at the rate of 5%. The other Chapter 68 covered further
worked up stones. He further stated that raw and merely sawn/cut Kota and similar stones fall
under Chapter 25. He further stated that after quarrying, when such stones were further processed,
worked (other than mere sawing/cutting), then it was classified under Chapter 68 and rate of tax
on goods falling under Chapter 68 was earlier brought down from 28% to 12%. He informed that
reference regarding Kota Stone came from Rajasthan. It was a layered stone which could be sold
as such. He stated that as the rate differentials between different types of stones led to
classification disputes, the Fitment Committee proposed to levy a uniform rate of tax of 12% on
all types of stones. He informed that representations were also received on similar lines, as
otherwise the rate differential would lead to misclassification and the risk of goods being cleared
at the lower rate. CCCT, Andhra Pradesh stated that in their State, there was a demand to reduce
tax on Napa slabs, which was similar to Kota stone and, therefore, rate of tax should not be
increased.
(v) The Hon’ble Minister from Rajasthan stated that sand stones and lime stones were used by
relatively lower class of people and this should be taxed at a lower rate whereas mirror polished
tiles which are the replacement for high grade granite tiles, etc. could be taxed at the rate of 18%.
He also showed physical samples of rough and polished Kota stones. The Hon’ble Chairperson
observed that small stones which are not polished should be taxed at the rate of 5%. He stated
that the Fitment Committee, in consultation with the officers of Rajasthan and Andhra Pradesh,
should work out a definition and scope of polished stone which could be kept at a higher rate
while stones which were not polished but cut and smoothened should be kept at 5%. The Hon’ble
Minister from Chhattisgarh observed that relatively cheaper stones called ‘farshi pathar’ was
being taxed at the rate of 18% and as a result, market for such stones had come down leading to
loss of employment for almost 50,000 persons. He stated that this item be taxed at the rate of 5%.
The Hon’ble Chairperson observed that the rate of tax affected all the States. He observed that
rough stones are used by poor people and only after polishing, they become finished stones. He
observed that finished stones should be charged to tax at the rate of at 18%, whereas unfinished
stones (other than marble and granites) should be charged to tax at the rate of 5%.
(vi) Dr. T.V. Somanathan, CCT, Tamil Nadu stated that stone tiles were a highly evasion prone
commodity and the tax rate should be such as to prevent revenue leakage by misclassification.
The Hon’ble Chairperson observed that cottage industry would need to be protected even at the
risk of some revenue loss and he suggested that rate of tax should be 5% for such rough and
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unfinished stone. The CCT, Tamil Nadu observed that some high-quality stones were also used
by rich persons. The Hon’ble Chairperson observed that such consumption would not be perhaps
more than 1% of the total consumption. He stated that since there was no concept of maximum
retail price in GST, there could be some loss of revenue at retail level. After discussion, Council
agreed that Kota stone and similar stones (except marble and granite) other than those which are
polished shall be taxed at the rate of 5% while finished/polished Kota stone and similar stones
shall be taxed at the rate of 18% and that a definition/scope of polished stone shall be drafted by
the Fitment Committee in consultation with the officers of Rajasthan and Andhra Pradesh.
Refund of input tax credit on fabrics on account of inverted duty structure
(vii) The Hon’ble Minister from Maharashtra stated that their State had large scale textile industry
which did not suffer any taxation earlier. Presently, refund of input tax credit on account of
inverted duty structure was blocked on fabric which attracted tax at the rate of 5% whereas the
raw materials, namely, yarn, attracted tax at the rate of 12%. He stated that many areas in his
State like Bhiwandi, Malegaon and Yavatmal, etc. were badly affected. He pointed out that big
textile suppliers were getting the benefit of input tax credit due to integrated supply chain, but
small units were suffering. The Hon’ble Chairperson stated that this issue was also raised when
he visited West Bengal.
(viii) Ms. Smaraki Mahapatra, CCT, West Bengal stated that textile issue was an all-India based issue
and it should be considered a little more. She further stated that the initial suggestion was to keep
cotton and other natural textile at 5% and to tax man-made textile at the rate of 12% and 18%.
However, decision was to keep the rate of tax on textile at 5%, and to block the refund of the input
tax credit accumulated as a result of inverted duty structure. If full input tax credit was allowed,
it would lead to a situation of large scale refund. The Hon’ble Deputy Chief Minister of Gujarat
stated that in Surat, textile industry was badly affected and almost 50% of the power loom industry
had shut down. There was no tax on textile earlier and refund must be given for inverted duty
structure on fabrics. The Hon’ble Minister from Rajasthan stated that the current rate structure
of yarn to fabric had created a difference in tax treatment between integrated textile units and
stand-alone textile units. He suggested that there could be three solutions to this problem namely:
(i) yarn be taxed at the rate of 5%; (ii) manmade fabrics be taxed at the rate of 12% instead of
18%; (iii) blocked input tax credit may be released.
(ix) The ACS, Odisha stated that workers from his State employed in Gujarat were badly affected
because of shutting down of textile industry. The Hon’ble Minister from Assam stated that textile
industry was very badly affected and even if there was revenue loss on account of refund of input
tax credit on account of inverted duty structure, it should be borne for the sake of protecting
employment. The Hon’ble Minister from Chhattisgarh endorsed this view and stated that
employment was a higher priority than tax revenue. The Hon’ble Minister from Haryana also
supported the proposal and stated that this would improve compliance. The Hon’ble Deputy Chief
Minister of Bihar stated that there was no tax on textiles since 1956. After phasing out of CST,
States were given power to levy tax on textile, sugar and tobacco, but no State could levy tax on
these items. When tax was levied on textiles in Madhya Pradesh, there was a strike and the same
situation was also created in Bihar. Under GST regime also, the textile sector had opposed levy
of GST. He stated that the suggestion of the Hon’ble Minister from Maharashtra deserved
consideration. He also informed that workers from Bihar were returning from Surat due to
shutting down of factories. He suggested to find a solution to the release of refund of blocked
input tax credit. The Hon’ble Minister from Rajasthan stated that textile units were also facing
problem in filing FORM ITC-04 in case of yarn. The Hon’ble Chairperson stated that the proposal
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of Maharashtra supported by many other States should be considered. He expressed that loss of
revenue would be made up by improved compliance and they would now be encouraged to issue
invoices for their transactions. He suggested that refund of input tax credit on account of inverted
duty structure should be allowed in the textile sector. However, this amendment should not come
into effect retrospectively and there should be a mechanism to lapse the input tax credit lying in
balance on the date of the notification implementing the new provision. He suggested that this
amendment could be implemented from a prospective date and the purchases made after the issue
of notification should only be allowed refund of input tax credit and input tax credit lying in
balance should lapse. The Council agreed to this suggestion.
Fertilizer grade Micro nutrients and Fertilizer grade Phosphoric Acid:
(x) CCT, Tamil Nadu suggested that rate of tax on fertilizer grade micro nutrients and fertilizer grade
phosphoric acid be reduced from 12% to 5%. Secretary stated that micro nutrients and fertilizer
grade phosphoric acid, etc. were very broad categories of products and tax reduction should not
be considered. The Hon’ble Chairperson stated that the suggestion of Tamil Nadu should be
considered for reduction of tax on fertilizer grade phosphoric acid from 12% to 5%. The Council
agreed to this suggestion.
Pickle
(xi) The Hon’ble Minister from Tamil Nadu suggested that pickle should be exempted from tax as
was also suggested by the Hon’ble Chief Minister of Puducherry in earlier Council meetings. The
Hon’ble Deputy Chief Minister of Bihar and the Hon’ble Minister from Goa suggested that
exemption of tax on pickles should be considered by the Fitment Committee. The Hon’ble
Chairperson observed that all food processing items should be promoted as total revenue from
these items other than from bread and bakery products was not very significant. He stated that
tax reduction would encourage the cottage industry in this segment. The Hon’ble Minister from
Goa stated that he had been consistently requesting for reduction in rate of tax on cake as it was
also a cottage industry in his State. The Joint Secretary (TRU-I) informed that pickle attracted
12% rate and all processed food, similarly placed, attracted a tax rate of 12%. Reducing rate of
tax on pickle would invite requests for reduction of rates for all these items, which would have a
significant revenue implication. The CCT, Gujarat stated that many food products were taxed at
the rate of 18% and this needed further examination. After discussion, Council agreed that rate
of tax on pickle, cakes and other processed food products shall be reviewed by the Fitment
Committee.
Ethanol
(xii) The Hon’ble Minster from Assam suggested that rate of tax on ethanol should be reduced from
12% to 5%. Joint Secretary (TRU-I) stated that in the Fitment Committee, request for reduction
in rate of tax on ethanol was from 18% to 12%. The Secretary stated that since the rate of tax on
bio-diesel was 12%, ethanol for blending with petrol could also be taxed at the rate of 12%. The
Hon’ble Chairperson observed that ethanol used for blending in petroleum products would help
reduce import dependence. He suggested that rate of tax on ethanol supplied to Oil Marketing
Companies could be reduced to 5%. The Hon’ble Minster from Tamil Nadu supported the
proposal and stated that this would be a substitution for petrol and diesel. Shri Vivek Kumar,
Addl. Commissioner, Commercial Tax, U.P. stated that if the rate of tax on ethanol for blending
with petroleum products was brought down to 5%, the distilleries would face shortage of raw
material. The Hon’ble Deputy Chief Minister of Bihar stated that this fear was unfounded as Oil
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Marketing Companies could not procure the full production of ethanol in the country. The
Council agreed to reduce the rate of tax on ethanol for sale to Oil Marketing Companies for
blending with motor spirit from 18% to 5%.
Zip and slide Fasteners:
(xiii) The Hon’ble Chairperson stated that he had received a request to bring down the rate of tax on
zip and slide fasteners from the current rate of 18%. The Hon’ble Deputy Chief Minister of Bihar
suggested that the rate of tax could be brought down to 12%. The Hon’ble Minster from Rajasthan
supported this proposal. The Council agreed to reduce the rate of tax on zip and slide fasteners
from 18% to 12%.
Nicotine Gum:
(xiv) The Hon’ble Deputy Chief Minister of Gujarat stated that to quit smoking habit, Nicotine
Polacrilex Gum is used and the present rate of tax on this item was 18% which should be reduced.
The Hon’ble Chairperson stated that this may be examined by the Fitment Committee. The
Council agreed to this suggestion.
Eggs:
(xv) The Hon’ble Chairperson stated that the Hon’ble Minster from Punjab had brought to his notice
that the rate of tax on egg was different for different categories. For example, egg was exempt
from tax, but egg white was taxed at the rate of 18%. The Secretary suggested that this issue
could be discussed in the Fitment Committee. The Hon’ble Minster from Goa stated that egg was
also used in cakes and cake was taxed at the rate of 18% while sweets were taxed at 5% which
was not logical. The Hon’ble Chairperson suggested that rate of tax on different categories of
eggs could be considered by the Fitment Committee as part of examination of rate of tax on
processed food products. The Council agreed to this suggestion.
Products consumed on cruise liners:
(xvi) The Hon’ble Chairperson stated that he was informed by the Hon’ble Minster from Kerala that
after levy of GST on products consumed on cruise liners, the tourists had stopped coming to
Kerala. Therefore, a proposal should be considered to exempt tax on products consumed on cruise
liners. The Hon’ble Minster from Kerala stated that earlier they did not levy VAT on products
consumed on cruise liners. The Hon’ble Chairperson stated that cruise liners have large tourism
potential, but one should be cautious that casinos should not get the benefit of tax exemption. He
suggested that the Fitment Committee should examine the proposal to exempt from tax products
consumed on cruise liners. The Council agreed to this suggestion.
Footwear:
(xvii) The Hon’ble Chairperson stated that high rate of tax on footwear was causing loss of jobs in
the footwear sector. The Joint Secretary (TRU-I) stated that the main problem in this sector was
the rate differential as footwear with retail price of less than Rs.500 per pair was being taxed at
the rate of 5% tax while other categories of footwear were being taxed at the rate of 18%. He
stated that request from trade was for rationalization of this rate structure. The Fitment Committee
had examined this issue and suggested to make the tax rate of all footwears uniform at 12%, but
some States objected to this proposal on account of revenue loss and the Fitment Committee had
requested for a study by CCTs of Uttar Pradesh and Haryana. The Hon’ble Deputy Chief Minister
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of Bihar stated that tax rate of 18% on footwear was leading to a bad perception of GST and the
rate should be brought down to 12%. He also suggested that 5% rate of tax should apply to
footwear sold for price up to Rs.1000 per pair. He stated that this would help improve the
perception of tax rate under GST in this sector. He further mentioned that people from the
Scheduled Caste community worked on leather shoes on job work basis and this should be taxed
at the rate of 5%.
(xviii) The Hon’ble Minster from Goa suggested that the rate of tax on all shoes should be brought
down to 5%. The Hon’ble Chairperson cautioned that this would lead to even big brands like
Adidas and Nike getting the benefit of a low tax rate. The Hon’ble Minster from Haryana stated
that footwear industry was strong in his State and footwear costing less than Rs.500 per pair was
earlier getting imported in large quantities from China but it was now getting exported from his
State to China. He stated that shoes costing more than Rs.500 per pair were normally used by
higher income groups and tax on this item should not be reduced. He suggested that Council
should wait for 18 months before considering change in tax rate as this was a high consumption
item. He further stated that there was also a need to balance the revenue considerations and that
the Fitment Committee should examine this proposal.
(xix) The Hon’ble Minster from Odisha stated that they had no leather industry in their State and it
was important to see the revenue implication. He suggested that 5% rate of tax should be kept
for footwear costing up to Rs.1000 per pair and other categories of footwear should be taxed at
the rate of 12%. The Hon’ble Chairperson suggested that footwear costing up to Rs.1000 per pair
could be taxed at the rate of 5% and those costing above Rs.1000 per pair could be taxed at the
rate of 12% and leather shoes could also be taxed at the rate of 5%. The CCT, Tamil Nadu stated
that this would have large revenue implication and it should be remembered that tax burden was
borne by the consumers and not poor workers. The Hon’ble Chairperson stated that the footwear
sector was being affected by cheaper imports. The Hon’ble Minster from Haryana suggested that
one option could be to increase the rate of Customs duty on imported footwear.
(xx) The Hon’ble Deputy Chief Minister of Bihar reiterated that tax rate of 18% on footwear was
very high and perception-wise, it had given a very bad image to GST. He repeated his suggestion
to apply the reduced rate of tax of 5% on footwear costing up to Rs.1000 per pair and12% on
footwear costing above Rs.1000 per pair. He added that one should also think about hand made
leather shoes. ACS, Odisha stated that it was not desirable to fix tax rates on the basis of different
classifications of footwear as it would complicate the tax structure. He also endorsed the view of
CCT Tamil Nadu that the rate of tax only impacted the consumers and not the workers in the
footwear sector. He added that the revenue implication of this proposal should be examined
thoroughly before taking a decision. He further observed that once tax rate on footwear was
brought down to 12%, it would be very difficult to increase it in future, even if required for
augmenting revenue.
(xxi) Shri Jagdish Chander Sharma, Principal Secretary (E&T), Himachal Pradesh stated that tax
rates based on value of sale was leading to large scale misdeclaration. He suggested that there
should be one rate of tax for all categories of footwear. He stated that rate of tax of 5% on
footwear costing up to Rs.1000 per pair would lead to greater diversion of footwear to this
category. The Hon’ble Deputy Chief Minister of Gujarat suggested that tax rate should be kept
at 5% for footwear sold up to Rs.1000 per pair, but for other categories, the present rate should
be maintained. The Hon’ble Deputy Chief Minister of Bihar reiterated that 18% tax rate was too
high and the loss of revenue would not be substantial if the rate was reduced to 12%. Shri Khalid
K. Anwar, Senior Joint Commissioner, West Bengal stated that in the earlier VAT regime, the
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VAT rate on shoes costing up to Rs.500 per pair was 5% but for other categories, VAT rate was
14.5%. Now, in GST, tax rate of 18% meant that the State’s share was only 9% and if this was
reduced to 12%, State’s share would further come down to 6%. The Hon’ble Chairperson
suggested that tax rate of 5% should be applied for footwear sold for a price upto Rs.1000 per
pair instead of the present Rs.500 per pair while tax rate of 18% should be continued for other
categories of footwear. The Council agreed to this proposal.
Lower Priced Biscuits
(xxii) The Hon’ble Minster from Uttarakhand stated that small biscuit industry which sold biscuits
at Rs.100 per kilo or below was suffering and they were unable to compete with the multinational
brands at the current tax rate of 18%. He suggested to bring down the tax rate on biscuits sold at
Rs 100 per Kilogram or below to 5%. He stated that this will help poor people to afford biscuit
with tea. The Hon’ble Chairperson suggested that this should be looked into by the Fitment
Committee. The Council agreed to this suggestion.
Caps and Topies
(xxiii) The Hon’ble Chairperson stated that he had received representations highlighting different
rates of tax being levied for knitted caps and topis and they had requested that this item should be
taxed at one rate. The Joint Secretary (TRU-I) explained that knitted cap/topi falling under
Chapter Heading 6501 and 6505, irrespective of price, were taxed at the rate of 12% whereas
apparel costing less than Rs.1000 was charged to tax at the rate of 5%. The Hon’ble Chairperson
suggested that tax rate for knitted cap/topi falling under Chapter Heading 6501 and 6505 and
having retail sale value not exceeding Rs.1000 should be reduced from current 12% to 5%. The
Council agreed to this suggestion.
Rakhi
(xxiv) The Hon’ble Chairperson stated that there were requests to exempt rakhi from tax. On enquiry,
Joint Secretary (TRU-I) stated that only kaleva was exempt from tax and rakhi had no specific
classification. The Hon’ble Chairperson suggested that rakhi other than those made of precious
and semi-precious metal/article, should be specifically exempted from tax. The Council agreed
to this proposal.
Annexure-II (Handicraft Items)
(xxv) Shri Navin Kumar Chaudhary, Principal Secretary (Finance), Jammu & Kashmir drew the
attention of the Council to Sl. No. 17 of Annexure-II wherein it was mentioned that Pasoli was
not a clear item and the same needed to be checked with the Government of Jammu & Kashmir.
In this regard, he clarified that Pasoli was a type of famous painting called Basoli and as such, it
should be included in the list of handicrafts. The Council agreed to this suggestion. He further
drew attention of the Council to Sl. No. 25 (handmade/hand embroidered shawls) and requested
that the rate of tax on hand embroidered shawls be reduced from 12% to 5% as it was a labour-
intensive product mostly made by women folk. The Hon’ble Chairperson stated that this should
be discussed with other MSME related issues. The Principal Secretary (Finance), Jammu and
Kashmir further drew attention of the Council to Sl. No.39 of Annexure-II and requested that the
rate of tax for Ladhaki chappals should be 5%. The Hon’ble Chairperson observed that Ladhaki
chappals may not costing more than Rs.1000 per pair and in that case, it would automatically fall
under 5% tax bracket.
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21. For Agenda item 7 relating to rate of tax on goods, the Council approved the proposals of
change in tax rates/clarifications on goods contained in Annexure-I and Annexure-II, along with the
changes in the rate of tax on goods as discussed above.
22. The Joint Secretary (TRU-II), CBIC introduced the changes proposed in the rate of tax on
services in Annexure III to Agenda item 7. He sought the permission of the Council to withdraw the
proposal at Sl. No.26 of Annexure III [to exempt from tax skill programmes having certification from
Directorate General of Training (DGT) erstwhile Directorate General of Employment and Training
(DGET) or Sector Skill Council under GST] as this proposal was subject to confirmation by the
Directorate General of Training (DGT) that CREDAI was their training partner. He informed that in
the morning today, DGT had clarified that CREDAI was not a training partner of DGT in the Ministry
of Skill Development and Entrepreneurship. The Council agreed to withdraw the proposal at Sl. No. 26
of Annexure III of Agenda item 7. Discussion regarding some other proposals relating tax rate in
Annexure III to Agenda item 7 and on some other issues is recorded as below:
Annexure III and other issues
(i) Sl. No. 2 (Request for exempting supply of services to and by Educational Boards to students
for conduct of examination): The Advisor (Financial Resources), Punjab suggested that the
recommendation of the Fitment Committee that services provided by Educational Boards may be
exempted but not the services provided by the Boards should be implemented through a
clarification instead of issuing a notification, as otherwise field formations may issue demand
notices for the past period. The Joint Secretary (TRU-II), CBIC suggested that an explanation
could be added to the existing notification 14/2018-Central Tax (Rate) to clarify this issue. The
Council agreed to this proposal.
(ii) Sl. No. 17 (Transaction value and not “declared tariff” may be considered for determining
the tax rate applicable for the accommodation service): The Hon’ble Minister from Goa
expressed happiness at the proposal to apply tax rate on accommodation services on transaction
value and not on declared value. He further urged that a decision on Sl.No.5 of Annexure-IV
regarding rate of tax on hotels needed should be taken early. He stated that 28% tax rate was too
high and tourism industry in his State was becoming uncompetitive compared to other
international destinations. He suggested that rate of tax on accommodation services should be
reduced from 28% to 18%. He stated that most tourists were skipping India and moving to other
destinations where they could get hotels at half the tax rates prevailing in India. The Hon’ble
Minster from Assam stated that hotels would get considerable relief by changing the basis of
application of tax rate to transaction value instead of declared tariff. The Joint Secretary (TRU-
I) expressed a similar view. He further pointed out that the Table at page 263 of Vol. I of the
Agenda Note (part of Annexure IV of Agenda Note 7) showed a study of comparative overall
hotel rates of one chain of hotels which indicated that cost of hotel accommodation in India was
less than that in countries like Malaysia, Singapore, Thailand, Sri Lanka, etc. The Hon’ble
Minister from Goa stated that at least the cap of room rent of Rs.7500 and above per night for
applying 28% tax rate should be increased to Rs.10,000 per night. The Hon’ble Chairperson
stated that a big relief was already being given in this Council Meeting for accommodation
services by applying the tariff rate on transaction value instead of declared value. Further
relaxation regarding increasing the cap on minimum room rent from which the rate of 28% would
apply could be examined further by the Fitment Committee.
(iii) Sl. No. 12 (Proposal to declare services supplied by Central Government, State
Government, Union Territory or Local Authority by way of any activity in relation to any
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function entrusted to a Municipality under Article 243W of the Constitution as neither
supply of goods nor services): The CCCT, Andhra Pradesh stated that the proposal to declare
services provided by municipalities as “no supply of goods or services” should be accepted as
some Municipalities were smaller than Panchayats. The Senior Joint Commissioner, Commercial
Tax, West Bengal stated that under the present GST laws, services provided by Panchayats qualify
as “no supply” and in other place as “exempt services” which had led to ambiguity. If the service
provided by Panchayats was to be treated as neither as supply of good nor services, then it would
not come under the purview of computation of aggregate turnover. But, if it was to be treated as
exempt supplies, then the annual turnover of Panchayat would need to be assessed after also
taking into account the turnover of exempt supplies and if this exceeded Rs.20 lakh, then
Panchayats would need to take registration under GST. As a result, even small Panchayats would
become liable for registration. This anomaly was proposed to be rectified through a notification
so that even if Panchayats rented some property, it was not required to take registration if the
annual turnover of taxable supply was less than Rs.20 lakh. CCT, West Bengal stated that it was
proposed that similar treatment should be given both to Municipalities and Panchayats. CCT,
Gujarat stated that this issue could also be addressed by putting renting services by Panchayats
and Municipalities under reverse charge. However, if a Municipality rented a property to a non-
registered person, no tax would be payable in this situation. The Council agreed that services
given by Municipalities under Art. 243W of the Constitution would be treated as no supply of
goods or services. It also agreed to the other recommendation of the Fitment Committee to revert
Entry 5 of Notification No.12/2017-CT(R) to what it was prior to its amendment vide Notification
No.32/2017-CT(R) dated 13.10.2017.
Custom Milling of Paddy
(iv) The Hon’ble Minster from Chhattisgarh stated that Food Corporation of India (FCI) procured
paddy and then gave it for custom milling which was taxed. As the milling was undertaken on
behalf of FCI, he suggested that no tax should be charged on custom milling of paddy. The
Hon’ble Chairperson stated that this could be examined by the Fitment Committee. The Council
agreed to this suggestion.
Tax on coaching of various sports
(v) The Hon’ble Minister from Assam stated that presently there was a tax on sports activity such as
coaching for boxing and badminton and he suggested that sports and cultural activities should be
exempted from tax. The Secretary stated that the basic issue related to charging of tax on coaching
for sports activities and this could be examined by the Fitment Committee. The Council agreed
to this suggestion.
23. For Agenda item 7 related to proposed changes in rate of tax on services, the Council
approved the proposals of Annexure-III to Agenda Item No.7 except the item at Sl.No.26 which stood
as withdrawn. The Council also agreed that in relation to Sl. No.2, an explanation shall be added to the
existing notification 14/2018-Central Tax (Rate) to clarify that services provided by Educational Boards
are exempt.
24. In relation to proposals at Annexure IV relating to goods (List of goods which require further
examination by the Fitment Committee), on the issue of footwear appearing in this agenda item, the
Council took a decision as recorded under discussion on Annexure I and agreed to the other proposal of
the Fitment Committee.
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25. In relation to Annexure IV relating to services (List of services which require further
examination by the Fitment Committee), the Council agreed to the proposals of the Fitment Committee.
26. In relation to Annexure V of Agenda Note 7 (List of goods not recommended for change in
GST rate), some of the goods covered under this Annexure where the change in rate of tax was not
recommended by the Fitment Committee were discussed during the discussion on Annexure-I to Agenda
Item No.7 wherein the Council took various decisions relating to reduction in rate of tax or referring the
issue to the Fitment Committee. These include phosphoric acid (Sl. No. 69); Nicotine Polacrilex Gum
(Sl.No.71); and food products (Sl.No.90). In addition, following issues were discussed:
(i) Sl. No. 83 (equal treatment to various semi-precious stones in Gems and Jewellery Sector):
The Hon’ble Minister from Rajasthan stated that the rate of tax on semi-precious stone should be
reduced from the current 3% to 0.25%, though the Fitment Committee had not recommended this
reduction. The Secretary stated that the main reason for levying tax at the rate of 0.25% on
diamonds was to avoid blockage of funds of Jewellery as most of rough diamonds were imported.
The rate of tax on semi-precious stone was only 3% and the fund blockage would not be very
high. The Hon’ble Minster from Rajasthan stated that semi-precious stones like canalite and
tanzanite were more precious than even diamond. The Hon’ble Chairperson stated that this issue
could be considered at a later date.
(ii) Sl. No. 101 (IGST exemption on import of machinery between 1st July to 12 October, 2017,
i.e. till the date EPCG exemption was restored on 12.10.2017): The CCT, Gujarat requested
that this issue should be considered sympathetically in the interest of export. The Secretary stated
that giving a retrospective amendment would be difficult.
27. In relation to Annexure-VI of Agenda Note 7 (List of services not recommended for change in
GST rate), the Principal Secretary (Finance), Jammu & Kashmir on behalf of His Excellency the
Governor of Jammu & Kashmir, brought to the attention of the Council, item at Sl. No.21 (to exempt
all kinds of supply of services by Shri Mata Vaishno Devi Shrine Board, Katra from GST) and Sl. No.22
(to exempt all kinds of supply of services by Shri Amarnathji Shrine Board from GST) and requested
that the services by both the Shrine Boards should be exempted from tax. The Hon’ble Chairperson
stated that the Ministry of Culture had come up with a scheme to reimburse taxes on inputs used in
preparing food in langars, etc. when distributed free and they should take advantage of this scheme. He
added that upfront exemption of tax on inputs going into preparing food etc. in a religious shrine would
not be possible as it would be very difficult to assess as to what items were purchased for use in the
temple.
28. After discussion, the Council approved the proposals under Annexure VI (List of Services not
recommended for change in GST rate).
Discussion on Table Agenda for rate reduction in Goods
29. The Hon’ble Chairperson stated that a Table Agenda was circulated today (attached as
Annexure 6 to the Minutes) on the basis of representations received to further prune the present 49
items in the tax bracket of 28%. He stated that some of the items in 28% tax bracket were sin goods or
luxury goods on which in addition to 28% tax, cess was also being levied. Excluding this category,
there were about 20 items which were in the 28% tax bracket. These 20 items fell into two categories.
The first category was of those goods for which revenue accrued as intermediate supplies and thus these
were wash transactions. The second category was those goods which went for middle class consumption
such vacuum cleaner, small television, refrigerators, etc. on which such a high rate of tax gave the
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incentive to evade tax. He stated that most of these products could no longer be considered as luxury
goods. He further observed that if the rate of tax on middle class consumption goods were reduced from
28% to 18%, it would boost demand. Taking this into, the Table Agenda was circulated proposing
reduction of tax on 17 items listed therein. He sought the views of Hon’ble Minsters from the States on
the proposal to reduce the rate of tax on these 17 items from 28% to 18%.
29.1. The Hon’ble Minister from Goa supported the proposal to reduce tax rate on the proposed items
from 28% to 18% for the benefit of the middle class. He observed that revenue loss would be made up
by tax buoyancy. He also stated that e-way bill would improve compliance. He added that it was
important that a message should go that the Council cared for the middle class. He stated that this was
a proposal in the right direction where only sin and luxury goods should be taxed at the rate of 28%.
29.2. The Hon’ble Minister from Goa questioned the rationale of reducing the rate of tax from 28%
to 18% for items covered under Sl.No.14 of Table Agenda (Video games consoles and machines, article
and accessories for billiards, other games operated by coins, banknotes, i.e., casino games and other
[other than board games of 9504 90 90]). The Hon’ble Minister from Goa suggested that casino games
should be removed from the entry of Sl.No.14. Ms. Renu Sharma, Principal Secretary, (Finance), Delhi
suggested that items covered under Sl. No. 14 of the Table Agenda should not be approved. The Hon’ble
Chairperson agreed to this suggestion. He stated that it would send a bad signal to reduce tax rate on
games etc. which could be potentially used in casinos and suggested to exclude goods covered under Sl.
No. 14 of the Table Agenda from the proposal to reduce tax from 28% to 18%. The Council agreed to
the proposal.
29.3. The Hon’ble Minister from Assam suggested that the proposal to reduce tax rate on items listed
at Sl.No.11 [special purpose motor vehicles, other than those principally designed for the transport of
persons or goods (for example, breakdown lorries, crane lorries, fire fighting vehicles, concrete-mixer
lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological unit), Sl.No.12
(works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories,
warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on
railway station platforms; parts of the foregoing vehicles) and Sl. No. 13 [trailers and semi-trailers; other
vehicles, not mechanically propelled; parts thereof (other than self-loading or self-unloading trailers for
agricultural purposes and hand propelled vehicles (e.g. hand carts, rickshaws and the like); animal drawn
vehicles] should be reconsidered due to potential revenue loss. The Hon’ble Chairperson stated that
revenue loss involved on these three items was not very substantial and therefore, rate reduction could
be considered. He stated that revenue loss involved in the proposed reduction from 28% to 18% on the
goods covered under the Table Agenda would be around Rs.6315 crores.
29.4. The Hon’ble Chairperson further stated that he was proposing to withdraw the items listed at
Sl.No.17 of the Table Agenda [smoking pipes (including pipe bowls) and cigar or cigarette holders and
parts thereof] under Chapter 9614 as these were sin items and any reduction in tax on them would send
a wrong signal. He also stated that he was proposing to withdraw the proposal covered under Sl. No.
16 of the Table Agenda (all dutiable articles intended for personal use) as the coverage of these goods
would be too wide. The Hon'ble Chairperson suggested that items covered under Sl. Nos. 14, 16 and 17
of the Table Agenda should be excluded and washing machine (Chapter Heading 8450) should be added
for the proposed reduction of tax from 28% to 18%. The Council agreed to these suggestions.
29.5. The Principal Secretary (Finance), Delhi suggested that proposal to reduce the rate of tax on
goods covered under Sl. No. 15 of the Table Agenda (scent sprays and similar toilet sprays, and mounts
and heads therefor; powder-puffs ad pad for the application of cosmetics or toilet preparations) should
be reconsidered as these were used by rich persons. The Hon’ble Deputy Chief Minister of Bihar
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suggested not to exclude the items covered under Sl. No.15 from rate reduction. The Hon’ble
Chairperson stated that more and more middle-class women used perfumes and percentage of those
using very high value perfumes would be very small. He suggested that this proposal should be accepted.
The Council agreed to the suggestion.
29.6. The Hon’ble Minister from Assam raised a question as to why cement was not being considered
for rate reduction. The Hon’ble Chairperson stated that at this juncture, motor car parts and cement was
being left out of the purview of tax reduction because of high revenue involved. CCT, West Bengal
stated that the Hon’ble Finance Minister of her State had written a letter to the Hon’ble Union Finance
Minister in November 2017 urging reduction in rate of tax on the items covered under 28% rate bracket
and he had conveyed his support to the proposed reduction in rates. The Hon’ble Chairperson stated
that he had also talked to the Hon’ble Chief Minister of West Bengal before this Council Meeting and
she also supported the proposal to give relief to the middle-class people.
29.7. The Hon’ble Chairperson stated that washing machine falling under Chapter heading 8450 was
left out of the Table Agenda. He proposed that tax should be reduced on this item also from 28% to
18% as it was used widely by the middle class. He added that the revenue involved on account of tax
reduction on this item was about Rs.1560 crore. CCT, West Bengal expressed that in India, washing
was still done by hand by 75% of the population and also the use of washing machine was bad for
environment. The Hon’ble Chairperson stated that a lot of working class women used washing machines
and added that rate reduction on washing machine would come as a great relief to middle class women.
The CCT, Punjab supported the proposal. He, however, stated that the estimated revenue loss due to
reduction of tax in 15 items (from 28% to 18%) appeared on lower side. The Secretary stated that
revenue implication had been worked out taking into account about 1/3rd reduction in tax and it was
estimated on the same basis as done before in the 23rd Council meeting held at Guwahati on 9 and 10
November, 2017 where the estimated revenue loss turned out to be the correct calculation based on
actual revenue numbers.
29.8. The Joint Secretary (TRU-I) drew attention to the recommendations of the Fitment Committee
at Sl. No.10 of Annexure I, under which it was sought to provide exactly the same treatment to brass
kerosene pressure stove as has been provided to kerosene stoves of iron or steel. He proposed that
accordingly brass kerosene stove may be taxed at the rate of 12% but parts thereof would attract tax at
the rate of 18% (same as for iron and steel stove).
29.9. The Hon’ble Minister from Tamil Nadu stated that he had circulated a written speech where he
had requested for reduction of tax on 42 goods and 9 services. He requested that it should be recorded
in the Minutes and the suggestions should be considered by the Fitment Committee at the earliest. The
Council took note of the same.
30. For Agenda Item 7, the Council decided the following:
30.1. For Annexure I, approved the proposed changes in rates of tax with the following amendments:
(i) To exempt from tax deities made of wood along with deities made of marble and stone;
(ii) To reduce the rate of tax on Hand Operated Rubber Roller from 18% to 12% and the Fitment
Committee to study the possibility to further reduce it to 5%;
(iii) Kota stone and similar stones (except marble and granite) other than those which are polished
shall be taxed at the rate of 5% while polished Kota stone and similar stones shall be taxed at the
rate of 18%;
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(iv) The Fitment Committee to work out a definition/scope of polished stone in consultation with
officers of Rajasthan and Andhra Pradesh.
30.2. Approved change in tax rate/input tax credit refund in respect of the following goods:
(i) To allow refund of input tax credit on account of inverted duty structure in the textile sector which
shall be implemented from a prospective date; purchases made after the date of notification
implementing this provision shall only be allowed refund of input tax credit and the earlier input
tax credit lying in balance on the date of such notification shall stand lapsed;
(ii) To reduce tax on fertilizer grade phosphoric acid from 12% to 5%;
(iii) To reduce the rate of tax on ethanol for sale to Oil Marketing Companies for blending with
motor spirit from 18% to 5%;
(iv) To reduce the rate of tax on zip and slide fasteners from 18% to 12%;
(v) To charge tax at the rate of 5% for footwear sold for a price up to Rs.1000 per pair instead of
the present Rs.500 per pair, while tax rate of 18% to be continued for other categories of footwear;
(vi) To reduce the rate of tax rate for knitted cap/topi falling under Chapter Heading 6501 and 6505
and having retail sale value not exceeding Rs.1000 from 12% to 5%;
(vii) To exempt from tax rakhi other than those made of precious and semi-precious metal/article;
(viii) Fitment Committee to review/consider reduction in rate of tax on pickle; cakes; different
categories of eggs; other processed food products (Sl. No.90 of Annexure V); Nicotine Polacrilex
Gum (Sl. No.71 of Annexure V); products consumed on cruise liners; biscuits sold at Rs 100 per
Kilogram or below;
30.3. For Annexure II, approved the proposed changes in rates of tax with the following amendment:
(i) To clarify that Pasoli was a type of famous painting called Basoli in Jammu & Kashmir which
was a handicraft item to be taxed at the same rate as other paintings (12%).
30.4. For Annexure III, approved the proposed changes in rates of tax on Services with the following
amendments:
(i) to withdraw the proposal at Sl. No.26 of Annexure III to exempt from tax, skill programmes
having certification from Directorate General of Training (DGT) erstwhile Directorate General
of Employment and Training (DGET) or Sector Skill Council under GST;
(ii) For Sl. No.2, instead of issuing a new notification, to add an explanation in the existing
notification 14/2018-Central Tax (Rate) that supply of services by Educational Boards to students
for conduct of examination shall be exempt from tax;
(iii) For Sl. No.12, services given by Municipalities under Article 243W of the Constitution to be
treated as no supply of goods or services;
(iv) Fitment Committee to examine relaxation regarding increasing the cap on minimum room rent
from which the rate of 28% shall apply; exemption of tax on custom milling of paddy; charging
of tax on coaching for sports activities.
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30.5. For Annexure IV, Council approved the proposal of the Fitment Committee except for the
following:
(i) For Sl. No. 1 (footwear) on issues relating to goods, rate of tax already decided by the Council as
recorded above in relation to Annexure I decisions.
30.6. For Annexure V, Council approved the proposal of the Fitment Committee except the following
issues:
(i) rate of tax on phosphoric acid (Sl. No. 69) decided to be reduced as already recorded as part of
decision of the Council in Annexure I above;
(ii) To refer the following goods/issues for reconsideration by the Fitment Committee: Nicotine
Polacrilex Gum (Sl.No.71); food products (Sl. No.90) and the issue of equal treatment to various
semi-precious stones in Gems and Jewellery Sector (Sl. No. 83);
30.7. For Annexure VI, Council approved the proposals of the Fitment Committee.
30.8. Approved the reduction in the rate of tax from 28% to 18% for goods covered under the Table
Agenda (Annexure 6 of the Minutes) except for the goods covered under Sl. No. 14, 16 and17 and
including Washing Machine covered under Chapter Heading 8450.
Agenda Item 8: Reports/Recommendations of different Committee/Group of Ministers (GoMs)
for information/approval of the Council
Agenda Item 8(i): Recommendations of the Committee on Lottery
31. The Secretary invited the Joint Secretary (TRU II), CBIC to brief the Council regarding the
recommendations of the Committee on Lottery. The Joint Secretary (TRU II), CBIC stated that the
Terms of Reference of the Committee on Lottery was to examine and recommend ways to enable flow
of GST to lottery to consuming States, and in this context, to examine issues like continuance of reverse
charge on lotteries, exemption from tax for supplies beyond the first stage of lottery distributor, any
necessary changes in 'place of supply rules' or Lottery Regulation Act, 1998 and any other connected
issues.
31.1. He informed that the report of the Committee was submitted which is part of Annexure A of
this Agenda item. The Committee has made the following recommendations for the consideration of
the Council:
A clarification may be issued that:
a. If the organising State is registered in the State in which the organising State’s lottery is
being sold or has a fixed establishment there, then the supply of lottery by organising State
to the lottery distributor or selling agent is an intra-State supply on which CGST and SGST
of the consuming State is to be paid under reverse charge by the Lottery Distributor;
b. If the organising State is not registered in the State in which the organising State’s lottery
is being sold or does not have a fixed establishment there, then since the distributor/ selling
agent will necessarily be registered in the consuming State (requirement in terms of section
25 of GST Act and the [proposed] rules framed by State Governments under Section 12 of
the Lotteries (Regulation) Act, 1998), the transaction at first point of distribution chain
between the organising State Government and the lottery distributor/ selling agent, shall be
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an inter-State supply on which IGST is to be paid under reverse charge by the lottery
distributor/ selling agent (Draft circular annexed to the report of the Committee).
31.2. The lottery organising States and the States in which lotteries are consumed, may frame
following rules under Section 12 of the Lotteries (Regulation) Act, 1998:
a. An organizing State shall sell lottery tickets meant for a particular <State> to a distributor located
and registered in that <State> only.
b. A distributor located and registered in a <State> selling tickets of another organizing State shall
buy such tickets directly from the organizing State Government.
c. It shall be compulsory for <the organising State> to print “FOR SALE IN <name of State>
ONLY” on each paper lottery ticket (Draft rules are annexed to the report of the committee as
Annexure 4).
31.3. The Council agreed to the recommendations.
32. For Agenda Item 8(i), the Council approved the recommendations of the Committee on
Lottery.
Agenda Item 8(ii): Recommendations of the Committee on IGST
33. The Secretary informed that this Agenda item was discussed in detail in the Officers meeting
held on 20 July, 2018. He stated that a lot of concerns were expressed by States as to why IGST amount
was accumulating so much. It must be ensured that IGST accumulation did not occur and to examine
this issue, earlier a Committee on IGST had been set up with Shri Ritvik Pandey, Joint Secretary, DoR,
as its co-ordinator. He then invited the Joint Secretary, DoR to present the main recommendations of
the Committee on IGST. The Joint Secretary, DoR stated that after an analysis of un-apportioned
amount of IGST, the Committee on IGST had recommended to make ad hoc settlement of the un-
apportioned amount of IGST. In the month of February, 2018, ad hoc settlement of Rs.35,000 crore
was approved. In March, 2018, the Council constituted a committee on IGST to study and address the
problem of IGST accumulation He stated that collection of IGST every month was about Rs.50,000
crore. Initially, in August, 2017, settlement was of Rs.11,000 crore and in June, 2018, settlement was
about Rs.30,000 crore leaving a gap of about Rs.20,000 crore. He stated that as there was no transitional
credit of IGST, the settlement of IGST had started right from the start of implementation of GST from
the level of Rs.11,000 crore. However, because of accumulation of IGST credit, two provisional
settlements were done, one of Rs.35,000 crore in February 2018 and the second of Rs.50,000 crore in
June 2018.
33.1. He pointed out certain reasons for accumulation of balance in IGST credit ledger. He stated
that the settlement of IGST depended upon use of IGST credit for payment of CGST and SGST. In
April 2018, the net accumulation in IGST credit ledger was about Rs.15,000 crore whereas in June 2018,
the net accumulation was only about Rs.4,000 crore which showed a drastic reduction in accumulation
in last three months. He stated that the net accumulation of IGST till June, 2018 was about Rs.1.16 lakh
crore. The Secretary clarified that IGST paid by a taxpayer goes to the IGST ledger of the purchaser
which implies that IGST paid to the tune of Rs.1.16 lakh crore was lying in balance in the ledgers of
various taxpayers. This amount could potentially be used in any month by any taxpayer to settle his
CGST and SGST liability. He added that even during pre-GST period, at any given time, during the
preceding three years, there was an accumulated balance of CENVAT and Service Tax credit to the tune
of about Rs.1.50 lakh crore and a similar balance was now being reflected in the IGST ledger. For the
first three months of this Financial Year, the IGST balance after the settlement and refunds was in the
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negative. However, the previous year balance of Rs.1.68 lakh crore would be continued as a liability
that could be claimed by the taxpayer any time. He further informed that about Rs.45,000 crore was
paid as IGST on B2B transactions during July-December, 2017 but no credit for the same was taken by
the end of financial year. As time allowed for claiming input tax credit in the ledger was till September
2018, one should have a safe margin of Rs.1.5 to 1.6 lakh crore in the IGST head and this amount was
not yet due to the Central Government or the State Governments. It had to be kept in balance for use for
payment of CGST and SGST.
33.2. The Secretary further stated that IGST model was brought in after a lot of consideration and if
it was found to be not working well, one option was to switch to a new system to only charge CGST
and SGST. In this model, for the goods going from, say, Maharashtra to Madhya Pradesh, the exporting
taxpayer would pay CGST and SGST and when the same reaches Madhya Pradesh and when credit of
tax is utilised by the purchaser in Madhya Pradesh, then there would be a mutual settlement between the
two States. He observed that cross settlement between States would be very complex and originating
State would always have a significant balance. This model would not affect the Central Government as
it would get the CGST upfront.
33.3. The Secretary further informed that a paper has been written by Shri V. Bhaskar and Shri Vijay
Kelkar of Pune International Centre in which it is proposed to make CGST payment immediately and
to pay SGST as IGST for settlement with the States. He stated that this model was also fine with the
Central Government. He added that the Central Government would not like to keep IGST balance
beyond Rs.1.6 lakh crore and would give provisional settlement to the States for balance exceeding this
amount. He suggested that the Committee on IGST could examine both the models, namely payment
of CGST and SGST upfront and the model suggested by Shri V. Bhaskar and Shri Vijay Kelkar. The
Council agreed to this proposal.
33.4. The Hon’ble Deputy Chief Minister of Delhi stated that in the VAT regime also, there was issue
of credit lying in the taxpayer’s credit account. The payment of refund was also an issue. He stated that
parking of such a large amount of IGST would require a serious rethink of CGST and SGST model.
The Hon’ble Chairperson informed that the officers of Delhi are also a part of the Committee on IGST
and they should give their suggestions. The Council agreed to this suggestion.
33.5. The Hon’ble Chief Minister of Puducherry suggested that to wait for settlement till September
2018 and then apportion the shares to States including to Delhi and Puducherry. The Secretary stated
that the data regarding credit reversal, credit utilised and credit not taken shall be available after
September, 2018 in the annual return and then the settlement amount would also cover Puducherry and
Delhi. The Secretary stated that prior to GST also, about Rs.1.5 lakh crore used to be parked in the
Consolidated Fund of India by way of credit of Central taxes and now it had become IGST amount and
only the form had changed. He stated that 42% of this revenue would be devolved to the States. He
said that this devolution was done despite reservations of the Comptroller and Auditor General of India
keeping in view the fact that if this amount of Rs.1.6 lakh crore was not devolved, then every State
Government would face serious fund crisis.
33.6. The Hon’ble Minister from Assam stated that the proposal to adopt a different model for IGST
would have a far-reaching impact. Origin State would have huge amounts of tax parked in the State
Consolidated Fund. The destination State would have to wait for settlement till the input tax credit was
utilised by the buyer in the importing State and the amount for which input tax credit was not utilised,
would never come to the destination State. He stated that some method should be found for settling
funds for Delhi and Puducherry instead of tinkering with the IGST design. The Hon’ble Chief Minister
of Puducherry stated that the question was as to what would be this method. The Hon’ble Minister from
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Assam stated that the system of devolution as per the Finance Commission formula should not be
disturbed and everyone should wait till September 2018 to see what was the IGST balance lying at that
time. The Hon’ble Deputy Chief Minister of Delhi stated that there were three issues involved: (i) The
distribution pattern of IGST; (ii) The relationship between CGST, SGST and IGST; (iii) Whether the
decision taken in March 2018 was right or wrong.
33.7. The Secretary stated that for future accumulation of IGST, there were certain solutions proposed
by the Committee on IGST. However, if accumulation of IGST continued even after these solutions
were implemented, then provisional settlement would be done.
33.8. The Hon’ble Deputy Chief Minister of Delhi stated that devolution for the last year was done
including the IGST amount of Rs.1.6 lakh crore up to March 2018. This led to loss of revenue to Delhi
as they did not get any revenue. He stated that any decision regarding IGST should be taken with the
approval of the Council or the GIC and it could not be unilaterally decided by the Central Government.
The Secretary stated that no unilateral decision was taken. In fact, there was no option as the IGST
forms part of the Consolidated Fund of India and since it was part of the Consolidated Fund of India,
the Central Government had no option but to devolve it to the States. However, Central Government
did not have the option to distribute Rs.1.6 lakh crore as it was a liability for future and it was a liability
of the Central Government. He added that in future too this balance would need to be maintained.
33.9. The Hon’ble Deputy Chief Minister of Delhi stated that they had subsumed entry tax, luxury
tax, etc. but there is no liability of input tax credit. The Secretary stated that there was a total of Rs.70,000
crore balance in SGST ledger as well.
33.10. The Hon’ble Chief Minister of Puducherry stated that the argument of the Secretary was not
correct. C&AG could not go against the GST Law. The funds that were collected under GST Law must
be apportioned under GST and it could not go to the Consolidated Fund of India. It was important that
they also must get their share of revenue. CCT, Tamil Nadu stated that it was important to remember
that Rs.1.6 lakh crore was not only Centre’s money; 50% of this amount belonged to the States and,
therefore, IGST amount lying in the Consolidated Fund of India was different in nature than the amount
lying earlier on account of Central Excise and Service Tax credit. The Hon’ble Chairperson stated that
the amount of Rs.1.6 lakh crore could not be kept anywhere except in the Consolidated Fund of India.
After September 2018, a part of it would be distributed as per the GST formula. The Hon’ble Chief
Minister of Puducherry stressed the point that he wanted an assurance that distribution of amount would
be as per the GST formula. The Hon’ble Chairperson stated that it was a rolling amount and it was not
depriving anyone of its share. Earlier too the Central Excise and Service Tax went to the Consolidated
Fund of India and potentially could be claimed as credit but also new amount got added. The Hon’ble
Deputy Chief Minister of Delhi stated that Minutes should record the disagreement of the Union
Territory of Delhi with the explanation offered by the Hon’ble Chairperson. The Hon’ble Minister from
Tamil Nadu also requested to record his disagreement.
33.11. The Joint Secretary, DoR stated that there was a proposal to change the cross-utilisation
provision of input tax credit under GST Law which would require the taxpayers to first use IGST credit
for payment of CGST / SGST before using CGST / SGST credit. This would increase IGST cross
utilisation and would reduce the balance in the IGST credit ledger. The Hon’ble Chairperson stated that
the collection in first eleven months of GST implementation revealed that SGST collection was higher
than CGST collection which showed that a larger portion of CGST credit was getting exhausted. The
Secretary pointed out that if Centre gave more provisional settlement, then State finances would be
benefitted but one has to be also mindful of the finances of the Central Government. He pointed out
that in 2017-18, the total revenue of States was Rs.3.39 lakh crore, whereas that of the Central
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Government was only Rs.2.05 lakh crore. Similarly, in Financial Year 2018-19, the States total revenue
including compensation was Rs.1.39 lakh crore, whereas that of the Central Government was Rs.1.17
lakh crore. He stated that the revenue position of the Central Government must also be taken into
account and it would need to hold Rs.1.6 lakh crore as a liability for future settlements.
33.12. The Hon’ble Chairperson observed that the amount for compensation would come down if
proposal made by Tamil Nadu and Delhi was accepted. The CCT, Tamil Nadu stated that in the year 6
of implementation of GST, the method of IGST settlement would make a big difference. He further
stated that instead of recording disagreement of some States, concerns of Delhi, North-East and Tamil
Nadu would need to be addressed. He suggested that a Committee should be formed under Chairman,
CBIC, Shri S. Ramesh, to look into these issues and Finance Secretaries of four States covering four
different regions, namely, Delhi, Tamil Nadu, and one each from North East and West along with
Principal CCA (Chief Controller of Accounts), CBIC and Joint Secretary, DoR could be part of this
Committee. The Hon’ble Chief Minister of Puducherry stated that his State should also be part of this
Committee. The Hon'ble Chairperson agreed to this suggestion. The Council agreed to the constitution
of the Committee as proposed by the Hon'ble Chairperson.
33.13. The Joint Secretary, DoR stated that the second reason for accumulation of IGST was that
ineligible input tax credit was not being reversed. He stated that manufacturers of exempt goods are not
eligible for input tax credit, and banking and financial companies are eligible only for 50% of input tax
credit. Many of such entities were taking only the eligible amount of input tax credit into their ledger.
Had the taxpayers taken the full amount as input tax credit and then reversed 50% or whatever proportion
for which they were ineligible, then IGST to that extent could have been apportioned to that State where
the taxpayer was registered. He informed that in GSTR-3B information to be filed under Table 4 was
meant to facilitate settlement but taxpayers were not declaring reversal of any input tax credit and
ineligible input tax credit. So information regarding ineligible input tax credit was not getting captured
and amount was remaining un-apportioned. He stated that the total credit of IGST available was Rs.4.20
lakh crore but credit taken in the ledgers of taxpayers was only about Rs.3.35 lakh crore. In fact,
Rs.45,000 crore was not reflected in any input tax credit ledger as they were not featuring in the tax
returns and hence they were not getting apportioned. He informed that in order to address this problem,
it was proposed that in the format for Annual Return under GST law, a Table for reconciliation of ITC
available and ITC availed as mentioned in paragraph 18 of the Agenda Note 8(ii) should be inserted.
33.14. The Joint Secretary, DoR stated that the third reason for IGST accumulation was pending
refunds of input tax credit of IGST. He stated that an amount claimed as refund was debited in the ITC
ledger of the taxpayer but the amount remains in the IGST account till the refund is given. He stated
that this was not a big problem and the fund blockage was transitory in nature.
34. For Agenda Item 8(ii), the GST Council decided the following:
(i) To approve the recommendations of the Committee on IGST to change the order of cross
utilisation in the GST Law requiring the taxpayer to first use the IGST credit for payment of
CGST / SGST before using CGST / SGST credit and to add a table of reconciliation of input
tax credit available and input tax credit availed in the format for annual return;
(ii) To set up a Committee under Chairman, CBIC consisting of Finance Secretaries of Delhi,
Puducherry, Tamil Nadu, and one each from the States of North East and West along with
Principal CCA, CBIC and Joint Secretary, DoR, to address the concerns raised regarding
treatment of IGST amount vis-à-vis the Consolidated Fund of India.
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Agenda Item 8(iii): Recommendations of the Report of the Task Force to suggest measures for
creating an Eco-System for Seamless Road Transport Connectivity
35. The Secretary invited the Joint Secretary, Department of Revenue (DoR) to make a presentation
on this Agenda Item. The Joint Secretary, DoR stated that in order to comprehensively review the
benefits of GST to reduce the burden on logistic sector, the Council in its 12th Meeting held on 16 March
2017 had decided to constitute a Task Force to Suggest Measures for Creating an Ecosystem for
Seamless Road Transport Connectivity across the country. He stated that with the introduction of GST
and a uniform nation-wide system of e-way bill with no physical check posts, transportation of goods
had substantially become smoother but there was a scope for further improvement if a multi-sectoral
approach was taken. He stated that the Task Force had submitted its report and it was circulated to all
the States on 17 July 2018.
35.1. In the presentation, the Joint Secretary, DoR highlighted that road transport accounted for bulk
of freight movement and one of the major reasons for delay in the movement of transport vehicles was
checking at border check posts for activities like toll payment, checks conducted by Commercial Tax
officers, Police and Transport department, State Excise authorities, Animal Husbandry, Mines and
Minerals. Though the Commercial Tax check posts have gone, many other still remain. He stated that
the e-way bill system in GST provides for a priori declaration by the supplier on the IT system with a
system-based verification. It follows a risk-based approach where physical checks are conducted in
very small number of cases and there is also an onus on officers to report physical checks in a time
bound manner. There is also a provision for the person incharge of a vehicle to report if his vehicle has
been stopped by an officer for more than 30 minutes. He stated that there was a possibility of integrating
e-way bill system with other systems like VAHAN. It could also be used by other systems. The
electronic verification could be through RFID (Radio-Frequency Identification) or GPS (Global
Positioning System). He stated that instead of physical proof of delivery, an Electronic Proof of Delivery
(e-PoD) could be integrated with e-way bill. He stated that the permit system could also be reviewed.
He further stated that the report had suggested to use GPS and its integration with the e-Way Bill System
as it was better than RFID technology and its cost was reducing over a period of time. Majority of
transport vehicles were already using GPS and use of GPS may be made mandatory in the Motor
Vehicles Act. A provision could also be made for mandatory sharing of GPS data with NIC. Another
recommendation was to dovetail GST and Transport Internationaux Routiers so that ID number of TIR
CARNET holder can be treated as a valid e-Way Bill.
35.2. The Joint Secretary DoR further stated that the report also recommended to minimize routine
checks and the same should be done only on risk assessment. There should be authorization by a
significantly high level of officer for conducting such checks and there should be a system of mandatory
reporting of checks. The report also suggested rationalization of check posts and a system to avoid
routine road checking of vehicles. The report has also suggested integration of various databases like
VAHAN, SARATHI and NCRB (National Crime Records Bureau). Separate risk assessment matrix
could be developed for each purpose as has done by the Customs Department.
35.3. The report also highlighted the need for real time updation of VAHAN database by Regional
Transport Offices (RTOs) to capture fitness certificate, pollution under control, insurance, permit etc.
The report has also recommended to harmonize Carriage by Roads Act, 2007 and GST Law. It also
suggested electronic payment of toll, all types of payment including on-road penalties to be made on-
line, reforms in Passenger transport segment, alignment of various forms relevant for transport of goods
and e-Way Bill.
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35.4. The Hon’ble Chairperson observed that it was a good report and that the transport sector was
still facing several difficulties because of which it had been going on strike. He observed that while
check posts had stopped, there were complaints of harassment by flying squads. He enquired whether
instances of harassment could be put in public domain. Joint Secretary, DoR informed that there was
already a provision under e-Way Bill that if a trucker was stopped for more than half an hour, the trucker
could report the incident on the on-line portal. CCT, Gujarat stated that it was a good proposal to do
away with permit system. The Secretary stated that the Ministry of Road Transport and Highways along
with Road Transport Ministers of various States were having some type of Empowered Committee and
looking into the issue. The Hon’ble Deputy Chief Minister of Bihar stated that the NIC report on e-Way
Bill System had informed that it would take almost two years to install GPS. He informed that in the
State of Uttar Pradesh, sensors had already been installed at 200 places for reading RFID tags and RFID
tag was being made mandatory on transport vehicles as its cost was now as low as Rs.200 per piece. He
observed that one could not wait for two years for introduction of GPS. It would be good to start using
RFID tag depending upon the success of its use in Uttar Pradesh and Maharashtra. He further stated
that the cost of RFID would not be as high as GPS and all States should use RFID technology.
35.5. The Chief Commissioner of Commercial Tax, Andhra Pradesh stated that RFID reader was a
better technology and cost effective. He added that the entire country should go for RFID as verification,
inspection and physical stopping of vehicles led to problems. The Secretary stated that installation of
RFID readers and tags could also be funded by the Government of India. The Hon’ble Deputy Chief
Minister of Bihar stated that the States could also fund this project as the cost was not very high. The
Secretary stated that the GSTN could procure the RFID readers and tags and distribute them to all the
States. He suggested that GSTN should work out as to how many RFID readers would be required in
the whole country and what would be their positioning. He added that GSTN should work out the cost
for installation of RFID readers and RFID tags. The Hon’ble Chairperson stated that the Ministry of
Road Transport and Highways had indicated that about 10,000 readers would be needed and it was
proposed to be done centrally. CCT, Kerala, stated that one could go for ANPR (Automatic Number
Plate Reader), GPS or RFID but it should be done nationally. The Secretary sated that the technology
platform should be common. Shri Rajiv Jalota, CCT, Maharashtra stated that all their inter-State check
posts were computerized and RFID enabled and almost 80% of vehicles criss-crossing the State were
also RFID enabled. He stated that all data needed by NIC from his State administration for a pilot
project for integration of data of e-way bill with data of RFID was being shared with them. The Hon’ble
Chairperson observed that Uttar Pradesh, Kerala and Maharashtra had installed RFID readers and
installation cost in Uttar Pradesh was only around Rs.2.10 crore. The RFID system could be integrated
nationally. The Hon’ble Chairperson stated that issues raised by the transporters mainly related to toll
plazas, road checks leading to harassment and very high e-Way bill penalties. He referred to a recent
case where, for a small mistake in e-way bill filing in Madhya Pradesh, a penalty of Rs.1.32 crore was
imposed. Shri Pawan Kumar Sharma, CCT, Madhya Pradesh stated that this issue was discussed in the
Officers meeting on 20 July 2018 and it was decided that Standard Operating Procedure would be made
listing out the various circumstances in which penalties under various sections of GST Law would be
levied. Hon’ble Chairperson also enquired as to why filing of e-way bill was made transporters’ liability.
The Secretary clarified that the liability is primarily of the supplier and only an option was given to the
transporters also to file e-way bill. The Hon’ble Minister from Rajasthan suggested that there should
also be uniformity in the provisions for issuing intra-State e-way bill as presently different States had
notified different procedures. Hon’ble Chairperson stated that at present, the existing system be allowed
to continue and it could be reviewed subsequently.
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35.6. The Council took note of the recommendations of the Report of the Task Force for Seamless
Road Transport Connectivity and agreed that further work should be done by GSTN and DoR in
consultation with the Ministry of Road Transport and Highways.
36. For Agenda Item 8(iii), The Council took note of the recommendations of the Report of the
Task Force for Seamless Road Transport Connectivity and agreed that further work should be done by
GSTN and DoR in consultation with the Ministry of Road Transport and Highways.
Agenda Item 8(iv): Recommendations of the Group of Ministers on Digital Payments
37. Introducing this Agenda Item, the Secretary informed that an additional small Agenda item was
prepared on this issue and circulated as Table Agenda in the Council (attached as Annexure 7 of the
Minutes). He invited the Joint Secretary (TRU-I), CBIC to explain the same. The Hon’ble Chairperson
observed that in the earlier meeting of the Council, the main concern expressed was that the scheme of
2% reduction in GST would not benefit the poor and the benefit could be taken away by the rich people
– a concern also expressed by the Hon’ble Ministers of Kerala and West Bengal. He observed that the
concern was right and that the new proposal was aimed to benefit the poor and the lower middle-class
persons. He added that one big benefit would be that people would be encouraged to ask for bills while
making purchases in order to get advantage of the monetary incentive.
37.1. The Joint Secretary, TRU-I, CBIC informed that the Group of Ministers on Digital Payments
constituted by the Council had recommended that its implementation may be deferred for some time as
GST had not stabilised; new return process was still work-in-progress; GST revenue was still to reach a
comfortable level; and that the revenue implications of the proposal were significant. He stated that it
was a common view that digital transactions need to be incentivized but concerns were expressed
regarding its coverage under GST, revenue implications, targeted beneficiaries of such incentives and
implementation modalities. He stated that these aspects were re-examined keeping in view the fact that
digital payments have far reaching positive implications for the economy. He stated that apart from
providing visible upfront benefits of making digital payments and thereby incentivizing digital
payments, it would also result in better compliance, gradual formalisation of economy, reduction in cash
transactions and consequently buoyancy in revenue.
37.2. He stated that the revised proposal before the Council was: -
(i) the GST concessions on digital payments be given on the B2C transactions through the modes
that are used across the country. Accordingly, it is proposed that to begin with, concession be
given only on the B2C transactions made through RuPay (Debit Card) and UPI-Unified Payment
Interface, Bharat Interface for Money, Unstructured Supplementary Service Data.
(ii) the GST concession shall be given by way of refund to the consumer in his account through an
automated route.
(iii) the concession shall be 10% of the CGST, 10% of SGST paid subject to the total ceiling of
Rs.100 (Rs.50 CGST and Rs.50 SGST) per transaction. This concession would be available to
supplies made by regular registered persons.
(iv) The CGST amount given as cash back shall be pooled in by the Centre and SGST amount shall
be pooled in by the respective States.
(v) upon approval of the proposal, the exact modalities for providing the concession shall be put in
place in consultation with the Line Ministry (Ministry of Electronics & Information Technology).
37.3. He stated that this proposal would ensure wide coverage in terms of consumers, simplified
implementation and direct incentive to the consumers. IT infrastructure to implement account-linked
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refund was already available as similar cash back was already in operation for auto fuels but it may
require some minor tweaking.
37.4. He stated that as regards revenue implication, a large number of digital transactions may be
done for utility payments and other payments which do not attract GST. The benefit would only accrue
on B2C transactions involving GST supplies. Further, the benefit would be restricted to Rs.100 per
transaction. He stated that if 25% of transactions were eligible for concession, then the revenue
implication would be about Rs.1239 crore and if 20% of the transactions got the benefit, then revenue
implication would be about Rs.991 crore.
37.5. He emphasised that the benefit was now proposed to be given on 20% of GST, instead of 2%
of taxable supply attracting GST rate of 3% and above (as was proposed initially) and credit cards and
debit cards (other than RuPay) would not be eligible for this benefit. He also stated that the benefit
would be given as instant cash payment in the bank account of the consumer through NPCI (National
Payments Corporation of India). The Hon’ble Chairperson stated that tax would be collected in the
formal mode and the money would be paid through NPCI. He observed that RuPay card was used
mostly by about 30 crore Jan-Dhan account holders who were comparatively poor people. He stated
that the idea was to support such people and that their expenditure on purchases should also become part
of the formal economy but without changing the GST rate.
37.6. The Hon’ble Deputy Chief Minister of Bihar stated that had this proposal come to the Group of
Ministers on Digital Payment, they would have approved it, as this was a better option. He observed
that this proposal did not require tweaking of tax rate. He also appreciated the idea of excluding credit
card/debit card and making payment through RuPay. He stated that the GOM on Digital Payment could
look into the issue afresh and make recommendation taking into account the new proposal.
37.7. The Hon’ble Ministers from Odisha and Rajasthan stated that they would prefer to study this
proposal further. The Hon’ble Chairperson suggested that no announcement be made for this decision
immediately. If any the Hon’ble Minister found it objectionable, he could personally get in touch with
him.
37.8. The Secretary stated that the cash back under this scheme would be given through NPCI and
would take place almost immediately when the card was swiped. The incentive would be to the tune of
20% of the GST paid. He stated that initially, some amount, say about Rs.1,000 crore, could be pooled
in by the Centre and the States out of settlement money in the same proportion as the revenue base of
each State to be protected. This amount could be given in advance to NPCI. The other option could be
to give this amount from the Compensation Fund and then review the situation after one year. The
Hon’ble Minister from Assam suggested that for the first year, this amount could be given from the
Compensation Fund. The Secretary stated that however, there would be a legal problem as the amount
under the Compensation Fund could only be used for giving compensation to the States. He said that
instead of that, the amount could be given from the IGST Settlement Fund.
37.9. The ACS, Odisha stated that one of the important highlights of the scheme should have been to
promote formalisation of Composition taxpayers but purchases from Composition taxpayers was being
excluded from this incentive scheme. He noted that large number of poor persons buy from
Composition taxpayers and there could be criticism that incentive was not available to such suppliers
from whom the poor people mostly purchased their goods. He suggested that this aspect should be
looked into again. The Hon’ble Chairperson observed that the problem was that the Composition
taxpayers did not issue an invoice and charge tax. He stated that the scheme would also be advantageous
for small taxpayers whose compliance was presently opaque. This would give purchaser an incentive
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to ask for a bill. The CCT, West Bengal stated that the Hon’ble Finance Minister of West Bengal had
raised various points on this issue and as GoM on Digital Payment is already working on the subject,
the revised proposal could be sent the GoM who could examine it and then give its recommendation to
the Council. The Hon’ble Chairperson agreed to this suggestion and suggested that the revised proposal
tabled today could be sent to the GoM on Digital Payments for further examination and refinement and
the same could be discussed during the next Council Meeting of 4 August, 2018. The Council agreed
to this suggestion.
38. For Agenda Item 8(iv), the Council approved that the revised proposal presented in today’s
Council meeting (Annexure 7 to the Minutes) shall be sent to GoM on Digital Payments for further
examination and refinement and to be taken up in the next Council Meeting of 4 August, 2018.
Agenda Item 8(v): Interim Report of the Group of Ministers on Imposition of Sugar Cess
39. Introducing this Agenda Item the Secretary informed that the Group of Ministers (GoM) on
Imposition of Sugar Cess had submitted an interim report wherein it has recommended the following: -
i. Power to levy Cess by the Union or States: The GoM is of the view that since the matter is sub
judice in the Hon’ble Supreme Court, it would be advisable to wait till the final judgement of the
Hon’ble Supreme Court is given on Constitutional validity of imposition of compensation cess
under GST.
ii. Levy of 1% Agriculture Cess on certain commodities: It was decided that the idea of levy of
an agriculture cess can be further deliberated in detail in the next meeting of the GoM on 21st July,
2018.
iii. Reduction of GST on ethanol: GST on ethanol can be reduced from 18% to 12% only when it
is supplied to oil marketing companies.

39.1. He stated that the opinion of Attorney General was still awaited and, therefore, at this stage, the
issue of imposition of Sugar Cess may be kept in abeyance and the Government of India could further
deliberate on the same. He noted that as regards the proposal to reduce rate of tax on ethanol, when
supplied to Oil Marketing Companies, has already been approved by the Council and that it would be
charged to tax at the rate of 5%.

40. For Agenda Item 8(v), the Council approved to await the opinion of the Attorney General of
India (AG) regarding the Constitutional validity of imposition of Cess under GST.
Agenda Item 8(vi): Recommendations of the Group of Ministers on Reverse Charge Mechanism
41. The Secretary stated that the Group of Ministers (GoM) had agreed that the formulation
proposed by the Law Committee to give power to the Council to notify a class of registered persons who
shall, in respect of taxable goods or services or both received from an unregistered supplier, pay the tax
on reverse charge basis. He stated that the GoM had also recommended for prescribing certain
conditions by the GST Council while recommending introduction of RCM on a class of registered
persons who received goods or services or both from an unregistered supplier. It had also recommended
that the Law Committee may consider the issue of exclusion of Brick Kilns, Menthol and Sand Mining
activities from the benefit of Composition scheme. He suggested that the Council may approve the
recommendations of GoM. The Council approved the same. The Secretary raised an issue regarding
the treatment of the existing Section 9 (4) after period of its current suspension up to 30th September,
2018 expired. The Hon’ble Chairman suggested that Section 9 (4) of CGST/SGST Act could remain
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suspended for another one year beyond 30 September, 2018, i.e. till 30 September, 2019. The Council
agreed to this suggestion.
42. For Agenda item 8(vi), the Council approved the following: -
(i) The existing Section 9(4) of the CGST Act/SGST Acts may be omitted and a new provision may
be inserted in line with the formulation proposed by the Law Committee and the Law Review
Committee which reads as follows:
“9 (4) The Government may, on the recommendations of the Council, by notification,
specify a class of registered persons who shall, in respect of taxable goods or services
or both received from an unregistered supplier, pay the tax on reverse charge basis as
the recipient of such goods or services or both, and all the provisions of this Act shall
apply to such recipient as if he is the person liable for paying the tax in relation to the
supply of such goods or services or both.”
(ii) The proposed formulation at paragraph 3 (i) above should be modified to also provide for
prescribing certain conditions by the GST Council while recommending introduction of RCM on
a class of registered persons receiving goods or services or both from an unregistered supplier.
Further, there should be a provision to levy tax on RCM basis only on select goods or services or
both as may be notified on the recommendations of the Council.
(iii) The Law Committee may consider the issue of exclusion of Brick Kilns, Menthol and Sand
Mining activities from the benefit of Composition scheme.
(iv) To extend suspension of Section 9(4) of CGST/SGST Acts for another one year beyond 30
September, 2018 i.e. till 30 September 2019.
Agenda Item 9: Minutes of 9th Meeting of Group of Ministers (GoM) on IT challenges in GST
implementation for information of the Council and discussion on GSTN issues
43. The Secretary invited the Hon’ble Deputy Chief Minister of Bihar to give an update about the
9th Meeting of GoM on IT challenges in GST implementation. The Hon’ble Deputy Chief Minister of
Bihar stated that they reviewed issues like Overall Statistics, Return Filing, MIS Reports, Identification
and Implementation of Mobile Applications, Pending Functionalities and Analytics, Software
Malfunction and e-Way Bill. He further informed that 16 reports had been identified which Infosys
would be preparing under the module of business intelligence and analytics. He further stated that GSTN
was sharing reports with the States regarding the difference in the figures of supplies indicated in GSTR-
1 and the corresponding GSTR-3B. He stated that presently, provisions of Tax Deduction at Source in
the GST Law had been postponed and by September, 2018, GSTN would be ready to launch it. He
proposed that provision in GST Law on Tax Deduction at Source (TDS) could be implemented from 1
October 2018. The Secretary stated that since provisions of TDS had been extended till 30 September,
2018, it need not be extended further and requested the Council to agree to the suggestion of the Hon'ble
Deputy Chief Minister of Bihar. The Council agreed to this suggestion.
43.1. The CEO, GSTN informed that the GoM had suggested to conduct another round of training for
TDS starting with the major departments in a staggered manner. The CCT, West Bengal suggested not
to start TDS in a staggered manner as they have Integrated Financial Management System; so, they
either change it or not. She added that a lot of other States may have this issue. The Hon’ble Deputy
Chief Minister of Bihar stated that staggered manner meant that one could start implementation of TDS
with Works departments such as Road, Irrigation, etc. and then other departments could be brought in
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the TDS framework. The Secretary suggested that Joint Secretary, DoR along with CEO, GSTN, ACS,
Odisha and CCT, West Bengal should study the subject of integration of Accounting systems of the
State Accounting Authorities and PFMS (Public Financial Management System) with GSTN. He
further stated that they should also check the state of preparedness of the States to implement TDS and
whether to do in stages or at one go. The Secretary further stated that they would also examine that if
TDS was to be introduced in stages, whether it would require change in the GST Law. The Council
approved these suggestions. The Council also took note of the minutes and approved to introduce Tax
Deduction at Source (TDS) from 1 October 2018 subject to verification of readiness of States to
implement TDS.
44. For Agenda Item 9, the Council:
(i) took note of the Minutes of the 9th Meeting of Group of Ministers (GoM) on IT challenges in
GST implementation held on 14 July 2018;
(ii) approved to introduce Tax Deduction at Source (TDS) from 1 October 2018 subject to
verification of readiness of States to implement TDS; and
(iii) to constitute a Committee under the convenorship of Joint Secretary, DoR and comprising of
CEO, GSTN, ACS, Odisha and CCT, West Bengal to examine integration of Accounting system
of the State Accounting Authorities, PFMS with GSTN; to check the preparedness of the States
to implement TDS; to examine the feasibility of introducing TDS in stages or at one go; and to
examine any changes in GST law required for introducing TDS in stages.
Agenda Item 10: Ad hoc exemptions Order(s) issued under Section 25(2) of Customs Act, for
information of the GST Council
45. The Secretary stated that this was a formal Agenda placed for the information of the Council
with reference to the power given to the Hon’ble Union Finance Minister to grant ad hoc exemption
under the Customs Act. He informed that an ad hoc exemption Order on 6 July 2018 (Order No. AEO
No.01 of 2018) was issued under Section 25(2) of the Customs Act 1962 on the request of Government
of Haryana for exemption from Customs duty on import of Pneumococcal Conjugate Vaccine (PCV)
procured through UNICEF. He informed that the IGST involved for this exemption was approximately
Rs. 1 crore. The Council took note of this ad hoc exemption order.
46. For Agenda Item 10, the Council took note of the ad hoc Exemption Order No. AEO No.01 of
2018 dated 6 July 2018 on import of Pneumococcal Conjugate Vaccine (PCV) procured through
UNICEF.
Agenda item 11: Any other agenda item with the permission of the Chairperson
47. No Member raised any issue under this agenda item.
Agenda item 12: Date of the next meeting of the GST Council
48. The Hon’ble Chairperson stated that he had a meeting with the Hon’ble Minsters of the States
in the morning and they all expressed that MSMEs (Micro, Small and Medium Enterprises) were facing
a lot of problem. He stated that while GST was a great story for big units, it was not so for small units.
He, therefore, suggested that one Council meeting should be devoted to small scale sector and this
meeting could be called in two weeks’ time, i.e. on 4 August 2018. He further suggested that after the
next meeting of the Council, the Council could meet again in Goa in the last week of September.
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48.1. The Hon’ble Deputy Chief Minster, Bihar suggested that a few organizations working for
MSMEs could also be called to understand and examine their issues of concern. The Hon’ble
Chairperson stated that States should also invite views regarding problems being faced by MSMEs and
could make a brief presentation. The Hon’ble Minster from Assam stated that they would obtain
representations from small industry and also from the Ministry of Industry. The Secretary stated that it
was a good idea to get suggestions from grassroots but spadework needed to be done in advance to find
out solutions. He stated that suggestions should be sent in advance so that enough time was available
to examine them. The Hon’ble Chairperson stated that all suggestions should be obtained by end of
next week. Specific State-related issues should be sent along with possible solution to problems being
faced.
49. The meeting ended with a vote of thanks to the Chair.

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Annexure 1
List of Ministers who attended the 28th GST Council Meeting on 21 July 2018
Sl
No State/Centre Name of Hon'ble Minister Charge
1 Govt of India Shri Piyush Goyal Union Finance Minister
2 Govt of India Shri S.P. Shukla Minister of State (Finance)
3 Andhra Pradesh Shri Yanamala Ramakrishnudu
Minister of Finance, Planning, CT and
Legislative Affairs
4 Arunachal Pradesh Shri Jarkar Gamlin Minister for Taxation and Excise
5 Assam Dr Himanta Biswa Sarma Finance Minister
6 Bihar Shri Sushil Kumar Modi Deputy Chief Minister
7 Chhattisgarh Shri Amar Agrawal Minister of Commercial taxes
8 Delhi Shri Manish Sisodia Deputy Chief Minister
9 Goa Shri Mauvin Godinho Minister for Panchayat
10 Gujarat Shri Nitinbhai Patel Deputy Chief Minister
11 Haryana Capt. Abhimanyu Excise & Taxation Minister
12 Kerala Prof. C Raveendra Nath Minister for Education
13 Madhya Pradesh Shri Jayant Malaiya Minister of Finance & CT
14 Maharashtra Shri Sudhir Mungatiwar Finance Minister
15 Meghalaya Shri Conrad K. Sangma Chief Minister
16 Mizoram Shri Lalsawta Finance Minister
17 Odisha Shri Shashi Bhusan Behera Finance Minister
18 Puducherry Shri V. Narayanaswamy Chief Minister
19 Punjab Shri Manpreet Singh Badal Finance Minister
20 Rajasthan Shri Rajpal Singh Shekhawat Minister of Industries
21 Tamil Nadu Shri D. Jayakumar
Minister for Fisheries and Personnel
& Administrative Reforms
22 Tripura Shri Jishnu Dev Varma Deputy Chief Minister
23 Uttarakhand Shri Prakash Pant Finance Minister

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Annexure 2
List of Officers who attended the 28th GST Council Meeting on 21 July 2018
Sl
No
State/Centre Name of the Officer Charge
1 Govt. of India Dr. Hasmukh Adhia Finance Secretary
2 Govt. of India Dr. Arvind Subramanian Chief Economic Adviser
3 Govt. of India Shri S Ramesh Chairman, CBIC
4 Govt. of India Shri Mahender Singh Member (GST), CBIC
5 Govt. of India Dr. John Joseph Member (Budget), CBIC
6 Govt. of India Shri G. C. Murmu Special Secretary, DoR
7 Govt. of India Shri P.K. Mohanty Adviser (GST), CBIC
8 Govt. of India Shri P.K. Jain Pr. DG, DG-Audit, CBIC
9 Govt. of India Shri Sandeep M. Bhatnagar DG, DG Anti-Profiteering, CBIC
10 Govt. of India Shri G.D. Lohani Joint Secretary, TRU I, DoR
11 Govt. of India Shri Manish Kumar Sinha Joint Secretary, TRU II, DoR
12 Govt. of India Shri Ritvik Pandey Joint Secretary, DoR
13 Govt. of India Dr. Rajiv Mani
Joint Secretary, Ministry of Law &
Justice
14 Govt. of India Shri Upender Gupta Commissioner (GST), CBIC
15 Govt. of India Shri Yogendra Garg ADG, GST, CBIC
16 Govt. of India Shri S.K. Rehman ADG, GST, CBIC
17 Govt. of India Shri Amit Mohan Govil Commissioner, TPRU
18 Govt. of India Shri D.S. Malik DG (M&C)
19 Govt. of India Shri Rajesh Malhotra ADG (M&C)
20 Govt. of India Shri Reyaz Ahmad Director, TRU I
21 Govt. of India Shri N K Vidyarthi Director, TRU II
22 Govt. of India Shri Parmod Kumar OSD, TRU-II, DoR
23 Govt. of India Shri Gaurav Singh Deputy Secretary, TRU-I, DoR
24 Govt. of India Shri Pramod Kumar Deputy Secretary, TRU-II, DoR
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25 Govt. of India Shri N Gandhi Kumar Deputy Secretary, DoR
26 Govt. of India Shri Ravneet Singh Khurana Joint Comm., GST Policy Wing
27 Govt. of India Shri Vishal Pratap Singh Joint Comm., GST Policy Wing
28 Govt. of India Ms Himani Bhayana Joint Comm., GST Policy Wing
29 Govt. of India Dr Sumit Garg Dy Comm, TPRU
30 Govt. of India Ms Bhagwati Charan Dy. Comm, TPRU
31 Govt. of India Shri K S M Geelani Technical Officer, TRU-I, DoR
32 Govt. of India Gunjan Kumar Varma Technical Officer, TRU-1, DoR
33 Govt. of India Shri Mahipal Singh Technical Officer, TRU-I, DoR
34 Govt. of India Shri Harsh Singh Technical Officer, TRU-II, DoR
35 Govt. of India Ms Nisha Gupta Dy. Comm., GST Policy Wing
36 Govt. of India Shri Siddharth Jain Dy. Comm., GST Policy Wing
37 Govt. of India Ms Gayatri PG Dy. Comm., GST Policy Wing
38 Govt. of India Shri Vikash Kumar Dy. Comm., GST Policy Wing
39 Govt. of India Ms Deepika Singh Asst. Comm., GST Policy Wing
40 Govt. of India Shri Anubhav Kumar AD (M&C)
41 Govt. of India Shri Paras Sankhla OSD to Union Minister
42 Govt. of India Shri Anuj Gupta OSD to Union Finance Minister
43 Govt. of India Shri Ravi Singh Addl PS to Union Finance Minister
44 Govt. of India Shri Mahesh Tiwari PS to MoS
45 Govt. of India Shri Debashis Chakraborty OSD to Finance Secretary
46 GST Council Shri Shashank Priya Joint Secretary
47 GST Council Shri Dheeraj Rastogi Joint Secretary
48 GST Council Shri Rajesh Kumar Agarwal Addl. Commissioner
49 GST Council Shri G.S. Sinha Joint Commissioner
50 GST Council Shri Jagmohan Joint Commissioner
51 GST Council Shri Rakesh Agarwal Dy. Commissioner
52 GST Council Shri Rahul Raja Under Secretary
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53 GST Council Shri Mukesh Gaur Superintendent
54 GST Council Shri Rajeev Mirchia Superintendent
55 GST Council Shri Sandeep Bhutani Superintendent
56 GST Council Shri Vipul Sharma Superintendent
57 GST Council Shri Sarib Sahran Superintendent
58 GST Council Shri Amit Soni Superintendent
59 GST Council Shri Anis Alam Superintendent
60 GST Council Shri Dipendra Kumar Singh Superintendent
61 GST Council Shri Sunil Kumar Superintendent
62 GST Council Ms Sangeeta Dalal Inspector
63 GSTN Shri Prakash Kumar CEO
64 GSTN Ms Kajal Singh EVP (Services)
65 GSTN Shri Nitin Mishra EVP (Services)
66 GSTN Shri Vashistha Chaudhary SVP (Services)
67 GSTN Shri Jagmal Singh VP (Services)
68 GSTN Shri Sarthak Saxena OSD to CEO
69 Govt. of India Shri Kishori Lal
Commissioner, Chandigarh Zone,
CBIC
70 Govt of India Shri Yogesh Kumar Agrawal
Commissioner, Meerut Zone,
CBIC
71 Govt of India Shri Neerav Kumar Mallick
Commissioner, Bhopal Zone,
CBIC
72 Govt. of India Shri Pramod Kumar Commissioner, Delhi Zone, CBIC
73 Govt of India Shri G. V. Krishna Rao
Pr. Commissioner, Bengaluru Zone,
CBIC
74 Govt. of India Shri R.C. Sankhla
Commissioner, Lucknow Zone,
CBIC
75 Govt. of India Shri S. Kannan
Commissioner, Chennai Zone,
CBIC
76 Govt. of India Shri Vijay Mohan Jain Commissioner, Rohtak Zone, CBIC
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77 Govt. of India Shri Virender Choudhary
Commissioner, Vadodara Zone,
CBIC
78 Govt. of India Shri B.K. Mallick
Commissioner, Kolkata Zone,
CBIC
79 Govt. of India Shri C.K. Jain Commissioner, Jaipur Zone, CBIC
80 Govt. of India Shri Milind Gawai Commissioner, Pune Zone, CBIC
81 Govt. of India Shri B. Hareram
Pr. Commissioner, Vishakhapatnam
Zone, CBIC
82 Govt. of India Shri Sanjay Mahendru
Commissioner, Mumbai Zone,
CBIC
83 Govt. of India Shri Nitin Anand Commissioner, Ranchi Zone, CBIC
84
Andaman &
Nicobar Islands
Shri Mukesh Rajora Asst. Comm (SA)
85
Andaman &
Nicobar Islands
Shri Mohan Saroj Ranjan Asst. Comm (GST)
86 Andhra Pradesh Shri J.Syamala Rao Chief Commissioner, State Tax
87 Andhra Pradesh Shri T.Ramesh Babu Additional Commissioner, CT
88
Arunachal
Pradesh
Shri Anirudh S Singh Commissioner (Tax & Excise)
89 Assam Shri Anurag Goel Commissioner, CT
90 Assam Shri Shakeel Saadullah Jt. Commissioner
91 Bihar Ms Sujata Chaturvedi
Principal Secretary, Finance and
CTD
92 Bihar Shri Arun Kumar Mishra Additional Secretary, CTD
93 Bihar Shri Mukesh Kumar Commercial Tax Officer
94 Chandigarh Shri Jitendra Yadav E & T Commissioner
95 Chandigarh Shri Sanjeev Madaan ETO
96 Chhattisgarh Shri Amitabh Jain Principal Secretary finance & CT
97 Chhattisgarh Smt Sangeetha P Commissioner, CT
98 Chhattisgarh Ms Nimisha Jha Jt. Comm., CT
99 Daman & Diu Shri Suresh L Kamble Asst. Commissioner, UT GST
100 Delhi Ms Renu Sharma Pr. Secretary, Finance
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101 Delhi Shri H. Rajesh Prasad Commissioner, State Tax
102 Delhi Shri Anand Kumar Tiwari Addl. Commissioner, GST
103 Goa Shri Dipak Bandekar Commissioner, CT
104 Gujarat Dr. P.D. Vaghela Commissioner of State Tax
105 Haryana Shri Sanjeev Kaushal Addl Chief Secretary, E & T Dept
106 Haryana Ms Ashima Brar E&T Commissioner
107
Himachal
Pradesh
Shri Jagdish Chander Sharma Principal Secretary (E&T)
108
Himachal
Pradesh
Shri Rajeev Sharma
Commissioner of State Tax and
Excise
109
Himachal
Pradesh
Shri Rakesh Sharma Joint Commissioner
110
Jammu &
Kashmir
Shri Navin K. Choudhary Pr. Secretary, Finance Dept.
111
Jammu &
Kashmir
Shri M Raju Commissioner, CT
112
Jammu &
Kashmir
Shri P K Bhatt ACCT Tax Planning
113 Jharkhand Shri Ajay Kumar Sinha Addl. Commissioner of State Taxes
114 Jharkhand Shri Brajesh Kumar State Tax officer
115 Karnataka Shri Srikar M.S. Commissioner, CT
116 Kerala Dr. Rajan Khobragade
Pr. Secretary & Commissioner,
State GST Dept.
117 Madhya Pradesh Shri Pawan Kumar Sharma Commissioner, CT
118 Madhya Pradesh Shri Sudip Gupta Jt. Commissioner, CT
119 Madhya Pradesh Shri Manoj Kumar Choube Dy. Comm, CT
120 Maharashtra Shri Rajiv Jalota Commissioner, State Tax
122 Maharashtra Shri Dhananjay Akhade Jt. Commissioner, State Tax
123 Maharashtra Shri Sudhir Rathod OSD to Finance Minister
124 Manipur Ms Mercina R. Panmei Commissioner of Taxes
125 Manipur Shri R K Khurkishor Singh Jt. Comm. of Taxes
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126 Manipur Shri Y Indrakumar Singh Asst. Commissioner of Taxes
127 Meghalaya Shri L Khongsit Jt. Commissioner, State Tax
128 Meghalaya Shri K. War Asstt. Commissioner, State Tax
129 Mizoram Shri Vanlal Chhuanga
Commissioner and Secretary to
Govt
130 Mizoram Shri H K Lalhawngliana Jt. Commissioner, State Tax
131 Mizoram Shri H Lianzela Dy Secretary
132 Nagaland Shri Kesonyu Yhome CCT
133 Odisha Shri Tuhin Kanta Pandey ACS, Finance
134 Odisha Shri Saswat Mishra Commissioner, CT
135 Odisha Shri Sahadev Sahoo Addl. Commissioner, CT
136 Puducherry Shri G. Srinivas Commissioner (ST)
137 Punjab Shri M. P Singh
Addl. Chief Secretary-cum-
Financial Commissioner (Taxation)
138 Punjab Shri V. K. Garg
Advisor (Financial Resources) to
CM
139 Punjab Shri Vivek Pratap Singh Excise & Taxation Commissioner
140 Punjab Shri Pawan Garg
Dy. Excise & Taxation
Commissioner
141 Rajasthan Shri Praveen Gupta Secretary Finance (Revenue)
142 Rajasthan Shri Alok Gupta Commissioner, State Tax
143 Rajasthan Ms Meenal Bhosle OSD, Finance
144 Rajasthan Shri Ketan Sharma
Addl. Commissioner, GST, State
Tax Dept
145 Sikkim Shri Manoj Rai Addl. Commissioner, CT
146 Tamil Nadu Shri Ka. Balachandran Prl Secretary, CT & Registration
147 Tamil Nadu Dr. T.V Somanathan ACS/CCT
148 Tamil Nadu Shri K Gnanasekaran Addl. Commissioner (Taxation)
149 Telangana Shri Anil Kumar Commissioner of State Tax
150 Telangana Shri N Sai Kishore Jt. Commissioner, State Tax
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151 Tripura Shri Ashin Barman Superintendent of State Tax
152 Uttar Pradesh Ms Kamini Chauhan Ratan Commissioner, CT
153 Uttar Pradesh Shri Vivek Kumar Addl. Commissioner, CT
154 Uttar Pradesh Shri Brijesh Mishra Joint Secretary, CT
155 Uttar Pradesh Shri Sanjay Kumar Pathak Jt. Commissioner, CT
156 Uttarakhand Shri Piyush Kumar Addl. Commissioner State Tax
157 Uttarakhand Shri Rakesh Verma Joint Commissioner, State Tax
158 West Bengal Ms. Smaraki Mahapatra Commissioner, CT
159 West Bengal Shri Khalid A Anwar Senior Joint Commissioner, CT


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Annexure 3
Decisions of the GST Implementation Committee and IT Grievance Redressal Committee


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Annexure 4
Proposed Changes in GST Laws


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Annexure 5
Presentation on Return Design

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Annexure 6
Table Agenda for reduction in GST rate from 28% to 18% on certain goods
The list of 28% items has been reviewed and it is felt that on certain items GST rate may be reduced
from 28% to 18%. In general, these goods fall under the categories of,-
a) Paints, varnishes and putty;
b) household white goods, namely small TVs (Upto 68 cm), electromechanical domestic
appliances like mixer, juicer, grinder, vacuum cleaner, refrigerators; water heaters, iron etc
c) Special purpose vehicles, work truck, trailers and semi-trailers;
d) Certain equipment of industrial use;
e) Miscellaneous items involving small revenue

2. The details of these goods are as under:
S.
No
HSN Description Present
applicable
GST rate
Proposed
GST rate
1 3208 Paints and varnishes (including enamels and lacquers)
based on synthetic polymers or chemically modified
natural polymers, dispersed or dissolved in a non-
aqueous medium; solutions as defined in Note 4 to this
Chapter
28% 18%
2 3209 Paints and varnishes (including enamels and lacquers)
based on synthetic polymers or chemically modified
natural polymers, dispersed or dissolved in an aqueous
medium
28% 18%
3 3210 Other paints and varnishes (including enamels, lacquers
and distempers); prepared water pigments of a kind used
for finishing leather
28% 18%
4 3214 Glaziers’ putty, grafting putty, resin cements, caulking
compounds and other mastics; painters’ fillings; non-
refractory surfacing preparations for facades, indoor
walls, floors, ceilings or the like
28% 18%
5 8418 Refrigerators, freezers and other refrigerating or freezing
equipment, electric or other; heat pumps other than air
conditioning machines of heading 8415
28% 18%
6 8508 Vacuum cleaners 28% 18%
7 8509 Electro-mechanical domestic appliances, with self-
contained electric motor, other than vacuum cleaners of
heading 8508 [other than wet grinder consisting of stone
as a grinder]
28% 18%
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8 8510 Shavers, hair clippers and hair-removing appliances,
with self-contained electric motor
28% 18%
9 8516 Electric instantaneous or storage water heaters and
immersion heaters; electric space heating apparatus and
soil heating apparatus; electrothermic hair-dressing
apparatus (for example, hair dryers, hair curlers, curling
tong heaters) and hand dryers; electric smoothing irons;
other electro-thermic appliances of a kind used for
domestic purposes; electric heating resistors, other than
those of heading 8545
28% 18%
10 8528 TV upto the size of 68 cm 28% 18%
11 8705 Special purpose motor vehicles, other than those
principally designed for the transport of persons or goods
(for example, breakdown lorries, crane lorries, fire
fighting vehicles, concrete-mixer lorries, road sweeper
lorries, spraying lorries, mobile workshops, mobile
radiological unit)
28% 18%
12 8709 Works trucks, self-propelled, not fitted with lifting or
handling equipment, of the type used in factories,
warehouses, dock areas or airports for short distance
transport of goods; tractors of the type used on railway
station platforms; parts of the foregoing vehicles
28% 18%
13 8716 Trailers and semi-trailers; other vehicles, not
mechanically propelled; parts thereof [other than Self-
loading or self-unloading trailers for agricultural
purposes, and Hand propelled vehicles (e.g. hand carts,
rickshaws and the like); animal drawn vehicles]
28% 18%
14 9504 Video games consoles and Machines, article and
accessories for billiards [9504 20 00], other games
operated by coins, banknotes, i.e., casino games [9504 20
00] and others [other than board games of 9504 90 90]
28% 18%
15 9616 Scent sprays and similar toilet sprays, and mounts and
heads therefor; powder-puffs and pads for the application
of cosmetics or toilet preparations
28% 18%
16 9804 All dutiable articles intended for personal use 28% 18%
17 9614 Smoking pipes (including pipe bowls) and cigar or
cigarette holders, and parts thereof
28% 18%

3. The net revenue loss on account of above reduction will about Rs 6315 crore in a financial year.

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Annexure 7
Table Agenda on Digital Payments
Briefly stated, with an objective to incentivise digital transactions, an Agenda Note [Annexure-I] was
circulated for consideration by the GST Council in its 23rd Meeting [held on 10.11.2017]. The said
Agenda Note proposed for providing a concession of 2% in GST rate [where the GST rate was 3% or
more] on B2C supplies, for which payment is made through digital mode [1% each from applicable
CGST and SGST rates, if the applicable GST rate is 3% or more] subject to a ceiling of Rs. 100 per
transaction, interalia, on the following grounds:

(a) With this incentive, consumer will be offered two prices; one with normal GST rates for
purchases made through cash payment and the other with 2% lower GST rate for digital
payments.
(b) The consumer will see visible benefits of making payments [for supplies received by him]
through digital mode, in terms of reduction in tax amount payable.

1.1. The said Agenda Note also stated that this concession would not be available to supplies made
by registered persons paying tax under the Composition Scheme.
2. The Agenda Note sought in principle approval of the
Council for the above proposal, along with authorisation to the GST Implementation Committee [GIC]
to approve changes in the CGST/SGST/UTGST Rules necessary for implementing this proposal.
3. Subsequently, an addendum to the said Agenda Note was placed before the GST Council in its
27th meeting (held on the 04.05.2018) [Annexure II].
4. The GST Council constituted a GOM to look into the issue. The GOM after detailed deliberations
concluded that while the proposal is good for the economy, its implementation may be deferred for some
time as GST is yet not fully stabilised, the new return process is still work in progress, GST revenue still
to reach a comfortable level and the revenue implications of the proposal are significant. [Agenda Note.
8 refers]
5.1 While it is a common view that digital transactions needs to be incentivised, certain concerns have
been expressed as regard its coverage in GST, revenue implications, beneficiary of such incentive, and
implementation modalities.
5.2 These aspects have been re-examined. Incentivising digital payments have far reaching positive
implications for the economy. Apart from providing visible upfront benefits of making digital payments
and thereby incentivising digital payment, it will also result in,-
a) better compliance;
b) gradual formalisation of economy;
c) reduction in cash transactions and
d) accordingly, a buoyancy in revenue

5.3 Accordingly, following proposal is placed before the council:
i) the GST concessions on digital payments be given on the B2C transactions through the
modes that are used across the country. Accordingly, it is proposed that to begin with GST
concession be given only on the B2C transactions made through RuPay (Debit Card) and
UPI-Unified Payment Interface, BHIM, USSD.
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ii) the GST concession shall be given by way of refund to the consumer in his account through
an automated route.
iii) the concession shall be 10% of the CGST, 10% of SGST paid subject to the total ceiling of
Rs 100 (Rs 50 CGST and Rs 50 SGST) per transaction.
5.4 This proposal would ensure wide coverage in terms of consumers, simplified implementation
and a direct incentive to the consumer. IT infra to implement account linked refund is already available
(similar cash back is already in operation for auto fuels) which may require minor tweaking.
6. Revenue implications:
6.1 The volumes and revenue implication under the proposed modes are as follows:
A. Volumes:
S. No. Modes Volume (17-18)
[In Cr]
Value (17-18)
[In Cr]
1 UPI-Unified Payment Interface, BHIM, USSD 92 109832
2 RuPay (POS) 46 48886
3 RuPay (eCom) 21 16635
Total
Source: NPCI/MeitY
159 175353

B. Revenue implication: A large number of digital transactions may be done for utility payments
or other payments that do not attract GST. The benefit would accrue only on B2C transactions involving
GST supplies. Further Benefit would be restricted to Rs 100 per transaction. Accordingly, revenue
estimation done is as follows.
S. No. Description Amount
1 Average value per transaction Rs 1103
2 Weighted average GST rate 14%
3 If 33% of the above stated transactions are eligible
for benefit-the revenue implication at the rate of 20%
of GST paid would be = Total Value*(33%)*weighted
rate (5)*20%
Rs 1636 cr
4 If 25% of the transactions are eligible for concession,
the implication would be
Rs 1239 cr
5 If 20% of the transactions get the benefit, the GST
concession would be
Rs 991 cr

7. In the above background, the Council may consider providing a concession equal to 20% GST
paid on B2C supplies, for which payment is made through digital mode of UPI-Unified Payment
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Interface, BHIM, USSD and RuPay Debit card [10% each from applicable CGST and SGST rates, or as
the case may be, 20% of IGST paid] subject to a ceiling of Rs. 100 per transaction. This concession
would, however, not be available to supplies made by registered persons paying tax under the
Composition Scheme.

8. The CGST amount given as cash back shall be pooled in by the Centre and SGST amount shall
be pooled in by the Respective States.

9. On approval of the proposal, the exact modalities for providing the concession shall be put in
place in consultation with the Line Ministry (MeitY).

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Second Addendum to Agenda Note on
Incentives to promote Digital Transactions
(CIRCULATED FOR GST COUNCIL MEETING HELD ON 10TH NOVEMBER, 2017)
Briefly stated, with an objective to incentivise digital transactions, an Agenda Note [Annexure-I] was
circulated for consideration by the GST Council in its 23rd Meeting [held on 10.11.2017]. The said
Agenda Note proposed for providing a concession of 2% in GST rate [where the GST rate was 3% or
more] on B2C supplies, for which payment is made through digital mode [1% each from applicable
CGST and SGST rates, if the applicable GST rate is 3% or more] subject to a ceiling of Rs. 100 per
transaction, interalia, on the following grounds:

(a) With this incentive, consumer will be offered two prices; one with normal GST rates for
purchases made through cash payment and the other with 2% lower GST rate for digital
payments.
(b) The consumer will see visible benefits of making payments [for supplies received by him]
through digital mode, in terms of reduction in tax amount payable.

The said Agenda Note also stated that this concession would not be available to supplies made by
registered persons paying tax under the Composition Scheme.
2. The Agenda Note sought in principle approval of the
Council for the above proposal, along with authorisation to the GST Implementation Committee [GIC]
to approve changes in the CGST/SGST/UTGST Rules necessary for implementing this proposal.
3. Subsequently, an addendum to the said Agenda Note was placed before the GST Council in its
27th meeting (held on the 04.05.2018) [Annexure II].
4. The GST Council constituted a GOM to look into the issue. The GOM after detailed deliberations
concluded that while the proposal is good for the economy, its implementation may be deferred for some
time as GST is yet not fully stabilised, the new return process is still work in progress, GST revenue still
to reach a comfortable level and the revenue implications of the proposal are significant. [Agenda Note.
8 refers]
5.1 While it is a common view that digital transactions needs to be incentivised, certain concerns have
been expressed as regard its coverage in GST, revenue implications, beneficiary of such incentive, and
implementation modalities.
5.2 These aspects have been re-examined. Incentivising digital payments have far reaching positive
implications for the economy. Apart from providing visible upfront benefits of making digital payments
and thereby incentivising digital payment, it will also result in,-
a) better compliance;
b) gradual formalisation of economy;
c) reduction in cash transactions and
d) accordingly, a buoyancy in revenue

5.3 Accordingly, following proposal is placed before the council:
i) the GST concessions on digital payments be given on the B2C transactions through the
modes that are used across the country. Accordingly, it is proposed that to begin with GST
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concession be given only on the B2C transactions made through RuPay (Debit Card) and
UPI-Unified Payment Interface, BHIM, USSD.
ii) the GST concession shall be given by way of refund to the consumer in his account through
an automated route.
iii) the concession shall be 10% of the CGST, 10% of SGST paid subject to the total ceiling of
Rs 100 (Rs 50 CGST and Rs 50 SGST) per transaction.
5.4 This proposal would ensure wide coverage in terms of consumers, simplified implementation
and a direct incentive to the consumer. IT infra to implement account linked refund is already available
(similar cash back is already in operation for auto fuels) which may require minor tweaking.
6. Revenue implications:
6.1 The volumes and revenue implication under the proposed modes are as follows:
A. Volumes:
S. No. Modes Volume (17-18)
[In Cr]
Value (17-18)
[In Cr]
1 UPI-Unified Payment Interface, BHIM, USSD 92 109832
2 RuPay (POS) 46 48886
3 RuPay (eCom) 21 16635
Total
Source: NPCI/MeitY
159 175353

B. Revenue implication: A large number of digital transactions may be done for utility payments
or other payments which do not attract GST. The benefit would accrue only on B2C transactions
involving GST supplies. Further Benefit would be restricted to Rs 100 per transaction. Accordingly
revenue estimation done is as follows.
S. No. Description Amount
1 Average value per transaction Rs 1103
2 Weighted average GST rate 14%
3 If 33% of the above stated transactions are eligible
for benefit-the revenue implication at the rate of 20%
of GST paid would be = Total Value*(33%)*weighted
rate (5)*20%
Rs 1636 cr
4 If 25% of the transactions are eligible for concession,
the implication would be
Rs 1239 cr
5 If 20% of the transactions get the benefit, the GST
concession would be
Rs 991 cr

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7. In the above background, the Council may consider providing a concession equal to 20% GST
paid on B2C supplies, for which payment is made through digital mode of UPI-Unified Payment
Interface, BHIM, USSD and RuPay Debit card [10% each from applicable CGST and SGST rates, or as
the case may be, 20% of IGST paid] subject to a ceiling of Rs. 100 per transaction. This concession
would, however, not be available to supplies made by registered persons paying tax under the
Composition Scheme.

8. The CGST amount given as cash back shall be pooled in by the Centre and SGST amount shall
be pooled in by the Respective States.

9. On approval of the proposal, the exact modalities for providing the concession shall be put in
place in consultation with the Line Ministry (MeitY).

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ANNEXURE – I

Incentives to promote Digital Transactions
[FOR GST COUNCIL MEETING TO BE HELD ON 10th November, 2017]
To incentivise digital transaction it is proposed to provide a concession of 2% in GST rate on B2C
supplies, for which payment is made through digital mode [1% each from applicable CGST and SGST
rates, if the applicable GST rate is 3% or more] subject to a ceiling of Rs. 100 per transaction. This
effectively means that applied rate of GST for such transactions will be 2% lower than the otherwise
applicable GST rate, though subject to a ceiling of Rs. 100 per transaction for such incentive. This
scheme, however, would not be available to registered persons paying tax under the composition
scheme.
2. With this incentive, consumer will be offered two prices; one with normal GST rates for
purchases made through cash payment and the other with 2% lower GST rate for digital payments. As
a result the consumer will see visible benefits of making payments [for supplies received by him]
through digital mode, in terms of reduction in tax amount payable.
3. For example, if the GST rate applicable to supply a particular goods/service is 18%, then B2C
supply of such goods, where payment made through digital mode will be 16%, subject to a maximum
GST concession of Rs. 100 per transactions.
Illustration:
Value of goods/service= Rs 5000
Tax payable if payment made in cash = Rs 900 [18% of Rs. 5000]
Tax payable if payment made digitally = Rs 800 [16% of Rs. 5000]
Upfront tax incentive to the customer = Rs 100.

4. Estimated revenue implication [based on information provided by MeitY]
• In 2016-17, the number of digital transactions was 1076 crore. Average value per
transaction (based on debit and credit card transaction) was Rs 1833. Out of this the
transaction below Rs 1000 were 16%, between Rs 1000 and Rs 2000, were 14%, and
above Rs 2000 were 70%.
• In 2017-18, the estimated number of digital transaction for the financial year 1800. Till
Oct this number was 1000 crore.
• Based on these numbers ( taking annual number of digital transaction as 1800 crore),
the revenue implication of the proposal is estimated to be as follows:





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Tax relief (2%)

Taking Average size (Rs) 1500 1800

% of transaction getting benefit Tax Implication (Rs Crore)
20% 10800 12960
30% 16200 19440
40% 21600 25920

5. The loss in tax revenue may however be recovered to certain extent through better compliance.
It would further encourage digital payment and consumer would seek these services from merchants.
6. This proposal was discussed by the Fitment Committee on 30th October, 2017, but the
Committee could not arrive at consensus on the issue.
7. It is proposed that the Council may kindly accord in principle approval to this proposal. Further the
GIC may be authorised to approve the changes in the CGST / SGST/UTGST Rules, as recommended by
the Law Committee, in order to implement this proposal.

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Annexure - II
ADDENDUM TO AGENDA NOTE
Incentives to promote Digital Transactions
[CIRCULATED FOR GST COUNCIL MEETING HELD ON 10TH NOVEMBER, 2017]
Briefly stated, with an objective to incentivise digital transactions, an Agenda Note [Annexure-I] was
circulated for consideration by the GST Council in its 23rd Meeting [held on 10.11.2017]. The said
Agenda Note proposed for providing a concession of 2% in GST rate [where the GST rate was 3% or
more] on B2C supplies, for which payment is made through digital mode [1% each from applicable
CGST and SGST rates, if the applicable GST rate is 3% or more] subject to a ceiling of Rs. 100 per
transaction, interalia, on the following grounds:
(a) With this incentive, consumer will be offered two prices; one with normal GST rates for
purchases made through cash payment and the other with 2% lower GST rate for digital
payments.
(b) The consumer will see visible benefits of making payments [for supplies received by him]
through digital mode, in terms of reduction in tax amount payable.

The said Agenda Note also stated that this concession would not be available to supplies made by
registered persons paying tax under the Composition Scheme.

2. The Agenda Note sought in principle approval of the
Council for the above proposal, along with authorisation to the GST Implementation Committee [GIC]
to approve changes in the CGST/SGST/UTGST Rules necessary for implementing this proposal.
3. Taking the annual number of digital transaction as 1800 crore [which included all modes of
digital transactions], the revenue implication of the proposal was estimated as under:


Tax relief (2%)
Taking average transaction size (Rs) 1500 1800

% of transaction getting benefit Tax Implication (Rs Crore)
20% 10800 12960
30% 16200 19440
40% 21600 25920

4. However, due to paucity of time the said Agenda Note was not discussed by the GST Council
in its 23rd meeting [held on 10.11.2017] and in 25th meeting [held on 18.01.2018].
5. As mentioned above, concession of 2% in GST rate on B2C supplies, apart from providing
visible upfront benefits of making digital payments and thereby incentivising digital payment, will also
result in,-
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a) better compliance;
b) gradual formalisation of economy; and
c) reduction in cash transaction vis-à-vis GDP .

6. Meanwhile, the full year granular data, mode wise, on digital payments for 2017-18 was
obtained from MeitY and the details are as under:
S.
No.
Modes Volume (17-18)
[in Cr]
Value (17-18)
[In Lakh Cr]
1 NACH (National Automated Clearing House) 237 9.7
2 IMPS (Immediate Payment Service) 101 8.9
3 UPI + BHIM+USSD [Unified Payments Interface,
Bharat Interface for Money, Unstructured Supplementary
Service Data)
92 1.1
4 RuPay (POS) 46 0.5
5 RuPay (eCom) 20 0.2
6 AEPS Total (Aadhaar Enabled Payment System) 98 0.3
7 BBPS (Bharat Bill Payment System) 3 0.0
8 NETC (National Electronic Toll Collection) 13 0.0
Sub Total ( Source : NPCI) 610 20.7
9 Debit Card ( excluding RuPay) 262 3.9
10 Credit Card 138 4.5
11 NEFT 189 175.1
12 M-Wallet 301 1.1
13 RTGS 12 1500.9
14 PPC 44 0.3
Sub Total ( RBI ) 946 1686
15 Closed Loop 111 0.02

16 Internet Banking 143 99.3
17 Mobile Banking 62 2.7
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18 Others 120 21.5
Sub Total ( BANK ) 325 123.5
Total 1992 1830
Source: MeitY

7. Payment modes namely, RTGS, NEFT, IMPS (Immediate Payment Service), NACH (National
Automated Clearing House), NETC (National Electronic Toll Collection) and Closed Loop may not in
general be used for procuring goods and services. While, the remaining modes, namely,
UPI/BHIM/USSD, RuPay, AEPS, BBPS, Debit Card, Credit Card, m-wallet, PPC, internet banking,
mobile banking and other banking modes are generally used for procuring taxable goods and services.
The volume and value of transactions for these modes and average size of transactions is as below:
Without internet banking
and other transactions [S.
No. 18 of the Table above]
With internet banking and
other transactions [S. No. 18
of the Table above]
Total no of transactions 1066 crore 1329 crore
Value of transactions (Rs.) 14.6 lakh crore 135.4 lakh crore
Average size of transaction (Rs.) 1400 10158

8. Based on above numbers, the revenue implication of the proposal [taking the average size of
the transaction as Rs. 900, Rs, 1200 and Rs. 1400] is re-estimated as under:
Tax relief (2%)
Taking Average size on which concession is
allowed (Rs)
900 1200 1400
A. Without internet banking and other transactions
[No. of transactions being 1066 crore]
% of transaction getting benefit Tax Implication (Rs Crore)
20% 3838 5117 5970
30% 5756 7675 8954
40% 7675 10,234 11,939
B. With internet banking and other transactions
[No. of transactions being 1329 crore]
% of transaction getting benefit Tax Implication (Rs Crore)
20% 4784 6379 7442
30% 7177 9569 11,164
40% 9569 12,758 14,885
Detailed Agenda Note Volume 1 Agedna 29th GSTCM
Page 126 of 126
*Formula for revenue implication = No. of transactions X % of transaction getting benefit X Ticket Size
X 2/ 100
8.1. However, the above revenue implication may vary, as the RTGS, NEFT, IMPS and NACH
modes of digital payments may occasionally, be used for payment for procuring taxable goods and
services.
9. In the above background, the Council may consider providing a concession of 2% in GST rate
[where the GST rate was 3% or more] on B2C supplies, for which payment is made through digital
mode [1% each from applicable CGST and SGST rates, if the applicable GST rate is 3% or more] subject
to a ceiling of Rs. 100 per transaction. This concession would, however, not be available to supplies
made by registered persons paying tax under the Composition Scheme.
10. The exact modalities for providing the concession of 2% in GST would be finalized along with
the new GST return. The proposed concession in GST will be made effective from when the new GST
return will be introduced.




Detailed Agenda Note Volume 1 Agedna 29th GSTCM



Confidential

Agenda for
29th GST Council Meeting
Volume – 2
04 August 2018


Detailed Agenda Note Volume 2 Agenda for 29th GSTCM





Detailed Agenda Note Volume 2 Agenda for 29th GSTCM


File No: 484/29th GSTCM/GSTC/2018
GST Council Secretariat

Room No.275, North Block, New Delhi
Dated: 27 July 2018

Notice for 29th Meeting of the GST Council on 04 August 2018
The undersigned is directed to refer to the subject cited above and to say that the 29th Meeting of the GST Council will be held on Saturday, 4 August
2018 from 11:00 am onwards at Hall No 2-3, Vigyan Bhawan, New Delhi. The Meeting is convened to discuss mainly the issues, concerns and suggestions
of the Micro, Small & Medium Enterprises (MSME) in the GST regime and any other agenda with the permission of the Chairperson of the Council.
2. The Detailed Agenda Note, if any, will be sent separately in due course of time.
3. All State Governments and CBIC are requested to send their suggestions or concrete action points for this single agenda item to Member (GST), CBIC /
GST Council before 29th July, 2018, as discussed in the 28th GST Council Meeting.
4. Please convey the invitation to the Hon’ble Members of the GST Council to attend the meeting.
(-Sd-)
(Dr. Hasmukh Adhia)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653

Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.
2. PS to Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said
meeting.
3. The Chief Secretaries of all the State Governments, Delhi and Puducherry with the request to intimate the Minister in charge of Finance/Taxation or any other
Minister nominated by the State Government as a Member of the GST Council about the above said meeting.
4. Chairperson, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the Council.
5. Chairman, GST Network
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM

Agenda Items for the 29th Meeting of the GST Council on 04 August 2018
1. Confirmation of the Minutes of 28th GST Council Meeting held on 21st July, 2018
2. Discussion to address issues and concerns of Micro, Small & Medium Enterprises (MSME) in GST regime
3. Incentivising Digital Payments in GST Regime
4. Any other agenda item with the permission of the Chairperson
5. Date of the next meeting of the GST Council
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM

TABLE OF CONTENTS
Agenda No. Agenda Item Page No.
2
Discussion to address issues and concerns of Micro, Small & Medium
Enterprises (MSME) in GST regime
6

Detailed Agenda Note Volume 2 Agenda for 29th GSTCM

Discussion on Agenda Items
Agenda Item 2: Discussion to address issues and concerns of Micro, Small & Medium Enterprises (MSME) in GST regime
The GST Council in its 28th meeting held on 21.07.2018 decided to consider all the issues related to the Micro, Small and Medium Enterprises (MSME for
short) in its next meeting to be held on 04.08.2018 after obtaining suggestions from the stakeholders especially at the grass-root level.
2. Accordingly, around 350 actionable suggestions received from the Central and State Governments and Chambers of Industry and Commerce were collated in a
broadsheet and placed in the following four categories:
(i) Administrative-related issues
(ii) Clarifications sought
(iii) Rules and notifications related
(iv) Law-related issues
3. Further, under the above four categories, the suggestions have been placed in the descending order of the frequency of the number of times they have been made
by different stakeholders. Issues which do not pertain to the MSME sector have been segregated and placed in a separate broadsheet.
4. Accordingly, it is proposed to place the broadsheet containing the various proposals/suggestions related to the MSME sector before the GST Council.

Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
S.No. State / UT Name of Trade
Association/Taxpayer
Grievances/Issues Trade Suggestions States Comments Action
1 a. Tripura,          
b. Kerala                
c. CBIC
Tripura Wholesale Grocery 
Merchants Association, Kerala 
State Small Industries 
Association
Manual Return Filing at GST Seva Kendras Providing facility of Manual Return filing at
‘GST Seva Kendras’ (GST Service Centre)
present at Division Level (may be extended to
Range Level) who can file it online for MSME
taxable person against a nominal fee say ₹ 100/-
for monthly payment Return and ₹ 200/- per
quarterly Return.
May be considered. This will facilitate improving the return
filing by the MSME.
Law 
Amendment
2 a. Chhattisgarh, 
b. M.P.;                  
c. Punjab
(a). Laghu Udyog Bharati,   (b). 
Urla Industries Association ;                     
(c).Chamber of Small Industry 
Associations (COSIA),         
(d). Tax Law Bar Association , 
Bhopal ;                                             
(e). MSME & SME Sector, 
Punjab
Audit under GST Law: Audit limit for GST should be raised to Rs. 5
Crore or it should be merged with tax audit
under Income Tax Act. /
Chhattisgarh: 1. There is provision for audit under section 
35(5) as under:- "Every registered person whose turnover
during a financial year exceeds the prescribed limit shall get
his accounts audited by a chartered accountant or a cost
accountant and shall submit a copy of the audited annual
accounts, the reconciliation statement under sub-section(2)
of section 44 and such other documents in such from and
manner as may be prescribed"
At present there is no rule prescribing the turnover limit for 
audit.                                                                                                            
As per provisions of Income Tax Act, audit is compulsory 
where turnover exceeds Rs. 2 Crore, in GST rule the provision 
for audit should be kept on par with Income Tax Act.                                                                                                              
2. The suggestion that GST audit should be merged with 
Income Tax audit, and for this purpose, the format of Income 
Tax audit should be amended so that information required 
under GST could be incorporated in it, can be considered. It 
will not only reduce the cost and compliance burden but also 
provide useful data to both the department for analysis.                                                                    
Notification
3 Maharashtra Chamber Of Small Industry 
Associations, Thane
RAC which was there in Excise & ST  regime shall be  formed.  RAC shall be formed. Bi-monthly to start with 
till the issues sorted out and later, makes it 
once in a quarter
Similar concept of "service cell" is already in place in the 
State. Which conducts meeting regularly with the 
stakeholders. 
Administrative 
Action
4 Maharashtra, 
H.P. 
Vidharbha Industries 
Association, Baddi Barotiwala 
Nalagarh Industries 
Association, H.P. 
The main issue is that Refund of Input Tax Credit must be paid by the Single
Authority as it happens in IGST Refund. Our request to the Government is that the
Refund Sanctioning Authority may it be Central Authority or the State Authority
after Sanctioning the Refund can pay directly the full amount to the Exporter and
can claim the respective share of fund from other authority. This will make the
system more practical. Then only we can Say One Nation One Tax One Authority
and for this if required then constitutional amendment should be brought
immediately or Required amendment can be sort from the Controlling Authorities
or from the GST Council.
Solution may be provided for the same.  The proposal was not approved by the CAG.  Administrative 
Action
5 CBIC Special fortnight drive for refund claims of MSMEs Sector. A Special drive for refunds of MSME Sector 
may also be considered on the lines of refund 
fortnight for Exports
This may be considered to educate the MSME taxpayers and 
for the disposal of refund claims.
Administrative 
Action
6 Assam, 
Uttrakhand, 
Jammu & 
Kashmir
Federation of Industry & 
Commerce of North Eastern 
Region (FINER), SIDCUL 
Manufacturers Association 
Uttarakhand, Kashmir Chamber 
of Commerce & Industries
Timely Refund taxpaid in Cash Ledger: Budgetary Support Scheme was 
announced on 05.10.2017, after which 10 months have elapsed but only few cases 
has been disposed off. Only 21.3 crore is sanctioned so far whereas 214.22 crore 
is pending. This would impact the sustainability of industries.  The figure is higher 
if we consider the cases that has been filed, but has not entered the statistics.
It is urged to keep flow of funds and to initiate 
a mechanism to enable to file refund petitions 
online and should be sanctioned online with in 
a stipulated time. Beyond that Interest should 
be allowed to the units.
DIPP has so far released Rs 567 Crores. Out of total 
sanctioned claims of Rs 583.3 Crores, Rs 509.72 Crores have 
been disbursed. An issue here also is that sanction of more 
than Rs 50 Lacs needs approval of Pr.  CCA before disbusal. 
Also, additonal Rs 567 Crores are required for claering claims 
pertaining to first two (02) quarters of the year 2018 -19.
DIPP
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
7 Sikkim, 
Nagaland
Directorate of MSME, Gangtok The technicalities of online filing and legalities of new regime have generated fear
among small taxpayers. This category of taxpayers are neither well educated to
understand the law oneself nor they are tech-savy to follow online system on their
own. Moreover, they cannot afford to hire services of advocate or chartered
accountants also.                                        
The affordable category of GST Practitioner
group has to be developed in joint initiative of
MSME Directorate and State CTD. The
programme should be so designed that all the
towns of the State can be covered.                                                                                                    
Sikkim CTD has already trained one batch of 25 graduates for
providing GST Practitioner service in Gangtok. They are
catering to the small taxpayers of Gangtok and sorrounding
areas. State CTD intends to continue the programme for
covering other areas. The assistance of MSME Directorate for
providing capital loans to the aspiring candidate would give
further boost to the initiative.
Administrative 
Action
8 Punjab Mohali Industries Association The MSME and SME Sector is facing hardship while dealing with the legacy 
issues under VAT. Assessments are being framed under VAT in various states. 
However, the assesees are grafling with changing GST requirements. So, their 
complaince burden is very high. Similarly, legacy issues under Central Excise are 
also pending. As the country has moved to new taxation regime under GST on the 
principle of One Nation, One Tax. So, some one time settlement scheme for all 
legacy issues including assessments and arrears or production of statutroy forms 
should be framed for issues pertaining to VAT as well as Central Excise. 
One time settlement scheme for all legacy 
issues including assessments and arrears or 
production of statutroy forms should be framed 
for issues pertaining to VAT as well as Central 
Excise. As recovery of all arrears will be under 
GST Act so the the GST Council can frame 
one time settlement scheme for all legacy 
issues. It will be benificial to both Government 
as well as assesees. The assesees and officers 
will be able to concentrate on GST complaince 
issues instead of devoting time to legacy 
issues. It will also generate instant revenue for 
the Government.   
The issue may be considered Policy Issue
9 Rajasthan Laghu Udyog Bharti No Option to have Multiple Trade Name under one PAN:
GST Regime is PAN based and only one registration is allowed under a PAN in a 
State, but in general trade parlance there are many small traders who have more 
than one type of business and making one name for two different types of Goods 
is very difficult and hence Entrepreneur generally have different trade names. 
For e.g. a person has a business of Kirana and other business is of Manufacturing 
Utensils. Now it would be a lost cause to think that there can be a common trade 
name for such business and taking business vertical registration for the same 
would not be a feasible option looking to the increased compliances.
Therefore in cases wherein there are multiple firms of a person in different trade 
names, it becomes impossible to run business.
Facility to have Multiple Trade Names: 
There should be a facility of have multiple 
trade names under same PAN
The GST Council in its 28th meeting held on 21.07.2018 has 
approved the amendment in the law that taxpayers may opt for 
multiple registrations within a State/Union territory in respect 
of multiple places of business located within the same 
State/Union territory. This will be made effective after 
amendment in the GST law.
New Return 
system
10 a. Rajasthan,   b. 
U.P.                c.  
Jharkhand,  d. 
H.P.
a. Mewar Chamber of 
Commerce & Industry;                    
b. Singhbhum Chamber of 
Commerce, Jamshedpur ;               
c. Shri. Subash Mahajan, 
General Sec. Industries, 
Damtal, H.P.                                 
d. Laghu Udyog Bharti                          
e. India Industries Association 
Non – availability of Option to Revise the Returns:
There is no facility to revise the returns, once filed with the portal. 
Further in case of short payment of GST by mistake in a particular month, there is
no facility to revise the return and pay tax for that month. This is because the
system debits the duty in electronic credit ledger as well as electronic cash ledger
automatically at the time of filing GSTR 3B only and not thereafter, which results
in additional interest burden. It is requested that some mechanism may be
developed to debit the duty amount related to the past month even after filing of
GSTR 3B of that particular month.
Provision is available for amendment of return in the
subsequent month.
Provision to make payment even before the due date of filing
the subsequent return is under consideration.
New Return 
system
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
11 a. Chhatisgarh, 
b. Maharashtra, 
c. Rajasthan,   d. 
Punjab ;       e. 
Karnataka;    f.  
H.P.
(a). Chamber of Small 
Industries Association /                 
(b). Urla Industries Association 
/                               (c).Mewar 
Chamber of Commerce and 
Industry /   (d). Rajasthan Steel 
Chamber, Jaipur /                                    
(e). Focal Point Industries 
Association, Patiala /                      
(f). Mandi Gobindgarh 
Induction Furnace Association/                                  
(g). Bangalore Chamber of 
Commerce /                             
(h). BBN Industries 
Association, Baddi (H.P.)
Denial of Credit on default made by the Supplier: In case the supply details
have been declared by the supplier and the supplier fails to pay the tax within the
prescribed time limit, then ITC shall not be recovered from the MSME recipient
and the recovery should primarily be made from the supplier.  
By Law of Justice for Doing Business, the 
person who defaults only should be penalized.
The proposed amendment in returns will take care of the 
problem.                          
New Return 
system
12 a. Chandigarh, b. 
Rajasthan,   c. 
West Bengal, d. 
Jharkhand    e. 
U.P.
(a). Chamber of Chandigarh 
Industries (Regd.) 753, 
Industrial Area Phase II, 
Chandigarh.   ;                                                    
(b). Mewar Chamber of 
Commerce (Rajasthan) ;   (c). 
Industries Association of 
Chandigarh 45, Industrial Area 
Phase II, Chandigarh ; (d). 
Federation of Association of 
Cottage & Small Industries, 
[FACSI];                                     
(e). Singhbhum Chamber of 
commerce, Jharkhand                  
(f). India Industries 
Association, U.P.
No penalties for clerical errors on Invoice/E-way bills There should be no harsh penalties on the 
taxpayer for clerical error on invoice or e-way 
bill where there is no intention of "Evasion of 
tax"
The grievance of the chamber is genuine to the extent that
there should not be any harsh penalty for clerical error on
invoice or e-way bill when there is no intention to evade tax.
The council has already decided that standard operating
procedures will be made to determine the level of penalty to
be imposed in various scenarios. This will ensure that there is
no unnecessary harassment and standard system is followed
across India. The provisions of the UTGST Act, 2017 and
CGST Act 2017 are being followed properly by giving
opportunity of being heard to the taxpayer and in case the
Proper Officer is satisfied that there is only clerical error, no
tax, interest or penalty should be levied and in UT Chandigarh
such observations are being taken care off properly while
deciding the case.                                                                                                                                                              
Circular
13 Chandigarh Laghu Udyog Bharti 
Chandigarh 631, Industrial 
Area Phase II, Chandigarh
For Minor technical fault  For Minor technical fault department should
be lenient and should not take hard step
For minor technical, fault the GST Officers/Officials have
been advised to be lenient and not take a harsh step while
dealing with such cases. Further, council has waived off late
fees wherever required. But, there are provisions in the Law
where discretion is not allowed. A circular may be issued to
clarify the same.
Circular
14 Sikkim Sikkim Chamber of Commerce The internet connectivity is stable in capital town and few district headquarters
only. The small taxpayers are regularly facing problem in accessing the GST
common portal in smaller towns. 
BSNL should take initiative to develop robust
network to provide stable connectivity upto
block level atleast. 
This issue was raised by Sikkim and other North-Eastern 
States in GST Council time and again. The Council had taken 
two meetings with BSNL authorities. However, the decision 
taken in the meetings have not yielded result in ground. 
Administrative 
Action
15 Chandigarh Laghu Udyog Bharti 
Chandigarh 631, Industrial 
Area Phase II, Chandigarh
MSME is facing very big difficulty on mismatch of 3B returns The Laghu Udyog Bharti has requested at least 
one month time should be given between the 
return and the matching of inputs credits and 
the output debits.
Furnishing of return form GSTR-1 may be extended. Notification
16 Nagaland 2. GST registration is done multiple times to execute contract work at different 
States.
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
17 Himachal 
Pradesh
No provision for carry forward of PLA balance in Excise LAW as on 30.06.2017 There may be cases where the balance in PLA 
has not been fully utilised by the assessee as on 
30.06.2017 for which there is no provision in 
the GST laws for carry forward into the GST 
regime. Therefore, It is suggested that a 
remedy for such balance of PLA be provided 
to the assessee, under GST.
Pertains to Central Excise Circular
18 The association requests the kind consideration 
of the GST Council to address our genuine 
problems which we humbly submit as under:
a) The GST Council is kindly requested to 
approve amendment of the GST laws to 
increase the threshold for deduction of tax at 
source.
b) GSTN may be asked to generate a unique ID 
based on PAN (not GSTIN) for all suppliers to 
government departments who claimed that 
their  turnover falls below the threshold based 
on data furnished by the state.
c) The state will obtain a declaration and an 
undertaking from each such supplier that they 
will not charge and collect tax on the invoices 
raised against supplies made and also to 
voluntarily inform the state and obtain GSTIN 
if the turnover exceeded the threshold at any 
time during the financial year.
d) The DDOs may be required by GST Law to 
submit return containing contract details 
including value of contract awarded to each 
such supplier for every contract awarded and 
payment made which will be verified by the 
Central and State tax departments and take 
necessary action whenever the contract value 
awarded to such supplier exceeded the 
threshold in a financial year.
1) The presence of slightly more than  50% taxpayers below 
the threshold turnover in the State GST System who are 
completely illiterate in letters and low/nil computer literacy 
has contributed to low return filing percentage which will 
continue to remain a problem as long as they remain in the 
system
2) The problem highlighted by the All Meghalaya Contractors 
Association and the law committee may perhaps examine the 
same and make appropriate recommendations to the GST 
Council to bring relief to the small suppliers who were 
unwittingly made to take registration despite not liable to do 
so under the Provision of the GST Laws.
3) The CTD, Meghalaya, has in consultation with NIC, 
Meghalaya decided to develop an application outside the 
GSTN system wherein the following will be done to give relief 
to small tax payers :-
a) Obtain a declaration and an undertaking from all suppliers 
of goods or services or both who declare that their turnover is 
not likely to exceed the threshold in the current financial year, 
in case  the turnover exceeded the threshold at at any point in 
time, in the  current financial year, they will apply for GST 
Registration with effect from the date of liability and intimate 
the CTD, Meghalaya accordingly.
b) such suppliers will be given a unique PAN based ID by 
NIC, Meghalaya (outside the GSTN System)
c) A certificate valid for the financial year will be issued to all 
such suppliers to enable them to participate in tenders for 
government supplies without obtaining GST Registration for 
contract values below the threshold for TDS as prescribed 
under Section 51(1) CGST/SGST Act. Such 
d) All DDOs will be made mandatory to submit return 
(outside the GSTN system) for all contracts awarded of value 
under the threshold for TDS, in the system to be developed by 
NIC, Meghalaya. For contract values exceeding the threshold 
for TDS, the successful tenderer shall have to register under 
GST if not already registeredcertificate will also be uploaded 
in the State CTD portal with validity status clearly highlighted. 
The DDOs will be able to view the status of the certificate and 
take action accordingly.
e) The NIC system should be able to throw an alert whenever 
any unique ID allocated exceeded the threshold turnover in a 
financial year, and the certificates of such allottees will be 
immediately highlighted as cancelled.
1) Section 22 (1) of the SGST Act provides for registration of a supplier of goods 
or services or both if the Turnover in a financial year exceeded Rs10 Lakhs
2(a) The TDS provision under Section 51(1) CGST/SGST Acts provided for 
deduction of tax at source on payment made or credited where the total value of 
such supply under a contract exceeds two lakh and fifty thousand rupees
2 (b) The above provision, once implemented will compel all small  suppliers of 
goods or services or both to obtain GST registration even though their turnover in 
a financial year does not exceed the threshold.
3) All works contractors and supplier of goods were asked by the DDOs to obtain 
GST registration at the time of submission of tenders even though their turnover 
in a financial year will not exceed Rs10 Lakhs or in many cases their turnover was 
"Nil"
4) This has led to a situation where suppliers were compelled to take GST 
Registration but appeared as if it was a registration under Section 25(3) 
CGST/SGST
5) Most of these petty tax payers are illiterate and did not file returns in time and 
were saddled with heavy late fee for Nil Returns and late fee and interest for even 
very small turnovers that in a financial year did not exceed Rs10 Lakhs
All Meghalaya Contractors 
Association
Meghalaya Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
19 Maharashtra Bombay Chartered 
Accountants’ Society / 
Mahratta Chamber of 
Commerce Industries & 
Agriculture, Pune
Input Tax Credit should not be denied merely on the grounds of non matching of
credits. [Section 16 (2), read with the Proposed Return Filing Process].
While the concerns of the Government in
insisting on the ITC matching can be
understood, the proposed return filing process
denying provisional credit will hit the SME
Sector very badly since large organisations
may insist on retaining some money from the
vendors till the credits are reflected in their
returns (This can happen after 3 months since
the SME sector will be filing quarterly
returns). This can adversely affect the cash
flow situation of SME Sector.
The proposed amendment in returns will take care of the 
problem. 
Law 
Amendment
20 Maharashtra Chamber of Small Industry 
Associations
Clarifications:   
Valuation: Meaning of ‘additional consideration’ needs to be clarified.
Following issues may kindly be considered:
Whether value of the goods supplied free by the customer is required to be 
included in the value of supply made by the tax payer (for ex. when a 
manufacturer of machines receives certain components from his customer.)
Whether the charges for tools, dies & moulds received free from customer are to 
be amortized to the value of the goods or it is to be assessed to tax separately?
How would the transaction be carried out if the customer is in a foreign country, 
the goods manufactured out of the dies are to be exported, but the dies remain in 
the country? (although the property in the die is transferred to the foreign 
customer).
If the value of goods supplied free by the customer is an additional consideration, 
then whether all the job-workers are required to pay tax on “job-charges + cost of 
the goods received”?
Clarification Required 1. The GST policy wing may deliberate on this issue.
2. Circular has been issued on the same. 
Circular
21 Maharashtra Chamber of Small Industry 
Associations (COSIA)
Works Contract: 
It is required to be clarified as to what is ‘immovable property’
The Works Contract in GST is restricted to contracts of ‘immovable property’. 
However, the history of litigations would show that there is no consensus on the 
question as to what immovable property is.  
There have been cases where a huge tank resting on the ground (without being 
embedded to or attached by even nuts and bolts) has been held to be immovable 
property. On the other hand, machines installed on civil platform with nuts and 
bolts have been held as moveable. 
A clarification would go long way in reducing uncertainty and litigations.
Clarification Sought  GST Policy Wing may clarify the same. Circular
22 Chamber of Small Industry 
Associations (COSIA)
Levy of Tax: Sale of assets on which ITC had not been taken
A company discontinued its operations and sold its assets like computers, 
furniture etc. The company had not taken credit on these goods. Whether GST is 
payable on such sales? 
Clarification Sought No, this is not covered under deemed supply in Schedule – I. Circular
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
23 Chamber of Small Industry 
Associations (COSIA)
Levy: Cash back received from Bank
A tax-payer makes payments (for purchase of goods or services) through credit 
card. Bank gives cash back on the amount spent through credit card. Whether GST 
is applicable on such receipt of Cash back? What is the ‘supply’ made?
Further, in case no tax is payable on such cash back, whether the tax-payer is 
required to reverse the ITC in proportion to the amount of cash back?
Clarification Sought A taxpayer is supplying service to the bank and will be 
required to pay tax @ 18%. 
Circular
24 Chamber of Small Industry 
Associations (COSIA)
Clarification is required as to what is the difference between ‘hire’ and ‘contract 
carriage’? While GST is exempted on non-AC contract carriage, it is not exempted 
on hire.
For example, a company wants to facilitate transport of its employees from their 
area of residence to the factory. The company entered into contract with another 
person who would provide a non - airconditioned bus along with driver. The route 
and the distance is fixed, and the amount payable to the bus contractor is fixed (a 
monthly rent). Is this transaction exempted as ‘contract carriage’ or taxable as 
‘hire’?
Clarification Sought In the given example, it is a case of hire. Circular
25 Chamber of Small Industry 
Associations (COSIA)
Clarification on following questions would help the industry resolve its 
compliance issues.
When a Credit Note is issued for rejection, deficiency, etc. – should the output 
liability be reduced or the ITC be increased in the GSTR-3B?
Should salary, wages be shown in exempted supply in GSTR-3B?
Clarification Sought Output liability of the supplier is to be reduced and output 
liability of the recipient is to be increased against a credit note 
issued by the supplier.
The supply of services is received by the employer against  
salary and wages.
Circular
26 Chamber of Small Industry 
Associations (COSIA)
Exemption from payment of tax on supply of goods by registered person to a 
registered recipient for export under Notn. No. 40/2017-Central Tax (rate) 
dt.23.10.2017 
Under this notification supplier is not eligible for exemption if exporter fails to 
export the goods within ninety days of the (date of issue of tax invoice).  
Why the supplier is penalized for non – export. Onus of liability should be on 
exporters.
Clarification Sought The liability to pay correct tax is on the supplier. The supplier 
may take adequate security or guarantee from the merchant 
exporter, if so required.
Circular
27 Maharashtra Mahratta Chamber of 
Commerce Industries & 
Agriculture, Pune
Dealers are required to give details of total expenditure with bifurcation of 
exempt, composition dealers and others of the expenditure. Many time expenses 
are made through online apps like bhim app, paytm, etc in such cases invoice is 
not generated and there is no trail. This is troublesome for MSME sector who lack 
sufficient manpower to comply. 
 Any return or audit reporting requirement 
should be notified before start of the year, so 
that details can be recorded in accounts and 
reports can be generated through accounting 
software. 
The return committee may deliberate on the same.  New Return 
system
28 Maharashtra (a). Chamber Of Small Industry 
Associations, Thane
E-way Bill: There are a few situations where there is difficulty in preparing the e-
way bill. In such cases, suitable methods need to be devised.                         (a)   
How to fill in the Part B when the goods are taken by bus, local train etc? In fact, 
by the time a person will note the bus number, he will miss it. Similarly, when one 
travels through local train or carries the goods as personal luggage in express 
trains, he does not have a railway receipt (portal requires him to fill in the Railway 
Receipt No.).
Suggestion: In such cases, the trade may be 
allowed to merely mention ‘bus’, auto-
rickshaw, local train, train etc. without any 
requirement of mentioning the vehicle number 
or the railway receipt number.
NIC may provide a solution to the concerned issue.                                                                                                                                                                                                                                             Circular
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
29 Maharashtra Bombay Chartered 
Accountants’ Society
Clarification that the provisions of job work are optional
[2(68), 19 & 143]
Under the Excise Regime, the taxable event 
was manufacture. Further, input credit was 
allowed only on inputs received in the factory. 
Therefore, the job work provisions were 
relevant and facilitated transactions and also 
provided documentary control. 
Under the GST Regime which is transaction 
based and credits are freely available, these 
provisions do not really seem relevant and 
create confusion. Further, the definition of job 
work and the prescribed procedures result in 
these provisions restricting transactions rather 
than facilitating them. 
It may therefore be clarified that the said 
provisions are optional in nature.
The GST policy wing may deliberate on this issue.  Circular
30 Mizoram Mizoram Merchants 
Association (MIMA)
Taxpayers outside the state are unwilling to provide B2B invoices. Monitoring and checking system is required so 
that compliance for providing invoices and 
utilisation of E-waybill will be high. 
As suggested by the trade association, a thorough monitoring 
system is required for checking of invoice and e-way bill. 
Administrative 
Action
31 Himachal 
Pradesh
Himachal drug Manufacturers  
Association
2) Refunds in case of inverted duty Structures- Inputs Taxable at same/lower 
rates. 
GST Law provides for refund of Input Tax paid to assessee covered under 
Inverted Duty Structure i.e. for the assesses where Output Product is taxable at 
higher rate than the Input, in such a case the assesses shall not be liable to pay 
Outward GST at any stage. However while processing GST refund claims 
Assessing Officer is not approving refunds for the Inputs which are chargeable to 
same or Lower rate of GST as chargeable on the Final Product. As a result of this 
a substantial part of GST input is not processed as Refund and also has no hope of 
adjustment in output liability in future either.
State: The representation of the issue appears to be 
misspelled. However Council may consider to revisit the GST 
tariffs on inputs to avoid the situations of inverted duty 
structure. 
Circular
32 Himachal 
Pradesh
Provisions relating to claim of Input Tax Credit and reversal of ITC in certain 
situations in the hands of Real Estate developers/builders  
It is suggested that a clarification be issued by 
way of a circular addressing the various issues 
relating to claiming of ITC, restriction of ITC 
and reversal of ITC in the hands of the builder 
/ developer under various circumstances. This 
would address the concerns of the community 
at large and prevent avoidable litigation at a 
future date.
May consider issuing clarification. Circular
33 Rajasthan, Tamil 
Nadu
Tiruppur Exporters 
Association, 
Mewar Chamber of Commerce 
& Industry
SUBMISSION OF CA CERTIFICATE IN LIEU OF PHOTOCOPIES OF
PURCHASE INVOICES:
It has been represented that while submitting refund application manually, the
exporters have to attach the photocopies of purchase invoices, which is so
voluminous and increase the transaction cost. 
Instead of this, it is suggested for furnishing
abstract in lieu of ITC invoices duly certified
by the Chartered Accountant along with the
undertaking / indemnity bond to repay
erroneous refund, if any, immediately on
deduction.
GST Policy  Wing may deliberate this issue. Circular
34 Himachal 
Pradesh
GST Compensation Rules to be prescribed. It  is  suggested  that appropriate  GST 
Compensation Rules be prescribed in relation 
to charge of compensation cess and manner of 
availment of credit of Compensation Cess. 
Such rules already exists. Circular
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
35 West Bengal, 
Tripura
Bharat Chamber of Commerce Daily Sales Outstanding (i.e. number of days that it takes to collect payments) for 
small enterprises was around 70 days in 2017, as against 58 days for large 
enterprises. MSMEs typically have a high dependency on trade receivables, 
depending upon how a particular segment operates. Mostly the payments of wages 
in this sector are done on a daily, weekly or monthly basis. Hence, high DSO 
directly affects the working capital of most firms in the sector. The trade 
receivables scenario for micro and small companies has deteriorated, following 
demonetization and GST. For micro and small companies, around 70% of trade 
receivables were open for more than 90 days during Q1 2018 as compared to just 
45% during 2015. Since finance from banks is also not easily available it has made 
the sector highly uncompetitive vis a vis the bigger players.
Bank credit availability is an issue being faced by msme .  Department of 
Financial 
Services
36 Himachal 
Pradesh
Baddi Barotiwala Nalagarh 
Industries association
2) Classification  Issue The classification of IGST/CGST/SGST be 
made one and Govt.  Software should be able 
to bifurcate revenues on the basis of state code 
of sates in GST numbers.
As the payments in respective heads are credited to distinct 
Government kitties, suggestion appears impractical. However 
GSTN may look in to suggestion and possible applicability.
Accounting 
issues- Pr. CCA 
to consider
37 Telangana a. Tirupur Exporters 
Association,                                 
b.  CII, Telangana
GST Refund Claims for Multiple Months:
There was an issue where an exporter purchases goods in one particular month
while the export is made in the subsequent month and the formula as available in
the website doesn’t permit the exporter to claim previous month’s ITC against
subsequent month’s export.
This issue was pointed out to the Government and subsequently Circular No.
37/11/2018-GST dated 15.03.2018 was issued whereby under Para 11 it was
allowed to make refund claims for two or three months clubbed together. Though
this has resolved legal infirmity in claiming refunds in respect of such cases, this
circular has not been so far given effect to in the website for electronic filing
where refund forms in RFD-01A is made available only on a monthly basis
without any option for clubbing the months.
It has been requested that this technical defect
may kindly be brought to the knowledge of
GSTN and suitable corrections in the software
may be carried out at the earliest.
It is informed by GSTN from last three months that it will be
lept in place shortly. GSTN may directed to make the tool
available at the earliest.
GSTN
38 Maharashtra, 
Rajasthan
Chamber of Small Industry 
Associations, 
Mewar Chamber of Commerce 
& Industry
Portal related Issues
(i). While filing refund of ITC on the portal, the period available for selection is
only month-wise. Though it was agreed in the Council meeting that a larger period
would be provided for, it is not done so. Filing of quarterly refund not available at
the GSTN portal.
(ii). After filing of GSTR-1 return, full download of the same is not available.
Only summary made available. There is no way to check the details. Where there
are hundreds of invoices, there is no way to verify them. Download of the same
nor its summary is available. There is no way to check the returns.
(iii). The GST portal does not allow part payment of liability. Thus, even when
ITC is available, the tax payer is not able to set it off against his liability. Where a
person is not able to pay the cash component immediately, set off of the entire
liability is delayed. Whether in case of such circumstances, the interest would be
payable even on the ITC that was available in the account? 
It is suggested that download of the entire data
as a single excel file (with invoice wise details)
should be available.
After filing of ITC-04 statement, neither
download of the same nor its summary is
available. There is no way to check the returns.
i. This facility is under development independently by GSTN.
ii.& iii. The suggestion merits consideration by GSTN.
GSTN
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
39 Maharashtra Vidarbha Industries
Association
1. Refund of amount paid for Goods which was purchased in the month of January 
and Exported in the month of February - as the RFD -01A is not as per Circular 
37/11/2018-GST Dt. 15th March 2018 , the system ask for the month and not the 
period for which the RFD-01A is being made.
2. The Manual for Refund of ITC on Account of Exports Without payment of Tax 
which is available on the GST Website does not reconsile with the actual RFD-
01A retune filing system. We highlight the following discrepancies which are as 
under :                                                                   As per the manual – the 
Applicant has to mention at the end of the Refund Application (1) Financial Year 
(2) From Month (3) To Month , whereas in the GST website when the Applicant 
applies for Refund (1) From Month (2) To Month these are missing.                                                
Solution may be provided for the same.  1. The 
facility would be provided by GSTN very soon.     2. GSTN to 
deliberate on this issue. 
GSTN
40 Maharashtra Chamber Of Small Industry 
Associations, Thane
The GST portal does not allow part payment of liability. Thus, even when ITC is
available, the tax payer is not able to set it off against his liability. Where a person
is not able to pay the cash component immediately, set off of the entire liability is
delayed.
Whether such circumstances, the interest
would be payable even on the ITC that was
available in the account?  
Unless and until the cash ledger or as the case may be credit 
ledger is debitted, the liability is not disposed off, hence 
merely keeping the balances in cash or credit ledger will not 
be treated as payment of taxes and the interest is calculated on 
actual payment. 
GSTN
41 Maharashtra Vidarbha Industries 
Association
Avoiding direct interaction between registered persons with GST Authorities:
All refunds to be made automatic based on the returns filed on a periodic basis
without the need of any personal submission of details / documents. Option may
be given for uploading required annexure along with refund application so that
physical documents need not be required to physically submitted.
Solution may be provided for the same.  GSTN to expedite complete development of refund module.  GSTN
42 Maharashtra STP Association B-B, B-C rectification should be provided for mistakes regarding incorrect TIN. Solution may be provided for the same.  GSTN to deliberate on the same.  GSTN
43 Maharashtra, HP STP Association, Baddi 
Barotiwala Nalagarh Industries 
association, HP
Changing the Quarterly/ Monthly selection to be changed- opportunity to be
provided to change the periodicity if there is mistake.
Solution may be provided for the same.  GSTN to deliberate on the same.  Policy Issue
44 Sikkim Pharmaceutical manufacturuing 
companies of Sikkim
No grievances Regular intervention by tax authorities/GSTN 
in form of SMS alert prior to last date of filing 
return and payment of tax will help in pushing 
tax compliance up in priority list of small 
taxpayers.
SMS alert system Sikkim CTD had during online VAT regime 
was an effective tool to reinforce the awareness. It sub-
consciously generates one-to-one communication line with the 
taxpayers. Whereas email cannot give same result. GSTN may 
develop SMS alret system to the registered mobile number of 
the promoter or authorized signatory.
GSTN
45 Karnataka, HP Peenya Industries Association, 
Dongara Enterprises Chougan 
Bazar Nurpur
Deregistration Deregistered taxpayers are unable to file the 
GST returns or make the payment of tax by 
virtue of deregistration. So revocation of 
deregistration is required with immediate 
effect.
Deregistered persons are not able to file the returns and make 
payments for the period of validity of registration. This needs 
to be set right. The issue can be discussed in the IT 
Committee.
GSTN
46 Maharashtra Vidarbha Industries 
Association
Few more issues we would like to bring to your notice that, where there is error in 
filing of sales information in Form 3B, which later on correction while filing of 
GSTR 1, then the information of GSRT 1 should be considered as final. Else 
correction of Form 3B facility should be made available at GSTN. Also in many 
cases it is observed that refunds are held when there is non material discrepancy, 
i.e. less than 3% of the refund amount, in the ITC claimed then balance refund 
should be issued withholding double of the ITC amount.
We request that this condition may be withdrawn with immediate effect.
Solution may be provided for the same.  GSTN to provide solution.  GSTN
47 Bihar BIA Taxpayers are facing difficulty in downloading GSTR-2A. Facility should be provided. May be considered. GSTN
48 Bihar BIA Mistakes in exercising option for monthly/quarterly return should be allowed to be 
corrected.
Option exercised for selecting 
monthly/quarterly filing of return may be 
allowed to be changed where the taxpayer has 
not actually exercised this option.
May be considered. GSTN
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
49 Bihar BIA Taxpayers are facing difficulty in downloading invoices in a desired sequence 
while downloading GSTR-2A 
Different kinds of filters should be provided 
for downloading invoices and taxpayers may 
be enabled to search invoices as per different 
categories.
May be considered. GSTN
50 Rajasthan Sumit Jagetia, Bhilwara MSME-IT issues-Registration Few GSTINs have been made inactive with 
effect from 2/4/2018. Taxpayers are able to 
login but status is shown as INACTIVE. In 
such cases taxpayers were issued notices from 
jurisdictional officers and since the taxpayers 
didn’t file clarifications within the specified 
period of time, GSTINs were made inactive. 
Such taxpayers didn't apply for revocation as 
well within 1 month of being inactive. How can 
such cases be restored?
Such cases have been escalated in the IT committee meeting 
(GSTN). 
GSTN
51 Rajasthan Sumit Jagetia, Bhilwara MSME-IT issues-Refunds There is no provision on portal for quaterly/FY 
refunds. Clubbing of refund data is not 
supported on the refund module of GST 
Common portal. This happens usually in cases 
of Inverted Duty Structure and where exports 
are done in a particular month but in other 
months there is only pruchase and no sales.
Vide Circular No. Circular No. 37/11/2018-GST, clarification 
regarding refund claims have been provided. It has been 
clarified that the exporter, at his option, may file refund claim 
for one calendar month / quarter or by clubbing successive 
calendar months / quarters. The calendar month(s) / quarter(s) 
for which refund claim has been filed, however, cannot spread 
across different financial years.
The system for filing of refund application does not allow to 
file refund application by clubbing successive periods. Thus, it 
is requested to provide the functionality according to the 
clarification without any further delay.
GSTN
52 Karnataka Bangalore Chamber of Industry 
and Commerce
While the GST law allows filing of quarterly refund applications, the portal has 
not enabled the same
Should be enabled at the earliest This is IT Issue – may be brought to the notice of GSTN GSTN
53 Tamil Nadu 1. Tamilnadu Small & Tiny 
Industries Association 
2.Tamil Nadu Vanigar 
Sangangalin Peramaipu 
System 1. The e-payment of tax, other mode of 
payment using debit/card should also be 
considered. 2. Payments shall be accepted by 
all banks. 
 To be highlighted to GSTN GSTN
54 Tamil Nadu Villipuram District Small and 
Tiny Industries Association
System 1. Non-filing of GST return is due to lesser 
GST awarness and software issues. Hence, the 
time should be extended.
   
2. The revised return option should be given 
for filing GSTR-1 & GSTR- 3B due to 
inadvernent mistakes in the return filed. 
3. Toll free number is given for GST 
Grievances, while contacting the toll free 
number it should be in Tamil Language.
4. GST Amendments could be seen in Central 
Excise Duty portal. The same should be made 
avaliable in GST portal.
5. Annual Returns has to be filed , but there is 
no details avaliable in the portal. Hence, the 
same should be  made avalible in the portal and 
extend the time limit for filing the Annual 
Returns. 
 To be highlighted to GSTN.  GSTN
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
1. Currently GSTN accepts only files upto the size 5 MB. If 
the file size exceeds 5 MB Facility has been provided to 
upload the  Additional JSON file, based on the size.    
3.  To be highlighted to GSTN.
GSTN1. GST portal should be made compatible to 
accept JSON file exceeding 5MB for 
rectification if wrong invoices exceeds size of 
5MB.  
2. Requested to waive late fees for the days 
when the portal is facing technical glitches. 
3. Table 3.1 Tax on outward and reverse 
charge) of GSTR 3B should be attuned to 
accept negative figures also. 
4  Matching of ITC with GSTR 3B and GSTR 
2A should be relaxed for certain period 
considering the practical difficulties being 
faced. 
5. Issuing of notices for mismatch between 
GSTR 1 and GSTR 3B should be relaxed since 
the same are rectified in subsequent months.
6. If there is any mismatch during return filing, 
it should be viewable under dealer login also 
and not only under officials login view. MSME 
units will be able to rectify if such mistakes are 
noted
7. For submitting GST Tran 1 again some more 
time may be allowed for those who have not 
filed because of the portal problem which have 
not accepted the same or not possible to submit 
revised returns. 
System1.The Tamilnadu Automobile 
& Allied Industries Federation     
2. Tamil Nadu Vanigar 
Sangangalin Peramaipu
3.Cuddalore District MSME 
Association
Tamil Nadu55
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
56 Tamil Nadu Tamil Nadu Vanigar 
Sangangalin Peramaipu
System 1. While applying for registration of 
Branch/Godown, the portal didn’t ask any 
document to upload like rental agreement etc. 
The same time, officials sending a clarification 
note to the dealer to upload  the rental 
agreement.  This causing unnecessary time 
delay to every applicant. The portal should be 
modified to upload in the initial stage of filling 
the branch applications to upload rental 
agreement in case of Branch/Godown.
2.Subsequently cancelled dealer’s previous 
period returns could not be uploaded at 
present. Requesting to provide the facility for 
filing the returns for period prior to 
cancellation. 
3.Single cash ledger must be introduced. There 
are 4 major heads (CGST, IGST, CESS & 
SGST) and 5 minor heads (Tax, Interest, Fees, 
Penalty & others).  We request to introduce 
only 4 major cash ledgers instead of present 20 
coloumns.
1. To be highlighted to GSTN. Facility to be provided to 
upload the rental agreement at the time of application for 
Amendment.
2.To be highlighted to GSTN. 
3.To be highlighted to GSTN. 
GSTN
57 Uttrakhand Uttarakhand Industrial Welfare 
Association
2.      For GST online payment, option of only 14 banks is available on the GSTN 
portal. 
Option of all Banks must be available. Option of all the banks, Credit/Debit Cards, payment wallets, 
BHIM UPI, etc. should be available for payment of GST on 
GST portal.
Policy Issue
58 Uttrakhand Confederation of Indian 
Industry (CII)
3.INADEQUATE IT INFRASTRUCTURE
The IT infrastructure that supports GST is inadequate. The tax payers start 
experiencing difficulty in logging in weeks before the due dates. The log in is not 
seamless and one has to make multiple attempts to log in. Even for the payment of 
tax one has to log in. This perhaps makes the server very busy.
In other tax payments like income tax, the online payment of tax is independent of 
the income tax portal. It is handled by NSDL and collecting banks generate a 
unique code for every collection made by them. The unique code is mentioned in 
the return for claiming the credit for tax paid
It is suggested that the tax collection under 
GST should also be through independent 
agency with facility to bulk post the challans at 
the time of filing of return. This will reduce the 
load on the GST server also.
May be considered GSTN
59 Bihar BIA Where a taxpayer has been granted registration on a date later than the date of
liability then such taxpayer is not able to discharge his liability with effect from
the effective date of registration 
Portal services should be provided with effect
from the effective date of registration.
May be considered. Policy Issue
60 Assam, NER Federation of Indian Exporter 
Organisations (Eastern 
Region),
Refund issue: Application for refund was filed for Rs X, but refund was made for 
Rs Y only (Y< X) based to GSTR 2A data. Balance ITC has been re-credited. 
Subsequently, the supplier has shown the supplies in GSTR 1 as a result of which 
my GSTR 2A has gone up and matches with the actual refund that was claimed 
i.e. Rs X. But, now I cannot file another application of refund for the same period 
nor I can include it with other period(s).
Supplementary refund applications have to be 
allowed.
 The re-credited amount may be allowed to be claimed 
through supplementary refund application for the same period 
or refund may be allowed to be claimed with subsequent 
period as a separate entry.
Policy Issue
61 Assam, NER Federation of Indian Exporter
Organisations (Eastern
Region),
GST refund is not very smooth. From the electronic model that we had in WB we
have been forced to adhere to semi automatic module. We are being asked to
furnish all export invoices at the time of provisional refund, which is totally un-
called for. Delayed refunds and a spike in capital requirements have only added to
our woes.
Online refund should be available. Lack of comprehensive online refund module is a stumbling
block both for seeking as well as disbursing refund.
GSTN
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
62 Karnatak Karnatak
Chamber of
Commerce & Industry,
Hubballi
1.Provision be made for submitting Revised Return in a simple way
2. Submission of single Return
system be implemented
3. Provision for downloading
Monthly/Quarterly details in Excel Format.
4. Improvement in software
systems( to speed up the server)
For all these reasons the one solution is to 
improve upon the software by speeding up the 
server
The returns are already proposed to be simplified. 
Further, this is an IT issue and the same may be brought to the 
notice of GSTN and discussed in the IT Committee.
New Return 
system
63 Odisha 1. Utkal Chamber of 
Commerce & Industry, 
Bhubaneswar(UCCI) 
2. Odisha Small Scale 
Industries association(OSSIA)
3. Odisha Assembly of Small 
and Medium Enterprise 
Association(OASMEA)
4. Odisha Young Entrepreneurs 
Association(OYEA)
5. North Odisha Chamber of 
Commerce & 
Industry(NOCCI), Balasore
Facility to capture UAM (Udyog Adhar Memorandum) number and 
IEM(Industrial Entrepreneur Memorandum) number  in the GST Registration 
GST registration should capture the UAM No. 
to identify MSME units.
May be considered to monitor the compliance behaviour and 
functioning of MSMEs. It will also help in statistical analysis 
pertaining to MSME Sector.
Policy Issue
64 Himachal 
Pradesh
HAROLI BLOCK 
INDUSTRIAL ASSOCIATION
2)      Uncertainty related to functionality of the GST information technology 
system.
Information technology department of GST 
regime should speeden up the uploading 
process, to avoid time wastage.
GSTN to look in to grievance. GSTN
65 Himachal 
Pradesh
 Verification of application and approval of registration   If there is a validation error, the reason for the 
error is not provided through an email sent to 
the authorized signatory, and appears much 
later on the portal. In this regard, It is 
suggested that the reason for validation error 
be communicated to the applicant through 
email, sms, etc. so that he can take immediate 
corrective action by providing the correct 
particulars. 
GSTN should take the issue to ensure that validation error, if 
any, is displayed to applicant at the time of filing application.
GSTN
66 Himachal 
Pradesh , 
Uttrakhand
Uttrakhand Industrial 
Association 
Option of having multiple Trade Names with single GSTIN  It is suggested that the option of having 
multiple trade names against one GSTIN be 
provided to all registered persons, regardless of 
the constitution of business, to facilitate ease 
of doing business. 
Different branches with different trade name may be allowed 
under one GSTIN. However it cannot be regardless of 
constitution of business. The constitution of business must 
specify such trade names within it.
Policy Issue
67 Himachal 
Pradesh
Size of Documents to be uploaded while undertaking registration  It is suggested that the size limit of the 
uploaded files be increased so as to maintain 
the quality and readability of the documents 
uploaded in the GST online portal. 
GSTN may consider  GSTN
68 Himachal 
Pradesh
 Online GST Portal-password for login     It is suggested that the copy-paste options be 
enabled in passwords, and the requirement to 
change password beyond a specified time be 
done away with. 
In our view, this requirement is for security reasons. No 
reasons for suggestion are given. Not recommended.
GSTN
69 Himachal 
Pradesh
Non-availability of filing of GST Return without payment of Tax  It is suggested to permit filing of return 
without payment of tax before the 20th of the 
succeeding month and enable tax payments till 
last date i.e. 20th, which will be credited 
automatically in the ledger. 
State: Not recommended GSTN
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
70 Himachal 
Pradesh
Non-availability of refund  to exporters due to technical glitches  Although there are several circulars issued for 
speeding up of the refund process the ground 
reality is that trade and industry have not been 
in a position to obtain refunds. Therefore, It is 
suggested that some kind of accountability on 
the part of Officers be introduced to alleviate 
the difficulties faced by trade and industry. 
Interest for delayed refunds are there. Accountability will 
automatically arise once it is found that interest arisen due to 
his inactions.
GSTN
71 Himachal 
Pradesh
Online utility is not available for filing composition returns and the offline process 
results in delay. 
Online filing should be enable Composition taxpayers are small in size and hence offline tool 
was devised for them so that they can prepare their return on 
their own computer, re-check and then upload the same. This 
was also done to reduce the chances of error as he can 
check/re-check the data and calculations. However GST 
Council may consider.
GSTN
72 Rajasthan CII(Cofederation of Indian 
Industry)
Dealer’s having to charge SGST, CGST and IGST leads to confusion, errors, 
return filing complications and even instances of losing on input credit.
Dealers should be required to charge tax under 
a single head of GST and the GSTN software 
should have the necessary algorithm to 
segregate it into SGST, CGST and IGST as 
appropriate. This will greatly simplify return 
filing for MSMEs and big dealers also.
As SGST, CGST and IGST are three different laws and 
revenue is sharing among the State and Center as per revenue 
received in compliance of these law. The input credit between 
SGST and CGST is not adjustable as per section 49(5). This 
issue may be discussed by the Law Committee if a mechanism 
can be found to facilitate traders.
Policy Issue
73 Rajasthan CII(Cofederation of Indian 
Industry),  Laghu Udyog 
Bharti,
Refunds process needs to be made simpler, painless and automatic- it was much 
easier for exporters to get refunds under the earlier excise regime than it is under 
GST.
It should be an automatic and seamless process 
similar to how Income Tax refunds are 
processed without dealer requiring to submit 
detailed paperwork and refunds disallowed 
under minor technical pretext.
Manual processing of refund applications are being done till 
the online functionality to process refund claims is made 
available by the GSTN. Commercial Tax Department has 
issued instructions to field authorities to expedite all pending 
issues related to refund claims within the prescribed time 
limit. It is suggested that the process of refund under GST 
may be made more smooth by making online functionality 
operational. Therefore, the online functionality should be 
made available without any delay.
GSTN
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
75 a. Karnataka      
b. H.P.              
c. Tamil Nadu  
d. Rajasthan    e. 
U.P. 
Peenya Industries Association / 
Mehatpur Industrial 
Association / Tamil Nadu 
Automobile & Allied Ind. 
Federation / Laghu Bharti 
Udyog, Rajasthan
TRANS-1 Keep open the uploading of Trans-1 without
setting up of any deadline
This is a transition issue and needs discussion. It cannot be 
open-ended provision. Further, the deadline was already 
extended on one occasion.
Policy Issue
76 Karnataka Peenya Industries Association Payment of Tax on behalf of Vendor The taxpayers should be allowed to tax w.r.t. 
the purchase invoice on behalf of vendor (who 
fails to file the tax return or not). This helps 
the tax payers to maintain clean chit.
This is not in the framework of GST as this may lead to others 
also demanding the same. Needs further discussion.
Policy Issue
77 Himachal 
Pradesh
Shri Subhas Mahajan, General 
Secretary Industries Damtal
MSMEs have to file two returns monthly GSTR 3B and GSTR 1 and are facing 
difficulty in filing the two returns
MSMEs are required to file monthly returns whereas in VAT regime quarterly 
returns were being filed
MSMEs are required to file 3B returns up to 20th of each month and GSTR 1 up 
to 10th of each month & which has burdened them
There should be only one return for the 
MSMEs
MSMEs should be allowed to file monthly or 
quarterly returns as they may like to file
MSMEs should be allowed to file one return 
within the period of 30 days of the close of 
month or quarter as the case may be.
Ideally easy return should be for all not for MSMEs only. 
System of 1 return is already under consideration of Council 
and may be rolled in near future.
A system and calendar has to be followed for compliances. 
Compliances calendar cannot be left on the will/wish of the 
persons to comply. 
One return is on its way. May be provided shortly. Taxpayers 
with turnover up to 5 Crores would be required to file 
quarterly returns. Others would be required to file monthly 
return.
New Return 
system
74 Various offline tools  for submission of different returns , 
form ITC-01/03/04 and GST Tran-1 & Tran-2 have been 
already made available by the GSTN on the common portal. 
Besides this , a taxpayer may submit returns by using online 
mechanism available on the common portal. A functionality is 
also proposed to be made available to use the E-Way bill data 
for submission of  GSTR1.Moreover, GSPs are also 
facilitating the services on the GST Common Portal. It is 
suggested that  other facilitation majors may also be explored 
to be provided.
GSTNRajasthan All the businesses are using some or the other 
software for preparation of invoice and 
submitting GST returns. Businesses also have 
to prepare E-Way Bill on GST’s portal subject 
to certain conditions. If any business is 
preparing E-Way Bill for all his sales, in effect 
he is completing his GSTR-1. Such person 
should not be required to file GSTR-1 as all 
such details have already been furnished. 
Similarly, Government should launch an 
Offline / Online Tool / Software / Platform 
which all taxpayers may download on their 
computer / laptop / tablet / mobile and record 
their purchases, sales, freight, inputs, business 
expenses, capital goods, or anything related 
with GST. Taxpayers may upload their data on 
live / daily / monthly / quarterly basis 
depending upon their Turnover; Quarterly for 
TO < 5 crore /annum, Monthly for TO > 5 
crore / annum; Tax may be payable on monthly 
basis. This would reduce last minute load on 
the website. 
Furthermore, by using such software, E-Way 
Bill would not be required. Government’s 
software should calculate GST payable which 
the taxpayers shall pay in stipulated time. This 
would also lead to saving of precious national 
time & cost of all business persons 
unnecessarily being wasted in filing of returns. 
Accounting / Invoicing Tool, Software, PlatformSumit Jagetia, Bhilwara
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
78 a. Rajasthan,   b. 
West Bengal, c. 
Uttrakhand
(a). Mewar Chamber of 
Commerce & Industry, (b). 
Federation of Chambers of 
Commerce & Industry, 
(FOCIN), North Bengal, 
Industries Association of 
Uttrakhand
To Exempt for filing the ITC – 04 in case of job – work – Procedural problem in 
complying with the job – work provisions of GST:
It has been represented that GST – ITC – 04, required to submitted quarterly basis 
has created issues for MSMEs who regularly send their items to many job – 
workers particularly in textile sector. It is very difficult to maintain one to one 
correlation between the goods sends and received from the job – workers. 
It has been requested to exempt textile industry 
from filing ITC – 04. 
May be considered Notification
79 ASSOCHAM/ BDO/ EPCES To extend Threshold limit of Rs 20 Lacs for inter- State supply of goods as well.
Further, to extend threshold limit to E - Commerce operators as well. 
The threshold limit of ₹20 Lacs, presently
applicable for inter-State supply of services
may be extended to inter-State supply of goods
also. This will also facilitate SEZ units/ SEZ
developers within the same State.
Further, for supply of goods for sale through E
– Commerce operators, the exemption limit of
₹ 20 Lacs may be permitted.
Centre: Merits consideration atleast for supplies to SEZs
located within the same State and inter-State B2C supplies.
The small supplier below threshold limit are required to
compulsorily register, if they are supplying through E -
commerce operator required to collect Tax at source. The
request merits consideration.
Law 
Amendment
80 a. Chandigarh,  
b. Manipur,      
c. Himachal 
Pradesh,                  
d. Tamil Nadu, 
e. Telangana,   f. 
Rajasthan,   g. 
Uttrakhand, h. 
M.P.              i. 
Punjab           j. 
Bihar 
Chamber of Chandigarh 
Industries (Regd.) 753, 
Industrial Area Phase II, 
Chandigarh, Manipur Industry 
Development Council (MIDC) 
/ Bhiwadi Manufacturers 
Association / Tamil Nadu - 
Small & tiny Industries 
Association /Small Engineering 
Industries Welfare Association 
/ Villupuram District Tiny and 
Small Industires Association. / 
Tamil Nadu Association of 
Cottage and Tiny 
Entrepreneurs / Commercial 
Tax Practioners' Association, 
Indore /  Tax Law Bar 
Association, Bhopal / 
Industries Association of 
Uttrakhand / Confederation of 
all India Small & Medium 
Pesticide Manufacturing 
Association / MSME & SME 
Sector, Punjab / BIA
Late Fee for filing of Returns Waiver of late fee for MSME sector for three 
(03) months of delay from the due date of 
filing of returns and further reduction in the 
Interest rates (say by 3%) in case of default by 
the MSME taxpayers.
 
The GST Council has already reduced the fee for non-filing of 
NIL return to Rs. 10/- per day each under UTGST Act, 2017 
and CGST Act, 2017 which is very nominal and is must to 
ensure compliance from non-filers of nil returns. 
Notification
81 Jharkhand, 
Uttrakhand
Jharkhand Small Industries 
Association, Ranchi, 
Jharkhand;                      
Advisory Group, Indian 
Industries Association, 
Uttrakhand
Tax on Advances creates financial & compliance burden whereas most of the 
Advances get adjusted within reasonable time 
No tax on Advances if the advances are 
adjusted by way of issues of invoice within 
three (03) months.
Notification
82 Rajasthan Chamber of Small Industries 
Association , Rajasthan BSNL 
Franchisee Association, Laghu 
Udyog Bharti, Rajasthan
Exemption for Services by a Retailers of SIM Card and Recharge Coupon
(Physical or E-form) in Telecom Sector
Exemption for Services by a Retailers of SIM 
Card and Recharge Coupon (Physical or E-
form) in Telecom Sector. The turnover of such 
SIM card retailer should not be included in the 
aggregate turnover of ₹ 20 Lakhs.
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
83 Maharashtra, 
Rajasthan
Bombay Chartered 
Accountants’ Society, Laghu 
Udyog Bharti
Reverse Charge Mechanism in case of notified goods and services. [Section 9 (3)
read with 24 (iii)]. 
The intention of reverse charge mechanism is to shift the compliance burden from
unorganised sector to the organised sector. However, in view of Section 24 (iii),
what happens is practically the opposite. A very small trader having turnover of
outward supplies of Rs. 10 lakhs is also required to register if he pays transport
charges of Rs. 5000/-.
Therefore, it is suggested that either Section 24
(iii) be deleted in toto (thereby triggering a
registration requirement only in case of
exceeding of aggregate turnover of outward
supplies) or an alternative threshold of Rs.
5,00,000/- be provided and only if the value of
inward supplies on which reverse charge is
applicable exceeds this limit, Section 24 (iii)
should become operational.
The prescription of twin tests for registration
will result in significant reduction in
compliance burden and will also open up the
SME Sector to undertake one-off supplies in
other States, which business opportunities are
foregone today by them due to multiple
registration requirements.
The issue remains for RCM on Advocate service and GTA
services, GST policy wing may deliberate on the same. Issue
related to GTA needs serious thoughts. 
Notification
84 Confederation of Indian 
Industries (CII)
Refund of accumulated ITC due to inverted duty structure on railway parts:
Several foundries are manufacturing the castings & other parts for Railways,
which is one of the major consumer of cast components & contributing in “Make
in India” Campaign. 
However, in the GST regime there is serious issue of accumulation of Input Tax
Credit (ITC) to such units as the GST rates on inputs are higher at 18%, whereas
the final product manufactured & supplied to Railways by foundries are taxed at
5% under the GST regime, resulting of inverted duty structure & unutilized
accumulated ITC. 
Although there are provisions of refund of accumulated ITC due to inverted tax
structure, however, this provision is not available to the foundries producing
castings & components for Railways as an impact of notification 5/2017 of
Central tax as no Refund of unutilized input tax credit in case of inverted duty
structure in few items including Chapter 86 is allowed to Wagon parts which fall
under 8607 (Bogies, Couplers etc. assembled from steel casting).  
Recently Ministry of Finance has vide Circular 30/4/2018-GST dt 25-1-2018 (File
Ref 354/2018-TRU) clarified that all goods will attract general applicable GST
rates to such goods even if supplied to Railways Except Chapter 86, will be taxed
at 5% with no refund of unutilized input Tax credit
Refund of accumulated ITC be granted for
supply of railway parts covered under HSN
8607.
Alternatively, GST rate on locomotives and
parts for supply to Railways under 8607 may
be rationalized/ revised to 12% from 5% at
present with provision to allow Input Tax
credit. 
Centre: May be considered. 
Blocking the refund of accumulated credit on account of
inverted duty structure adversely affect the small standalone
units having no other output supplies as they are not in a
position to recover it from their customers as output tax and it
adds to the cost of the product whereas the bigger units having
multiple outward supplies can use the accumulated credit for
payment of tax liability on other output supplies. It also leads
to accounting problems with income tax as to whether this
accumulated credit should be classified as cost or current
assets. 
Either the refund may be allowed or the rate on output supply
may be increased to 12%. 
Notification
85 a. Bihar,             
b. Uttrakhand,  c 
.Telangana
(a). Confederation of Indian 
Industries (CII), New Delhi ; 
(b). All India Small Scale Ice 
Cream Manufacturers, Bihar, 
(c). Indian Industries 
Associatiojn, Uttrakhand; (d). 
Ice Cream Manufacturers, 
Telangana
Benefits of composition scheme under Small Scale Industries (SSI units) to be
extended to ICE Cream manufacturers
Under the present GST system, SSI units manufacturing ice creams cannot avail
the benefit of Tax Composition Scheme which is available to nearly all small scale
industrial units (except for those manufacturing tobacco and pan masala). Under
the GST composition scheme a small industrial unit pays only 1% GST having
yearly turnover of 1 crores or less. Under composition scheme they required to file
simpler quarterly tax returns etc thus making tax compliance easier for small units. 
Exclusion of small ice cream manufacturing units from the GST Composition
Scheme has resulted in great hardships and hence they should be included in the
Tax Composition Scheme.
Composition Scheme to be extended to Ice
Cream Manufacturers
May not be considered since the value addition in ice-cream is
very high and the major inputs are virtually free of tax.                   
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
86 Maharashtra Vidarbha Industries
Association
TEXTILES SECTOR -
1. Removal of sub-rule 10 inserted in CGST Rule 96 vide CGST Notification No.
03/2018 dated 23.01.2018 : Exporters are having huge amount of accumulated
input tax credit with them which they are unable to utilize towards their domestic
supplies or IGST refund on export option or by way of refund of unutilized input
tax credit in respect of export goods.
Accumulations are mainly on account of (i) availment of transition credits (ii)
existence of inverted duty structure (iii) capital expansions whereby exporters are
making huge investments for increasing production capacities and mainly buying
capital goods from domestic suppliers (iv) restrictions brought in vide CGST
notification no. 03/2018 dated 23.01.2018, applicable w.e.f. 23.10.2017 i.e. the
person claiming refund of IGST paid on exports of goods.
As such, it is recommended that restriction
imposed vide CGST notification no. 03/2018
dated 23.01.2018 that the person claiming
refund of IGST paid on export goods should
not have received supplies on which supplier
has availed the benefit under (i) CGST
notification no. 48/2017 dated 18.10.2017, (ii)
CGST notification no. 40/2017 dated
23.10.2017., (iii) IGST Notification no.
41/2017 dated 23.10.2017, (iv) Custom
notification no. 78/2017 dated 13.10.2017 and
(v) Custom notification no. 79/2017 dated
13.10.2017 may kindly be removed.
The GST policy wing may deliberate on this issue.  Notification
87 Assam, NER Laghu Udyog Bharati, 
Guwahati (NER), Federation of 
Industry & Commerce of North 
Eastern Region (FINER)
Budgetary Support The eligibility for budgetary support for units 
which were eligible for the area based 
exemptions but not availing the same as their 
turnover was below ₹ 1.5 Cr and SSI 
exemption were being availed by them.
DIPP
88 Maharashtra Bombay Chartered
Accountants’ Society/ Vidarbha
Industries Association
Refund Process needs substantial simplification 
[54 read with Rules 89, 96 and 96A]
Despite the best intentions of the Government,
substantial working capital of exporters is still
blocked due to refund related issues. Major
simplification is required in this front. A
simpler solution could be to permit an exporter
full input tax credit (as is currently permitted)
and a refund upto a particular percentage of
the export proceeds (say 9% of export
proceeds) by way of direct debit in the
Electronic Credit Ledger (subject to balance in
the said ledger) with no additional
documentation or paper work. It may be noted
that this would substantially benefit the SME
and would not result in leakages since what is
refunded is only what is lying the ECrL.
 The GST policy wing may deliberate on this issue.  Notification
89 Rajasthan Laghu Udyog Bharti Provision of Sec. 24 mandates that in case any person is required to pay tax under 
reverse charge [Sec.9 (3)], he is liable to obtain registration irrespective of his 
quantum of turnover. Further, due to such compulsory registration he becomes a 
taxable person [Sec. 2(107)] and also a registered person. Such provision is 
affecting a person otherwise not required to obtain registration due to his turnover 
below the threshold limit.
Exempt the person required to pay tax under 
reverse charge [Sec.9 (3)] from compulsory 
registration
The provision of RCM is applicable with respect to supply of 
certain limited no. of items only. The Council has listed such 
items, considering the revenue implications. Besides, the issue 
of RCM provisions related to supply received from 
unregistered person has been already considered by the 
Council applicable to only specific goods in case of certain 
notified classes of registered person.
Notification
90 Rajasthan Laghu Udyog Bharti, Mewar 
Chamber of Commerce and 
Industry
The textile sector should be exempted from requirement of submission of Form 
ITC-04, as it is a very time consuming and cumbersome Form.
The textile sector should be exempted from 
requirement of submission of Form ITC-04
State has raised the issue in GST Council. Gujarat has also 
raised the issue and after examining in the Law Committee, 
suitable relief may be given to the taxpayer. 
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
91 Haryana Haryana Chambers of 
Commerce and Industry, 
district Panipat
Haryana Chambers of Commerce and Industry, 
district Panipat chapter has also raised the 
inconvenience of issuance of E-Way Bill for 
Movement of goods for the purpose of various 
job works processes like weaving, tufting, 
dyeing, doubling, knitting etc.
E-Way Bill should be exempted from movement of goods 
to and from job workers in the textile sector. 
Composition taxpayers are 
small in size and hence 
offline tool was devised for 
them so that they can 
prepare their return on their 
own computer, re-check and 
then upload the same. This 
was also done to reduce the 
chances of error as he can 
check/re-check 
Notification
92 Punjab MSME and SME sector Extend deemed export status to supply of 
electricity by SEBs to MSMEs. SEBs to pass 
ITC benefits to customer.
MSMEs are dependent on electricity supply by SEBs. As 
electricity is exempt from GST and also liable to Electricity 
Duty, SEBs pass on entire tax to their customers. A large 
industry running on captive power, on other hand, is able to 
claim credit of all input taxes being part of manufacturing 
operation expenses.
The issue may be considered Notification
93 Punjab MSME and SME sector Grant deemed export status to supplies by 
domestic suppliers to Duty free shops.
Foreign tourists are more attracted towards goods 
manufactured by MSME sector. While earlier Excise law 
provided exemption form tax on supplies to Duty free 
shops, under GST no such exemption is available. Duty 
free shops have high establishment cost. These shops 
generate precious foreign exchange for the country.Duty 
free shops have high establishment cost. These shops 
generate precious foreign exchange for the country.
Though the Government is mulling an option to grant 
refund of tax to foreign bound buyers from such shops, 
shop itself have lost its price edge vis-à-vis sellers in local 
market
The issue may be considered Notification
94 J&K Laghu Udyog Bharti, 
Industrial Area Gangyal 
& Chamber of Commerce 
& Industries, Jammu.
Threshold limit of Rs. 50000/- for  issuance E-
way bill against intrastate supply is very 
meager. 
The Threshold limit for intra state supply should be revised 
like other states of Delhi and  Rajasthan  where it is upto 1 
lac and in Bihar, the threshold limit is Rs.  2 lacs.
The state govt. has the 
powers to change the 
threshold limit for issuance 
of E-way bill against 
intrastate supply . The 
request shall be considered 
as and when govt. deems it 
feasible. 
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
95 J&K Federatin of Industries, 
Jammu. 
Relaxation in E Way Bill It is suggested that the Relaxation of 100 KM per day limit 
should be relaxed for J&K State keeping in mind the Hill 
Terrain and Land Slide prone Areas resulting blockage of 
Roads for longer period. 
J&K has three biggest 
consumption regions- Leh, 
Srinagar and Jammu with all 
the regions about 250 Kms 
apart. Thus the suggestion of 
relxation of 100km per day 
limit does not auger well 
with the state.
Notification
96 Telangana Confederation India 
Industries (CII)
In case of export of goods with payment of 
IGST Notification no.3/2018 – CGST dated 
January 23,2018 prescribes that exporter of 
goods or services should not have received 
supplies on which supplier has availed the 
benefit. 
Further, circular No.45/19/2018- GST dated 
May 30, 2018 is issued to clarify certain 
aspects in Notification  no. 3/2018- CGST. 
One of such clarification is that the restriction 
imposed under Rule 96(10) of Central Goods  
and Services Tax Rules, 2017 is not applicable  
to an exporter  who has procured  goods  from 
suppliers  who have not availed the benefits of 
the specified notifications for their outward 
supplies. However, the circular  does not 
clarify whether the restriction  is applicable for 
an exporter who is directly  importing goods 
from outside India.
Clarity is awaited whether the exporter is eligible to claim 
refund in case they are importing goods by availing 
benefits under the following notifications.
 Notification No.78/2017- Customs dated the 13th  October  
2017( Exemption from BCD, IGST on import of goods by 
EOU)
Notification No.79/2017- Customs dated the 13th October 
2017
(Exemption from IGST on imports by AA, EPCG holders)
1. It is opined that the 
transactions falling under 
notification 78/2017 and 
79/2017 of customs act 
disqualifies an exporter to 
claim refund of tax paid on 
exports under rule 96(10) of 
the Act.
2. However a clarification 
may be requested from 
fitment committee in this 
regard.
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
97 Amendment made vide Notification No 3/2018 Central Tax 
dated 23/01/2018 to Rule 96 of the CGST Rules, 2017 be 
withdrawn to pave way for claiming refund of IGST paid 
on exports.
Centre: We may amend the 
rule so as to provide that the 
exporter can claim the 
refund of ITC or IGST paid 
on exports if the inputs 
actually used for making 
such exports were procured 
on payment of tax on which 
the benefits of Exemption 
Notification as specified in 
Rule 96(10) were not 
availed.
We may further provide that 
the exporters may give a self 
certificate for refund claims 
not exceeding to Rs. 5 Lakhs 
or a certification by 
Chartered Accountant for 
refund claim exceeding Rs. 
5 Lakhs.
NotificationEase of conditions for claiming refund under 
Rule 96 of CGST Rules 2017: Retrospective 
amendment to Rule 96 has been made vide 
Notification No 3/2018 dt 23.01.2018. Section 
96 of the CGST rules 2017 enables the 
exporters to claim refund of IGST paid on 
exports. The export refund accrues based on 
the shipping bills filed by the exporter and on 
filing Form 3B. 
The amendment to Rule 96 of the CGST Rules 
2017 vide Notification dt 23.01.2018 has laid 
out scenarios in which a person will not be 
able to claim refund of IGST paid on exports.  
The EOU’s which are importing goods under 
notification no 78/2017 Central Tax dt 
18.10.2017 following IGCRD rules wherein 
the Custom Duty and IGST is  exempted, will  
also not be entitled to pay IGST on exports and 
claim the refund under Rule 96.
Further, supplies made by EOU or advance 
license holder or EPCG holders to the exporter 
will also be covered by this amendment and 
thus affected adversely covering large section 
of exporters. 
The amendment is causing hardship to the 
exporters by way of accumulation of the IGST 
credit and hence blocking working capital 
which go against the very initiative of 
promoting and growing exports in Indian 
economy.
Confederation of Indian 
Industries (CII)
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
98 a. 
Maharashtr
a, b. 
Rajasthan,   
c. Haryana,      
d. U.P. ,                 
e. Punjab                  
f. Tamil 
Nadu 
Chamber Of Small 
Industry Associations, 
Thane/ Bombay 
Chartered Accountants’ 
Society / Laghu Udyog 
Bharti-Haryana, Haryana 
Chamber of Commerce & 
Industries (HCCI) and 
Yamuna Nagar Chamber 
of Commerce / India 
Industires Association 
(IIA), U.P., / MSME & 
SME Sector, Punjab / 
T.N. Small and Tiny 
Associations
Issue of Professional & Service Provider; 
Services under Composition Scheme
Professionals and service provider should be consider 
under  Composition tax may be the tune of  Rs 50 lakhs 
Service providers cannot be 
considered for benefit for 
composition.                                                                                                                                                                                                                                                               
Law 
Amendment
99 a. West 
Bengal, b. 
Uttrakhand, 
c. Tamil 
Nadu
(a). Federation of West
Bengal Trade
Associations ,
(b).Gadhchirauli 
Chandrapur Rice Millers
Association;
Karnataka Rice Millers
Association, (c).Bihar
Rajya Khaddanna
Vyavsai Sangh, (d).
Uttarakhand Industrial
Welfare Association , (e)
Federation of Tamilnadu
Rice Mill Owners &
Paddy - Rice Dealers
Association
Branded aata, rice, dal, etc., sold in a package
is taxable in GST at the rate of 5 %. However,
if the owner of the brand foregoes his
enforceable right in respect of such a brand
then it becomes exempt from tax. Many
established players with brand are foregoing
their right by mentioning the same on the
package. As a result small manufacturers in
business of those goods having no registered
brand are facing a tough time in competing
with them. Since the goods are highly price
sensitive small players (including those in
composition scheme) are losing business in a
big way in local markets also.
State: We may need to re-
look at the issue of branded
products and its definition as
the purpose of taxing
branded rice etc is being
defeated.                                                               
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
100 a. 
Rajasthan,   
b. M. P.,               
c. Haryana        
d. M.P.             
Federation of Small & 
Medium Industries, 
W.B.,             [FOSMI] ; 
Advisory group to LRC, 
Laghu Udyog Bharti / , 
Association of Industries 
Madhya Pradesh, Indore ; 
Ahilya Chamber of 
Commerce & Industry; 
Commercial Tax 
Practitioner Association, 
Indore
In pre - GST regime Excise duty upto Rs. 1.5 
Crore turnover was exempt, whereas the 
threshold limit has now become Rs 20 Lacs 
only. 
Some Trade bodies have recommended that CGST should
be exempted upto Rs 1.5 Crores turnover specially for
manufacturers. The Advisory
Group to LRC where Laghu Udyog Bharti was one of the
members has recommended to give credit of 50 per cent of
the CGST paid in cash and 25% of IGST paid in cash, as
credit on the outward supplies made by the MSME up to a
turnover of ₹ 1.5 Crores. That is, if the MSME up to a
turnover of ₹ 1.5 crore charges CGST @ 9per cent out of
which cash component is 4per cent, then credit @2per cent
(50per cent of CGST/IGST paid in cash) will be given in
the electronic credit ledger of the registered person either as 
CGST credit or IGST credit depending on the type of
transaction.   
Law 
Amendment
101 a. 
Maharashtr
a, b. 
Rajasthan,        
c. Punjab
Bombay Chartered 
Accountants’ Society, 
Maharashtra , Advisory 
Group to LRC, Laghu 
Udyog Bharti, Rajasthan, 
MSME & SME Sector, 
Punjab. 
Principal – Agent treatment under Schedule – I 
– a person selling the goods on behalf of 
registered principal is deprived of exemption 
of ₹ 20 Lacs of his services as agent, since the 
turnover of goods supplied on behalf of 
registered principal is also included in his 
turnover. Compulsory Registration required 
for agents be clarified as being applicable only 
to consignment agents. [Section 2 (5), read 
with 24 (vii)].
Section 24 (vii) requires a compulsory registration in cases 
where the supplies are made on behalf of other taxable 
persons. While on a strict legal interpretation, this can 
cover cases where agents stock goods on behalf of the 
principal and then supply on their behalf, there is 
substantial confusion in the trade whether simple brokers or 
commission agents who merely facilitate a transaction 
directly between two parties are eligible for threshold or are 
hit by Section 24 (vii), specifically in view of the wide 
definition of agent provided under Section 2 (5). It is 
suggested that either an amendment in Section 24 (vii) be 
carried out to restrict the scope to cases of consignment 
agents stocking and supplying goods on behalf of principal 
or a suitable clarification be issued in this regard.
State: The GST policy wing 
may clarify the same.   
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
a. 
Maharashtr
a, b. 
Karnataka,   
c. Orissa,         
d. 
Rajasthan,   
e. Jammu 
& Kashmir,                
f. Tamil 
Nadu
(a). Chamber Of Small 
Industry Associations, 
Thane/ (b). Bombay 
Chartered Accountants’ 
Society / (c). Mahratta 
Chamber of Commerce 
Industries & Agriculture, 
Pune/ (d). STP 
Association/ Shri Kapad 
Vyapari Sangh, 
Pandharpur, Dist. 
Solapur (e).Peenya 
Industries Association, 
(f). Orissa Small Scale 
Industries Association, 
Cuttack / Utkal Chamber 
of Commerce & Industry, 
Bhubaneswar(UCCI) 
/Odisha Small Scale 
Industries 
association(OSSIA)
/Odisha Assembly of 
Small and Medium 
Enterprise 
Association(OASMEA)
/ Odisha Young 
Entrepreneurs 
Association(OYEA)
/North Odisha Chamber 
of Commerce & 
Industry(NOCCI), 
Balasore / CII, Rajasthan 
, Federation of Industries, 
Jammu / Tamil Nadu 
Small & Tiny Industries 
Asscn. / Small Engg. 
Industries Industries 
Welfare Association.
Quarterly Tax  Payment due to delayed 
payments received from Customers.
With the change in period of filing returns to quarterly 
from monthly, for taxpayers having turnover below Rs. 5 
crores, the payment also should be made quarterly. The 
biggest challenge for MSMEs is Delayed Payments 
received from customers.
                                                                                                                                                                                  
Maharashtra: To facilitate 
Small Taxpayers and SME,  
payment of tax on quarterly 
basis can be provided where 
amount of tax to be paid is 
less than Rs. 25,000/- in a 
quarter.  Karnataka: GST 
Council has already taken a 
discussion in this regard 
wherein quarterly returns 
have been proposed. 
Payment should be monthly 
to ensure timely collection 
of taxes.
Notification102
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
103 Rajasthan Mewar Chamber of 
Commerce & Industry
Reduction of tax liability in case of issuance of 
Credit Notes:
It has been represented that there are situations 
where during a period sales return of a 
taxpayer exceeds the supply for which 
taxpayers’ issues credit notes to their buyers. 
As of now, the taxpayer is allowed to set – off 
such tax liabilities in subsequent GSTR 3B. 
However, if a person does not have any 
outward supply in that month, then how such 
reduction of tax on account of credit notes has 
to be made.
It is requested to allow to enter consolidated Debit or 
Credit Note (party-wise/ monthly/quarterly/ yearly) in 
GSTR – 1.
This has been provided for 
in the new return system. 
The second issue is also 
addressed in the new return 
system.
Law 
Amendment
104 Himachal 
Pradesh
Interest on Reversal of Capital goods  It is suggested that in case of reversal of input tax credit on 
capital goods, the words “along with applicable interest” in 
Rule 43(h) of the CGST Rules, 2017 be omitted. 
No reasons have been given. 
Not recommended.
Notification
105 Maharashtr
a
Bombay Chartered 
Accountants’ Society
Requirement of Proportionate Reversal 
attributable to exempted supplies to be done 
away with where exempted supplies are less 
than 5% of aggregate turnover
[17(2) & 17(3)]
As a trade facilitation measure, it be provided that the 
provisions of Section 17(2) and 17(3) will not apply where 
the value of exempted supply is less than 5% of the 
aggregate turnover. While this will not result in major 
revenue loss, it will result in a substantial simplification 
where the proportion of exempted supplies is minimal.
The GST policy wing may 
deliberate on this issue. 
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
106 Maharashtr
a
Vidharbha Industries 
Association
COAL ISSUES :  
1)         Coal is one of the largest energy 
supplier or major raw material for most 
MSMEs Industry in India. Currently, the coal 
is under a bracket of 5% and cess of Rs.400 is 
charged to the consumer. However, in most 
cases this cess remains unused and it also 
increases the burden of MSME Unit by 
eroding their profitability and also affecting 
cost benefit. It is requested of the council to 
allow utilization of cess across any other GST 
head for MSME Unit.
 
2)      In certain cases major consumed raw 
materials are taxed at rates, which is lower 
than the final product rates. Since most 
industries have credit periods of more than 60 
days (in certain cases can go up to 90-180 
days), this results in huge tax liability for 
MSME Industrial Unit which results in 
Working Capital constraints. It is requested of 
the council to look at the differential rates.
Solution may be provided for the same.  GST policy wing may 
deliberate on the issue.                   
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
107 Himachal 
Pradesh
Non-levy of GST on goods listed in section 
9(2) of CGST Act 
In order to maintain a level playing field, it is suggested 
that all goods be brought into the purview of GST at the 
earliest, including petroleum, alcoholic liquor, and 
electricity. Other laws that govern the levy of taxes / duties 
on such non-GST goods be repealed.  
The GST Council can take 
appropriate decision on this 
issue. Ideally petroleum 
products should be brought 
within GST but constraint is 
that petroleum products 
fetches bulk revenue to 
States and if fully brought 
under GST, State’s revenue 
will be impacted badly. 
However some hybrid tax 
system on petroleum product 
may be considered with levy 
of rebatable GST and some 
non-rebatable VAT by 
States. This non-rebatable 
levy may be to the extent 
that State’s finances are not 
impacted.
Policy Issue
108 Madhya 
Pradesh
Laghu Udhyog Bharti, 
Madhya Pradesh Ujjain                
phone number 
9425915824
ITC in the credit ledger of MSME taxpayer is a 
capital cost to MSME.
such ITC not being the revenue of Governemnt, a part of it 
(70-80%) may be transferred to the loan account of MSME.  
MSME unit is identifiable by a unique "Udhyog Aadhar 
Card" given by Industry Departemnt of State.
Policy Issue
109 Chamber of Small 
Industry Associations 
(COSIA)
Goods destroyed in Transit:
As per Sec. 17(5) ITC shall not be available 
w.r.t. goods destroyed. Pursuant to this 
provision, it has been requested to clarify that 
in situations where goods removed from place 
of business on which tax has been paid are 
destroyed in transit due to circumstances of 
exceptional nature, then can a taxpayer claim 
benefit of such tax paid goods by way of re-
credit or refund & reverse the ITC availed on 
such goods destroyed?
Clarification Sought GST Policy Wing may 
Clarify
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
110 Manipur, 
Nagaland, 
Tripura
Manipur Industry 
Development Council 
(MIDC), Nagaland, 
Tripura Wholesale 
Grocery Merchants 
Association
Simplified Return Filing More simplified return filing which will not give burden to 
smal enterpreneurs
The model has been 
finalised in the GST Council 
Meeting and once it is 
operationalised it will help 
the small enterpreneurs
New Return 
system
111 Mizoram Mizoram Merchants 
Association (MIMA)
GST return system is too complicated. New Return 
system
112 Nagaland Poi Shijho 2.GST filling is a problem as no expert 
manpower is available in small business 
houses to file the GST.
2. GST return filling funds of the msme units and small 
trade should be done in a short duration of time.
 So far as the filing of 
Return is concerned, the 
issue will be resolved once 
the New Return is 
implemented.
New Return 
system
113 Karnatak Karnatak
Chamber of
Commerce & Industry,
Hubballi
Opportunity may please be made to submit 
Revised GSTR-3B and GSTR- 1
Request for alternative or option be given  New return system is being 
finalised. Amendments are 
being proposed.
Policy Issue
114 Chhatisgar
h, Bihar
Laghu Udyog Bharati, 
Urla Industries 
Association, Bihar Rajya 
Khaddanna Vyavsai 
Sangh, FICCI, BIA
Return Form Easy Return Form should separately be designed for 
MSME sector for compliance purposes.
Is already under 
consideration.
New Return 
system
115 Rajasthan Laghu Udyog Bharti Necessary facilitation should be provided in 
both Custom portal and GSTN to separately 
report and record details of such exports which 
are made on consignment basis. Details in 
relation to such exports should be allowed to 
be revised within a specified time period (say 3 
months). Consequences of export viz. options 
to be adopted for its zero-rating, filing of 
refunds etc. should trigger only upon revision 
of such details or expiry of such specified time 
period, whichever is earlier. Further, re-import 
of unsold goods should not have any GST 
implication.
Necessary facilitation should be provided in both Custom 
portal and GSTN to separately report and record details of 
such exports which are made on consignment basis.
The issue relates to revision 
of return data. A committee 
on simplification of return 
has been formulted by the 
GST Council which may 
consider and report to the 
Council. Any decision in 
this respect would be taken 
by the GST Council. 
New Return 
system
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
116 Himachal 
Pradesh
Registration in case of transfer  Section 22 (4) of the CGST Act provides that transferee 
shall be liable to be registered, with effect from the date on 
which the Registrar of Companies (ROC) issues a 
certificate of incorporation giving effect to such order of 
the High Court or Tribunal. However, the ROC does not 
issue any Certificate of Incorporation specifically to give 
effect to the order of the High Court on amalgamation or 
demerger under Scheme of Arrangement. Therefore, It is 
suggested that the words “giving effect to such order of the 
High Court or Tribunal” be deleted since in several 
situations there are delays in issuing such Certificate of 
Incorporation by the ROC. 
No infirmity appears as 
transfer would happen only 
when High Court/Tribunal 
endorse it. Any delay on part 
of ROC is not warranted. 
Law 
Amendment
117 Himachal 
Pradesh
Simple Annual Audit Formats  It is suggested that a comprehensive annual return formats 
in Form GSTR-9 be thoroughly thought out, checked, beta-
tested, use case tested and thereafter be put in place by the 
end of June 2018. It is also suggested that, comprehensive 
annual return formats be designed for entities with 
aggregate turnover exceeding Rs. 5.0 Crores and simpler 
formats for those with aggregate turnover less than Rs. 5.0 
Crores be evolved and notified well in time. 
State: Why different annual 
return formats based on 
turnover? No reasons have 
been assigned.
New Return 
system
118 Invoice: Distinction between B2C and B2B
Invoices - Amendment to Rule 46 - CGST
Rules
There shall be distinction between B2B and B2C invoices
as there is no ITC taken on B2C invoices. Requirement of
mentioning HSN or SAC may be waived for B2C invoices
say value below ₹ 50,000/- in case e-way bill is not
required.
This may be considered.
HSN may not be insisted, if
description of the goods is
given on the invoice or in
the alternative, no penalty
should be imposed if wrong
HSN is given so long the
rate of tax is correctly
applied.
Notification
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
119 Maintainance of Records - Account Keeping -
Amendment to Rule 56 - CGST Rules
A supplier of service with turnover less than ₹ 50 Lakh,
and for other suppliers with turnover less than ₹ 1.5 crores,
maintenance of Cash book, Bank Book and Purchase
Register should be considered adequate except in respect of
supplier for which the supplier intends to avail the input
credit.
This may be considered for
suppliers exclusively making
B2C supplies and not
availing any ITC. 
We may consider having a
general power to relax/
modify obligations,
conditions or restrictions as
prescribed under these rules
on the recommendation of
the Council for certain
classes of registered persons
and to notify the special
procedure to be followed in
such cases.
Notification
120 Bihar Bihar Industries 
Association
One Bill of Import may have multiple vehicles. 
No option for multiple vehicles is available in 
E - way Bill
Option of multiple vehicles should be provided for one 
(01) invoice
May be considered Notification
121 Himachal 
Pradesh
HAROLI BLOCK 
INDUSTRIAL 
ASSOCIATION
3)      GST composition limit for Himachal 
Pradesh should be increased.
GST composition limit for Himachal Pradesh should be 
increased as of Uttrakhand.
Government of HP will 
consider 
State Issue
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
122 Maharashtr
a, 
Karnataka, 
Haryana
(a). Chamber Of Small 
Industry Associations, 
Thane (b). Mewar 
Chamber of Commerce 
(Rajasthan), (c). Orissa 
Small Scale Industries 
Association, Cuttack, (d). 
Thane Small Industries 
Association/ (e).Nag-
Vidarbha Chamber of 
Commerce, (f). 
Federation of Karnataka 
Chamber of Commerce 
and Industry, (g). Laghu 
Udyog Bharti-Haryana, 
Haryana Chamber of 
Commerce & Industries 
(HCCI)
There are lot of job work done in the 
surrounding areas and it is very cumbersome to 
prepare E Way Bills all the time for small 
distances.
E-Way Bill Exemption :                                                         
Exemption limit of E Way Bill should be 100 kms. for Intra 
State movement of goods is required.
 Discretion provided to State 
under rule 138(14) departs 
from one nation one tax 
concept. Council should 
bring all states together for 
uniform policy across the 
country.                                                                                                         
State Issue
123 Confederation of Indian 
Industries (CII)
ITC on Construction Equipment:
Section 17(5) of CGST Act restricts the input 
tax credit on Motor vehicles and other 
conveyances. Section 2 (76) defines Motor 
vehicles as meaning as assigned to it in clause 
(28) of section 2 of the Motor Vehicles Act, 
1988.
Some of the construction equipment more 
specifically one which are mounted on tires 
and used for “off highway” operations are 
covered by Motor Vehicle Act and accordingly 
required to be registered. These Construction 
Equipment’s are used for construction/ mining 
activities which are subject to GST. Reference 
to Motor Vehicle Act has created doubt on 
eligibility of ITC on such construction 
equipment. Since the construction 
Equipment’s referred above are used for 
furtherance of business, input tax credit be 
allowed on the same.
Suggestion
Clarification/ explanation be issued that construction 
equipment to be treated as capital goods and Input tax 
credit available on same.
It is proposed to allow ITC 
on such equipment.
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
Federation of Industry & 
Commerce of North 
Eastern Region (FINER)
Assam, 
Himachal 
Pradesh
124 Solution / Suggestion:In view of the fact that the 
devolution was made even prior to the implementation of 
GST under the erstwhile Notifications, as a gesture of 
goodwill and support as demonstrated, it is strongly 
appealed that the entire amount (i.e. 100%) of Central Tax 
or 50% of Integrated Tax paid in Cash ledger be extended 
instead of 58% or 29% respectively as notified. 
. Notification1.       Refund of 100% of CGST / 50% of 
IGST paid in Cash Ledger: The scheme has 
drastically reduced the quantum of refunds 
eligible to the Industries in the region and the 
comparative advantages that used to be 
enjoyed. GST and the refund method 
enshrined is in principal not different from the 
system of central excise refund that was being 
followed before GST, and further, the system 
of refund was being practised through the 
tenures of different finance commissions in the 
country has not changed.  
However, a fiction of Central share has been 
inbuilt which was never there in the refund 
process and this has curtailed the quantum of 
refunds drastically. This curtailment has been 
limited to the tax which accrues to the Central 
Government under Central Goods and Service 
Act, 2017 and Integrated Goods and Services 
Act, 2017, after devolution of the Central tax 
or the integrated tax to the States, in terms of 
Article 270 of the Constitution. 
The percentage support is limited to tax paid 
by debit in cash ledger only and that at 58% 
post devolution of 42% to states. The spirit of 
goodwill and support as demonstrated in the 
Notification is not visible in such stringent 
curtailment of the incentives which were being 
extended pre GST in this region, especially 
when the region remains a Special Category 
State and yearns for industrial thrust and 
support.  This curtailment has been done 
despite there being nothing new in the 
devolution formula as a result of GST
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
125 Maharashtr
a
Chamber of Small 
Industry Associations
Pre - Deposit in Appeals: Pre-deposit of 20%
is unreasonable and logically irrational. It is
submitted that the provision is harsh and
would deter the tax payer from filing appeals
even in genuine cases. When the entire
admitted liability is already recovered, there
should not be any provision for pre-deposit of
any amount towards the disputed liability.
Section 112 (8) requires payment of 20% of the tax in
dispute for filing appeal (apart from full payment of the
admitted liability along with interest and penalty). It is
submitted that the provision is harsh and would deter the
tax payer from filing appeals even in genuine cases. When
the entire admitted liability is already recovered, there
should not be any provision for pre-deposit of any amount
towards the disputed liability.
State: The GST policy wing 
may deliberate on this issue.                                                                      
Law 
Amendment
126 Maharashtr
a
Chamber of Small 
Industry Associations
Demand of tax short paid/ not paid:         
The time limit is un-reasonable- Sec 73 (1) and
73 (10)
The provision allows issuance of notice
demanding the tax within a period of 3 years
counted from the date of Annual Return
(actually 3 months prior to issuance of
adjudication order). It is submitted that the
period is too long. It will keep the industry in
perpetual fear and uncertainty. 
In past this limitation was only six months,
which was later enhanced to one year because
filing of invoices with returns was done away
with. Now, when the entire data of inward
supplies, outward supplies, the classification,
value etc. would be available on the GST
Portal, there is no justification for enhancing
the limitation to 3 years (which actually
translates into more than 4 ½ years as it is
computed from the date of Annual Return)
Suggestion:
a. Limitation may please be brought down to six months.
b. The limitation should be counted from the date of
monthly return, instead of the Annual Return
The GST Policy Wing my 
delibrate this issue.
Law 
Amendment
127 a. 
Maharashtr
a, b. H.P.                   
Chamber of Small 
Industry Associations, 
BBN Industries 
Association, Baddi
Advance Ruling Authority Issues It is submitted that the Advance Ruling Authority may be
made an all India Authority so that its ruling applies to
whole of the country and there remains no scope for
conflict between authorities of two states.
Secondly, the authority ought to be elevated to an
independent institution such as Tax Tribunals. When the
officers serving in the department act as Advance Ruling
Authority there is an inherent conflict of interest and
possibility of bias.
The GST Policy wing may 
deliberate the issue. There is 
a need of hearing, dealers 
operating in multiple states 
through a national authority. 
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
128 Tamil 
Nadu, 
Madhya 
Pradesh 
Confederation of Indian 
Industries (CII) 
,CODDISSIA, 
Associationof Industries, 
M.P. 
Refund of accumulated ITC on inverted tax
structure on textiles: There is a huge
accumulation of Input Tax Credit with
Manmade Fibre Industry on several counts
such as inverted duty structure between raw
materials and yarns for which refund formulae
have been specified under rule 89(2) (h) of
GST, however, there is accumulation of other
inputs and services utilized in the
manufacturing process, as well as capital
goods and machinery etc. The accumulation of
huge ITC due to capital goods is causing loss
to the industry and exporters. Though job work
is covered under refunds of accumulated ITC
due to inverted tax structure but does not
redress the accumulation due to ITC on capital
goods.
Refund of accumulated ITC due to Inverted tax structure
including ITC on capital goods be granted to textile sector
and job work.
 Notification No. 20/2018 - 
Central Tax (Rate) dated 
26.07.2018 has already been 
issued allowing refund of 
accumulated ITC on account 
of higher Input tax in textile 
fabrics also. The other 
request regarding Capital 
Goods Credit refunds to 
exporters may be 
considered. 
Notification
129 Maharashtr
a
Bombay Chartered 
Accountants’ Society
Delayed Registration to be effective from the 
date of liability rather than the date of 
application
 [25(8) read with Rule 10(3)]
If the person fails to apply for registration within 30 days
from the date he becomes liable, the registration is granted
with effect from the date of application. This results in
undue hardships for the ‘open period’ between the date of
liability and the date of application. It is recommended that
in the initial phases of GST, the registration may be granted
with effect from the date of liability or in the alternative, a
mechanism for grant of administrative relief in genuine
cases may be introduced. 
The GST policy wing may
deliberate on this issue. In
Maharashtra, during VAT
era, we provided
administrative relief for such
deserving cases. 
Law 
Amendment
130 Maharashtr
a
Bombay Chartered
Accountants’ Society
Registration Threshold should be determined
not only on the basis of aggregate turnover but
also on the basis of turnover in the State [2(6),
2(112), read with 22]
Section 22 requires every person to register in each of the
States from where he makes a supply of his aggregate
turnover exceeds the threshold of Rs. 20 lakhs. Therefore
once the aggregate turnover threshold is breached at an all
India level, his registration requirement is triggered not
only in the States where his turnover is high, but even in
States where he has negligible turnover. 
It is therefore recommended that along with the aggregate
turnover criteria of Rs. 20 lakhs, another criteria of
‘turnover in a State’ be introduced for mandatory
registration requirement. This second threshold may be
kept at a lower level of Rs. 5 lakhs. 
The GST policy wing may
deliberate on this issue. 
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
131 CBIC 1.Udaipur Chamber of 
Commerce & Industry, 
Udaipur
2.Chamber of Commerce 
& Industry, Kaladwas
No adjustment of IGST  Vs CGST+SGST is 
allowed. 
The adjustment of IGST Vs CGST+SGST is not allowed
for corrections. In case where any assessee has deposited
GST in wrong head, he should be allowed for adjustments.
This has been discussed 
repeatedly and was not 
found feasible by Principal 
CCA
Law 
Amendment
132 Assam Federation of Industry & 
Commerce of North 
Eastern Region (FINER)
ITC on Transitional Stock by the small 
manufactures - The treatment meted out by the 
GST laws and schemes to the small 
manufacturers has been very harsh or random, 
which appears to be inadvertent and cannot be 
intentional.
Solution / Suggestion: An appeal is being made by way of 
this memorandum and it is suggested that another proviso 
be added to Section 140 (3) as: 
Provided that where the registered person was a 
manufacturer carrying on manufacturing activity 
manufacturing activity but was not registered under Central 
Excise by virtue of exemption Notification No. 8/2003-CE 
dated 01.03.2003 prior to 01.07.2017, such registered 
person shall be deemed to be a registered person other than 
a manufacturer for the purposes of the first proviso 
hereinabove. 
Law 
Amendment
133 Tripura, 
Himachal 
Pradesh, 
Rajasthan, 
Jammu & 
Kashmir, 
Karnataka, 
Meghalaya
1. Tripura Chamber of 
Commerce and Industry ;       
2. Tripura Wholesale 
Grocery Merchants 
Association, Baddi 3. 
Barotiwala Nalagarh 
Industries association, 
HP,           4. Rajasthan 
Chamber of Commerce & 
Industry;                 5. 
Federation of Industries, 
Jammu,                                        
6.  Karnataka Small Scale 
Industries Association,           
7. Laghu Udyog Bharti            
8. Meghalaya Contractors 
Association
Threshold Limit for Registration for MSME Registration threshold limit to be increased to Rs.50 lakhs 
for MSME sectors.
Increasing the registration 
threshold will impact the 
State revenue adversly. 
However, the MSME sector 
can easily opt for the 
Composition Scheme as the 
limit is Rs.75 lakhs for 
availing compositing 
facility.
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
134 Himachal 
Pradesh
Himachal drug 
Manufacturers  
Association
Refunds of inputs tax paid on capital goods.
GST refunds are not approved for Investments 
made in Capital Goods i.e. Machinery, Repair 
and Maintenance/rent etc. And are only 
allowed to be set off against the GST liability. 
This again blocks a substantial part of the GST 
input considering the expensive machinery 
investment required in MSME Pharmaceutical 
Industry. On purchase of Vehicle for the 
Company, GST Input Credit should be 
allowed.
 Inverted duty structure is 
for the production process 
where inputs are taxable at 
higher rate and resultant 
output is taxable at lower 
rate. Capital Goods have 
different definition distinct 
from inputs. As such Legally 
higher tax incidents on 
capital goods does not 
qualify for refund under 
inverted duty structure. As 
the Plant Machinery is used 
for producing different 
categories of outputs it may 
be difficult to allocate 
capital goods ITC in respect 
of products with lower GST 
rate. As such in present 
Legal scenario there is no 
infirmity in denying refund 
of ITC in respect of capital 
goods. 
Law 
Amendment
135 Himachal 
Pradesh
Himachal drug 
Manufacturers  
Association
Refunds of input tax paid on services/job work
GST law was brought to merge the numerous 
taxes that are in place and replace it with one 
single tax. Service Tax and VAT were both 
brought under the ambit of GST which was a 
big relief to the business man. However while 
processing the refunds department is denying 
the GST refunds on Service/Job Work 
Changes, Courier Service etc. 
For a tax payer facing 
inverted duty structure 
refund of ITC in relation to 
the inputs having higher 
GST rate as against lower 
GST on output products is 
available. Input services 
does not qualify to be 
considered for refund in 
inverted duty structure 
cases. Unless the law is 
modified to include input 
services for refund 
qualification the view taken 
by the Proper Officers seems 
correct. 
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
136 Himachal 
Pradesh
Shri Subhas Mahajan, 
General Secretary 
Industries Damtal
MSMEs have to pay reverse charge on 
transport services and legal charges from the 
cash deposit and not from the GST credit lying 
with them. This is not a good practice & 
procedure
MSMEs should be exempted from the payment of the  
reverse charge as the Government is not going to loosen 
this account as the reverse charge paid are credited to credit 
ledger of the party.
Reverse charge, where 
payable (only in limited 
circumstances) have to be 
paid from cash ledger and 
not from credit ledger. 
MSMEs cannot be an 
exception to the provision.
Notification
137 Himachal 
Pradesh
Shri Subhas Mahajan, 
General Secretary 
Industries Damtal
Under VAT regime the VAT paid on material 
used in the constructing factory building was 
allowed as credit as the building is a plant and 
machinery which is not under GST regime.
THE GST paid on all the material used in construction of 
factory building should be allowed as credit
ITC on building materials to 
be used in construction of 
factory building has valid 
ground. Council may 
consider revisiting the 
provisions which restrict 
ITC.
Law 
Amendment
138 Himachal 
Pradesh
Shri Subhas Mahajan, 
General Secretary 
Industries Damtal
GST paid on the cars used for the business 
purpose is not allowed as credit
GST paid on cars and other vehicles used exclusively for 
business purpose should be allowed as credit
Need of amendment in 
Section 17(5) which restricts 
ITC on motor vehicles have 
been already identified. 
With identified amendment 
this grievance may get 
settled.
Centre: The credit for tax 
paid on passenger cars even 
used for business purpose 
was not allowed even in the 
pre-GST regime. 
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
139 Suggestion that this clause be withdrawn. Rajasthan: As per section 
16 (2), the recipient shall be 
entitled to avail the credit of 
input on payment made by 
him of the amount towards 
the value of supply of goods 
or services or both 
alongwith tax payable 
thereon. However this 
provision is in the favour of 
MSME industry for 
receiving the payment of 
supply given by them.                                                                              
Karnataka: This provision 
was there for services even 
earlier and to bring parity 
this was also brought for 
goods also. This was widely 
appreciated by MSMEs and 
hence the suggestion may 
not be considered. The 
recipient would anyhow 
become eligible to claim 
ITC back when he makes the 
payment and hence there is 
no jeopardy.
Law 
Amendment
Clause regarding ‘reversal of input credit if 
invoice not paid within six months’ will go 
against MSMEs since big clients will deduct 
the GST amount when settling the bills and 
MSMEs don’t have the necessary bargaining 
power to resist it.
CII (Cofederation of 
Indian Industry), 
Rajasthan Steel Chamber, 
Laghu Udyog Bharti;  
Federation of Karnataka 
Chamber of Commerce 
and Industry
Rajasthan, 
Karnataka
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
140 Rajasthan Bhiwadi Manufacturers 
Association
Credit of CENVATABLE Excise Duty/Service 
Tax pertaining to per GST Regime and is being 
deposited in GST Regime due to Audit by the 
department or finalization of Cases:
In present scenario os GST Regime if any such 
demand is deposited in Excise Duty/ Service 
Ta Challan there is no defined way of 
Claiming Credit of such deposited Demand.
The Department should permit to deposit such demand 
under CGST head instead of Excise/ Service Tax head. or
Option to modify TRAN-1 should be given so that credit of 
the deposited demand can be reflected in CGST.
It is provided in section 142 
(8)(a) that Input Tax Credit 
of tax levied, in persuance of 
an assessment or adjucation 
proceedings instituted, 
weather before, on or after 
the appointed day, shall not 
be available. This provision 
has been made after 
deliberating the issue in 
detail. Thus, the request may 
not be considered. Section 
73 of GST law clearly said 
that the self admission of 
demand cannot be claim as 
ITC.
Law 
Amendment
141 Rajasthan Laghu Udyog Bharti No credit available for Capital goods procured 
under old regime and received under GST 
regime. However, in terms of Sec. 140(5) of 
the CGST Act, such benefit is available for 
availing credit on inputs/input services.
ITC of Capital goods procured under old regime and 
received under GST regime should be allowed.
Section 140 (5) of the CGST 
Act, 2017 allows the 
taxpayer to take ITC in 
respect of inputs received on 
or after the appointed day 
but the tax in respect of 
which have been paid by the 
supplier under the existing 
law. It is suggested that ITC 
in respect of capital goods 
received in similar 
conditions may also be 
allowed to facilitate the 
trade and industry.
Law 
Amendment
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
142 Rajasthan Laghu Udyog Bharti It is requested that exempt/nil rated supplies 
should be excluded from Aggregate Turnover.
Exempt/nil rated supplies should be excluded from 
Aggregate Turnover.
In VAT regime, exempted 
goods were not part of 
turnover for composition 
dealers. In GST same may 
be treated as if Government 
finds fit.
Law 
Amendment
143 Rajasthan Indian Soapstone 
Producers Association, 
Udaipur
The rate of payment of GST on Royalty on 
minerals are at the rate of 18%. Since rate of 
tax on supplies through mining is 5% hence it 
leads to credit accmulataion. And as refund on 
input of service is not available it leads to 
blockage of funds. 
The rate of GST on Royalty should be equivalen to the rate 
of GST on corresponding mineral. 
Notification
144 Punjab MSME and SME sector Allow tax  payment after realisation of 
payment by small service providers  
It is known fact that unlike supplier of goods, small service 
providers are not able to receive full invoice amount from 
the recipient. Also their payments are often delayed.Earlier 
service tax rules provided flexibility of payment of tax by 
small service providers (up to ₹ 50 lakhs) according to the 
month in which payment is received. 
As the method is time tested, it should be brought-in in 
GST law also.
The issue may be considered Law 
Amendment
145 Punjab MSME and SME sector SME exporters who are short of funds are 
facing huge liquidity crunch as under the GST 
they are required to pay tax on inputs and upon 
exports such tax can be taken as refund. This 
blocks their capital in payment of tax affecting 
their liquidity.
 Government has announced introduction of e-wallet which 
was postponed for six months. SMEs exporters want 
introduction of e-wallet facility from 1st of October, 2018.
the facility of e-Wallet for 
MSME/SME Exporters may 
be started at the earliest.
Administrative 
Action
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM
146 Puducherry Confederation of Indian 
Industry, Puducherry 
(CII)
Presently, EXIM scrips can be used only for 
customs duty payment, which can be extended 
for GST payment also.
Customs duty comes around 7.5% only. Whereas GST is 
18% which blocks the money and claimable also.  The 
option for export manufacturers to use the same for the 
GST payable against their imports may be  considered..
Duty credit scrips were 
permitted for payment of 
custom duty, excise duty and 
service tax. As per Trade 
Notice No 1112018 
dt.30.06.2017 of DGFT, the 
Duty Credit Scrips (issued 
under Chapter 3 of the FTP) 
cannot be used for payment 
of IGST and GST 
compensation cess in 
imports, and CGST, SGST, 
IGST and GST 
compensation cess for 
domestic procurement.
Policy Issue
Detailed Agenda Note Volume 2 Agenda for 29th GSTCM



Confidential

Addendum to Agenda Item 2 for
29th GST Council Meeting
Volume – 3
04 August 2018


Detailed Agenda Note Volume 3 Agenda for 29th GSTCM





Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
3 of 28


File No: 484/29th GSTCM/GSTC/2018
GST Council Secretariat

Room No.275, North Block, New Delhi
Dated: 27 July 2018

Notice for 29th Meeting of the GST Council on 04 August 2018
The undersigned is directed to refer to the subject cited above and to say that the 29th Meeting of the GST Council will be held on Saturday, 4 August
2018 from 11:00 am onwards at Hall No 2-3, Vigyan Bhawan, New Delhi. The Meeting is convened to discuss mainly the issues, concerns and suggestions
of the Micro, Small & Medium Enterprises (MSME) in the GST regime and any other agenda with the permission of the Chairperson of the Council.
2. The Detailed Agenda Note, if any, will be sent separately in due course of time.
3. All State Governments and CBIC are requested to send their suggestions or concrete action points for this single agenda item to Member (GST), CBIC /
GST Council before 29th July, 2018, as discussed in the 28th GST Council Meeting.
4. Please convey the invitation to the Hon’ble Members of the GST Council to attend the meeting.

(-Sd-)
(Dr. Hasmukh Adhia)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653

Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said meeting.
2. PS to Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the request to brief Hon’ble Minister about the above said
meeting.
3. The Chief Secretaries of all the State Governments, Delhi and Puducherry with the request to intimate the Minister in charge of Finance/Taxation or any other
Minister nominated by the State Government as a Member of the GST Council about the above said meeting.
4. Chairperson, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the Council.
5. Chairman, GST Network
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
4 of 28

Agenda Items for the 29th Meeting of the GST Council on 04 August 2018
1. Confirmation of the Minutes of 28th GST Council Meeting held on 21st July, 2018
2. Discussion to address issues and concerns of Micro, Small & Medium Enterprises (MSME) in GST regime
3. Incentivising Digital Payments in GST Regime
4. Any other agenda item with the permission of the Chairperson
5. Date of the next meeting of the GST Council
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
5 of 28

TABLE OF CONTENTS
Agenda No. Agenda Item Page No.
2
Agenda Item 2 (Addendum): Discussion to address issues and concerns of
Micro, Small & Medium Enterprises (MSME) in GST regime
6

Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
6 of 28

Discussion on Agenda Items
Agenda Item 2 (Addendum): Discussion to address issues and concerns of Micro, Small & Medium Enterprises (MSME) in GST regime
After circulation of Detailed Agenda Notes – Volume 2 of the 29th GST Council Meeting on 31 July 2018, States of Delhi, Gujarat, CBIC Zones of Ranchi and
Hyderabad and Federation of Indian Micro and Small & Medium Enterprises (FISME) have forwarded issues pertaining to MSMEs. Additional issues received from
West Bengal earlier are also incorporated in this compilation.
2. Accordingly, the broadsheet containing the various proposals/suggestions related to MSME sector, in addition to those placed before the Council in Volume –
2 of the Detailed Agenda Note, is placed before the Council as addendum to the Agenda Item 2.
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
7 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
1. Gujarat Gujarat Chamber
of Commerce &
Industry
There are 600 industrial SME clusters and
7000 artisan/micro Enterprise clusters
operating in India. For developing these
MSME clusters, there is a need for
Common Facility Centre, where the
MSMEs can avail Facilities like R&D Lab,
Testing Centre, Pilot Plant facilities, State
of the art Library, Convention Centre and
Training Centre for manpower potential for
the Skilled Development also for Start-up
Training and Getting training program for
skilled and semi-skilled workers.
Government support is needed for setting up Larger issue. Related to policy on
MSME.
Not related to
GST
2. Gujarat Gujarat Chamber
of Commerce &
Industry
As per Public Procurement Policy for
Micro and Small Enterprises (MSEs)
annual procurement of minimum 20% has
to be made by Public Sector Undertakings
and other Government institutions from
Micro & Small Enterprises. At present
Service industries are taking the maximum
benefits and manufacturing sectors are not
getting these benefits due to various
reasons. Also, there is lack of transparency
in the tendering process.
The public procurement target should be
complied in true sprit by the PSUs

Norms should be made more transparent and
practical and the policy should be revised
accordingly so that manufacturing units are
encouraged to take benefit
Larger issue. Related to policy on
MSME.
Not related to
GST
3. Gujarat Gujarat Chamber
of Commerce &
Industry
Many Banks are not helping the Sick Units
once they categorized as NPA. The
unavailability of handholding and lack of
financial support causes the unit to close
down causing large scale unemployment
and huge losses
Timely and adequate assistance to MSMEs
and rehabilitation effort should begin on a
proactive basis when early signs of
sickness are detected. The concept of
classifying accounts as Special Mention
Account (SMA) should be taken positively
and necessary support and handholding
should be provided from SMA 1 stage itself.
Thus, many Sick units can be revived and the
situation of workers getting unemployed can
be avoided.
Larger issue. Related to policy on
MSME.
Not related to
GST
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
8 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
4. Gujarat Gujarat Chamber
of Commerce &
Industry
In line with GOI policy directives to
achieve 20% Year on Year growth in credit
to Micro, Small & Medium sector by all
nationalized Banks, they are not following
this directive. This is a major problem for
the growth of SMEs.
If Banks strictly follow this directive, many
MSMEs will be able to expand their
infrastructure thus resulting in requirement of
more jobs.

Larger issue. Related to policy on
MSME.
Not related to
GST
5. Gujarat Gujarat Chamber
of Commerce &
Industry
Automation is rapidly changing the way
MSMEs look at production. Automation
reduces the dependence on labour for
mechanical tasks on one hand and increases
the need of manpower possessing
specialized skills to operate these
automated machines. Our MSMEs are
much behind other in automation as
compared.
- Training provided by the ITIs should be
given on these automatized machines.

-MSMEs should be encouraged to use
automated machines in their factories
-Government support for purchase of such
automated machineries is needed
Larger issue. Related to policy on
MSME.
Not related to
GST
6. Gujarat Gujarat Chamber
of Commerce &
Industry
The MSMEs need a constant supply of
labour for smooth production. However,
even though their operations are small, they
are subjected to the same labour laws and
rules that are applicable to Large
corporates.
-The labour laws should be simplified and
MSMEs should be provided some leniency
and flexibility in labour laws in order to
increase their employability.

-Self-certification scheme should be
promoted and expanded to include all labour
related laws.

-Hiring Contract labour should be allowed for
MSMEs with simple conditions
-MSMEs should be given freedom to lay-off
such contract labor as needed.
Larger issue. Related to policy on
MSME.
Not related to
GST
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
9 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
7. Gujarat Gujarat Chamber
of Commerce &
Industry
The number of skills that are being
imparted through the ITIs are very less
when compared to global standards. This is
causing a skill gap in the industry,
especially for new skills.
- New skill sets need to be introduced in the
curriculum of technical colleges and ITIs

- Districts Industrial centers (DICs) should
tie-up with the local industries for skill
training sessions.

- Continuous skill up-gradation plan should
be introduced in the Industrial Policies of the
States

- There should be an industry-institution cell
in all ITIs, Polytechnics and engineering
colleges, which will help bridge the gap in
identification of right students for the right
MSMEs.

- Internship for polytechnic and engineering
students needs to be made mandatory, at least
for six months, to give first hand exposure of
MSMEs to the students.
Larger issue. Related to policy on
MSME.
Not related to
GST
8. Gujarat Gujarat Chamber
of Commerce &
Industry
The MSMEs have to follow the same
grievance re-dressal mechanism as
applicable to Large units, although they
lack the resources and influence power of a
large unit. The increasing number of
pending cases related to delayed payments
to MSMEs is a witness to this problem.
While the impact of a delayed payment is
less for a large unit, for an MSME it may
threaten its very existence.

- An efficient and fast alternate dispute
resolution mechanism and a separate
grievance re-dressal authority need to be
established for the MSMEs.
Larger issue. Related to policy on
MSME.
Not related to
GST
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
10 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
9. Gujarat Gujarat Chamber
of Commerce &
Industry
To balance the employment in rural and
urban areas, more focus is now required to
develop rural and village-based industries.
- Industrial infrastructure needs to be
developed in the rural area.

- Gujarat can be developed on these lines as
24 hours electricity is available in rural area.

-The State can become a role model for the
other states to replicate.
Larger issue. Related to policy on
MSME.
Not related to
GST
10. Gujarat Gujarat Chamber
of Commerce &
Industry
Marketing and branding of the products and
services remains a key concern for the
MSME units
- A cluster-based portal with virtual
exhibition round the clock will put the
MSMEs on global platform, enhancing the
market of the products manufactured by
MSMEs.
Larger issue. Related to policy on
MSME.
Not related to
GST
11. Gujarat Gujarat Chamber
of Commerce &
Industry
Collateral free loans the banks are not
properly implementing this scheme.
MSME units, even though eligible for the
scheme, are not aware of this scheme and
the banks are also not encouraging this
scheme as it is collateral free.
-There is a need to implement this scheme
properly
-Awareness has to be generated amongst the
MSMEs regarding this scheme
-Scheme application process needs to be
simplified
-Banks need to encourage this scheme
amongst the MSME units and bank branches
should provide information about the scheme
and its application process
Larger issue. Related to policy on
MSME.
Department of
Financial
Services.
12. Gujarat Gujarat Chamber
of Commerce &
Industry
The dealers are facing issues and difficulty
in rectifying GSTR-3B. Also, the time limit
of 10 days for filing GSTR-1 is very short
-Rectification should be allowed in GSTR-3B
and the process should be made simple
-Time limit for filing GSTR-1 needs
reconsideration
The issue will be addressed with
implementation of the proposed
simplification of GST Return
procedure.
Law related issue
(New Return
System)
13. Gujarat Gujarat Chamber
of Commerce &
Industry
After dealer applies for cancellation of
registration necessary action is not taken
within 30 days as required by rule 22 (3).
Dealer is prevented from filing fresh
application and the system shows penalty
payable by the dealer for not filing returns.
-It should be ensured that necessary time-
bound action is taken within 30 days
-Filing of fresh application should be allowed
-Clarity should be provided on the effective
date of registration
This issue will be handled by the
proposed amendment in the GST
Act by way of insertion of
provision of suspension of
registration.

Law related issue
(Proposed Law
Amendment)
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
11 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
14. Gujarat Gujarat Chamber
of Commerce &
Industry
The criteria of working days are different
for both the department and the taxpayer.
This causes delays and confusion while
filing returns
-The criteria of working days should be kept
same for both department and taxpayer.
At present, taxpayer is not
required to have physical contact
with Tax Authorities. All
processes related to registration,
filing of return, claiming refund,
payment of tax etc. are made on-
line wherein 24*7 services are
available by GSTN.
Circular
15. Gujarat Gujarat Chamber
of Commerce &
Industry
The taxpayers currently have to approach
multiple departments at multiple locations
for queries related to SGST, IGST and
CGST. Although the departments have
started Helpdesks, these are limited to
issues concerning the respective
department only.
An integrated Helpdesk for all GST matters
should be started, which should co-ordinate
with all GST related departments and offer
guidance and support to the dealer at a single
point. This Helpdesk should also provide
response to grievances raised through e-
mails.
There is dual control in GST.
Distribution of all taxpayers is
made between two authorities.
Taxpayers are not required to
contact two authorities to resolve
their issues.
Administrative
Action
16. Gujarat Gujarat Chamber
of Commerce &
Industry
The late fee for delay in filing of GST return
is high and, in some cases, exceeds the tax
liability of the dealer. There are many cases
where there has been a genuine delay due to
system issues or unintended mistake
without the motive of tax evasion, where
such high penalty has been charged.
- The amount of late fee should be
rationalized and in no case should it exceed
the dealer’s tax liability.
Amount of late fee are already
rationalized by the GST Council.
Notification
17. Gujarat Gujarat Chamber
of Commerce &
Industry
Refund is not received within reasonable
time even after order is passed
-It should be ensured that refund is received
within a specified reasonable time limit after
order is passed
The issue is already resolved. Administrative
Action
18. Gujarat Gujarat Chamber
of Commerce &
Industry
In cases where file is transferred from State
department to Central department and
earlier 90% refund was given under section
54(6) then balance refund is not issued.
-Balance should be issued in such cases It is requested to bring specific
cases in this regard.
Administrative
Action
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
12 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
19. Gujarat Gujarat Chamber
of Commerce &
Industry
While cases are demarcated between State
and Central Authorities, the supervision of
refund is by internally decided officer of
either department. Thus, in some cases
while the case falls within the domain of
Central Department the refund is
supervised by officer of the State
Department and vice-a-versa.
-The demarcation of cases needs to be
followed strictly and the supervision if refund
should be done accordingly.
It is requested to bring specific
cases in this regard.
Administrative
Action
20. Gujarat Gujarat Chamber
of Commerce &
Industry
Purchase is in July and export under LUT is
say in August and there is no excess credit
in August then refund is not admissible
because of mismatch in Form 3B & GSTR
1
The issue needs to be discussed and resolved This is system related issue and
will be resolved by GSTN.
GSTN
21. Gujarat Gujarat Chamber
of Commerce &
Industry
There is widespread confusion amongst the
MSMEs due to the contradictory advance
rulings made by separate authorities and
there is a fear looming over them that they
would be subjected to heavy penalties in the
future due to these contradictory rulings
Government should consider a centralized
Authority for Advance Rulings (AAR) to
clarify certain issues, as existed in the
previous indirect tax regime.
The issue will be resolved by
devising appropriate mechanism
in this regard.
Law Amendment
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
13 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
22. Gujarat Gujarat Chamber
of Commerce &
Industry
Debit note related problems
System requires turnover to be shown in the
debit note. In case debit note is to be issued
only for differential tax, problem in
submitting debit notes.
Section 34 for debit note and credit note
requires the same to be issued in case where
a tax invoice is issued and the price or the
tax is wrongly charged. In case the sales
were earlier claimed as exempted and hence
bill of supply was issued and later on the
seller considers it to be taxable still as per
law debit note cannot be issued for tax. If
issued then also problem in claiming input
tax credit by the customer because the seller
had shown sales against bill of supply.
-Necessary modifications are required in the
system and the rules
In commercial transactions, both
turnover and tax are shown in
debit note.

As per provision of the act, credit
can’t be claimed on basis of bill of
supply. If taxpayer has wrongly
issued a bill of supply, he may
rectify his mistake by issuing tax
invoice in the same tax period in
such a way that turnover remains
the same. Thereafter, this issue
can be resolved.
Circular
23. Gujarat Gujarat Chamber
of Commerce &
Industry
Due to non-refund of GST paid on capital
goods, units are non-viable from day 1 as
compared to integrated units and exports
become non-viable due to higher capital
cost
-Refund of ITC on procurement of capital
goods should be allowed.
In the earlier regime, refund was
not given on tax paid on capital
goods. This is a policy decision.
Law Amendment
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
14 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
24. Gujarat Gujarat Chamber
of Commerce &
Industry
In GST regime almost all services have
been covered under 18% tax rate. However,
GST paid on all the building material items
like cement, steel etc. used for
manufacturing shed or warehouse for
manufacturing activity is not allowed as it
is restricted for credit if used in immovable
property. Factory building is the basic
requirement for installation of plant and
Machinery and storage of Raw materials
and Finished Goods and without Factory
building no manufacturing process can be
carried out, However, the same is not
covered for input credit.
-Input used in construction of production /
industrial Building or GST charged by
building contractor for production / industrial
building should be allowed as input GST
credit.
This is a policy decision. In earlier
regime, such ITC was not
available to taxpayers.
Law Amendment
25. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
GST TRAN – 1:

As the last date of filing the GST TRAN-1
application was 30/09/2017 and due to
system failure the date had been extended
unto 28/12/2017, mean while there were
tremendous problem in uploading data in
GSTN Portal due to some or the other
technical glitches
Give a chance to all the tax payers just for
15days to re-open and let them file and enjoy
the benefit of the credit in stock as on
30/06/2017. As it is One Nation One Tax,
many Litigation going in the different courts
in different states in India will get finished, by
one Great step taken by The Finance Ministry
of India to re-open the TRAN-1 for 15days
who have not filed till today.
Gujarat has already represented to
the Council / Law committee.
Notification
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
15 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
26. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
a) A taxpayer cannot avail the benefits of
the Input Tax Credit Goods / Services for
construction of immovable property of his
own account or business purpose.

b) Works Contract service supplied for
construction of immovable property.
The provisions under Section 17 relating to
the Input Tax Credit needs to be rationalized
and brought at par with the simple concept
that if outward supplies of a person is taxable
then the inward supplies of the goods and/or
services should be allowed as credit, which
are for the business. Immovable Property in
case of Hotel Industry, Industries.
This cannot be accepted, as there
can be similar representation from
other sectors
Law Amendment
27. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Waiver of Late Fees for any returns under
GST Act till March 2018
Practically, MSME business is engaged in a
business in manufacturing and trading but
many of them are depending on third party
work for their filing of returns, preparing
accounts, etc. In a small town and village
there are less of connectivity till today also.
So for boosting their level of satisfaction
against GST and Govt., the Govt. should
waive of penalty till March – 2018.
This cannot be accepted, as
amount of late fee has been
reduced considerably.
Notification
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
16 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
28. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Removal of ITC - 04 Practically, MSME business is engaged in a
business in manufacturing but many of them
are depending on third party job work activity
and for the same they are already uploading
E-way Bill during movement of goods on job
work basis. Further, for filing of another
return in ITC-04 is burden to MSME business
on and above uploading data through E-way
Bill. Further, based upon E-way Bill,
GSTR-1 is going to be generated auto
populated. GSTR-1 is not containing any
transaction which are made on job work basis
therefore also ITC-04 is not required because
there is no any linkage between E-way Bill
V/s. ITC-04 as well ITC-04 V/s GSTR-1. In
this situation ITC-04 should not be remove,
alternatively it should be voluntary.
Revised format of ITC-04 has
been approved by GIC.
Notification
29. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Annual Return & Audit The powers of audit vested to chartered
accountants and cost accountants under the
GST Law should be extended to Advocates,
Tax Practitioners.
This cannot be accepted, as they
have to submit his accounts
audited by CA under the Income
Tax Act also.
The issue of assigning audit work
to advocates was already
discussed in the meeting of GST
Council. The Council rejected this
proposal.
Policy Issue
(Non MSME
issue)
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
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S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
30. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Complexity due to HSN requirement HSN Summary to omit from purchase returns
or HSN or major raw material should only be
asked from
As per the proposed simplification
of GST Return procedure, table
for reporting supplies with the tax
liability shall not capture HSN but
would continue to capture
supplies at tax rate level as is the
present practice. The details of
HSN shall be captured at four
digits or more from all the
dealers, however at different
frequency of reporting. HSN wise
details in a separate table shall be
captured in the regular monthly
return. However, this table shall
be optional for the small
taxpayers. Small taxpayers
would have facility to report
HSN in the annual return.
Notification
31. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry

FISME
Credit note only from supplier is creating
lot of problem
allow buyers to add credit note/debit note and
all acceptance from supplier. Credit Note &
Debit Note should be abolished and as per the
Central Excise Rules, compulsory bill is to be
issued to avoid credit issues. So, the
confusion point of whom to issues and who
cannot issue will be out
This cannot be accepted as both
supplier and recipient cannot be
allowed to file the details of credit
note / debit note.
Law Amendment
32. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Multiple Returns Make GST Return ONE only i.e. combine
GSTR 1-2-3 & 3B in one common Form and
in one single click all data must be filed.
The issue will be addressed with
implementation of the proposed
simplification of GST Return
procedure.
Law Amendment
(New Return
System)
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
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S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
33. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Revision of Returns Provide facility to revise GSTR1 & GSTR 3B
returns. It is must. i.e. Traders must be
entitled to rectify their mistakes.
The issue will be addressed with
implementation of the proposed
simplification of GST Return
procedure. There shall be given
facility to revise his return.
Law Amendment
(New Return
System)
34. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Payment of GST under any wrong head. Payment of GST under any wrong head
(IGST-CGST-SGST) should be adjustable by
trader or system itself.
Not accepted. Law Amendment
35. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Liability of buyer to reverse the credit if the
supplier is non-compliant. If a dealer
purchases goods from a registered dealer,
and that particular dealer does not pay tax,
the disallowing of input credit to the
purchaser is totally unjust and harsh
Responsibility of mismatching of return 2A
& 2 must not be on traders. Allow all credit
to traders who file his return in time. This rule
should be abolished.
The issue will be addressed with
implementation of the proposed
simplification of GST Return
procedure. There shall be given
facility to revise his return.
Law Amendment
(New Return
System)
36. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Free use of ITC Input Tax Credit should be allowed to be used
against all types of tax liabilities, e.g. CGST,
IGST, SGST, interest, late fees etc.
Not accepted. Law Amendment
37. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Liability on exporters Exporters must not be liable to pay any GST
either on inward or outward goods and make
system of refund for exporters easy, simple
and fast.
Exporters are already given an
option to either export the goods
or services without payment of
IGST or with payment of IGST.
Law Amendment
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S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
38. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
IT Software for compliance for MSME Provide easy & cheaper software to small
traders.
Facility is already given by
GSTN.
GSTN
39. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Help in compliance Provide cheaper consultants to traders to
implement the procedures of GST.
This is not the responsibility of
Government.
Administrative
Action
40. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Internet Problems Provide full speed of internet in each & every
village of India
GSTN has already enhanced the
facility.
Not related to
GST
41. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Centralised Registration Remove the system of State wise registration
whose business is in each and every state. But
give some alternative system of single
registration only. Say head office only.
Not acceptable. Law Amendment
42. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Cost of Digital Payment Do not force for digital payment and digital
payment must be free from any type of
charges.
Not acceptable. Department of
Financial
Services.
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
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S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
43. Gujarat Laghu Udyog
Bharti

Rajkot Chamber
of Commerce &
Industry
Single Interface It is very essential to make Common and
single office of CGST & SGST for smooth
and easy functioning.
Not acceptable, however there is
single interface in GST. Taxpayer
is not required to present before
two different authorities for tax
compliance.
Administrative
Action
44. Delhi




West
Bengal





Federation of
Small & Medium
Industries, W.B.,
[FOSMI]
Withdrawal of excise duty exemption
available upto Rs. 1.5 Crores.
Under VAT, there was an Incentive
scheme for MSMEs manufacturing
certain specified goods. But no such
incentive is now available under the
SGST Act.

If exemption cannot be granted to us in
CGST then alike VAT some incentive
scheme may be envisaged for us where
we get full reimbursement of the tax paid
under GST Act(s).

Compensate the MSME for this additional
burden of tax.


Incentive scheme should continue under
SGST
Formulate a scheme for MSME
upto Rs. 5 Crores allowing re-
imbursement of part of tax paid by
both Central and State
government.
It was a conscious decision of
Empowered Committee to day
away with the tax based
exemptions. Reimbursement
based incentive is under
consideration.


This is a policy call. Most states
have reimbursement based
schemes. This may be considered
by Central Govt. as well.
Notification
45. West
Bengal
Federation of
Small & Medium
Industries, W.B.,
[FOSMI]
The composition limit for small
enterprises making B2C supplies only
should be raised to Rs 5 Crore.

This may be considered only after
the GST system stabilises.
Law Amendment
46. West
Bengal
Federation of
Indian Exporter
Organisations
(Eastern Region),
For migrated dealers GST Council had
taken a decision that 90% will remain
with the States. But the said principle
does not apply for newer registered
entities. Since Central offices are at
distant location we have to face huge
problems in moffusul areas.
Administrative
Action.
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S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
47. West
Bengal
Federation of
Small & Medium
Industries, W.B.,
[FOSMI]
Big suppliers from whom we mostly
purchase are not uploading details of
supplies to us in GSTR 1. Many a times
repeated requests to them also do not
yield the desired result. Our fear is that if
our transactions remain unmatched then
in audit etc we will forced to pay the tax
availed as ITC with interest and penalty.
Already officers have started issuing
notices where the total ITC claim is found
to be in excess of GSTR 2A.

Uploading of invoices by buyer and
provisional credit should be allowed.
Big business entities need to be
compelled to upload their data
timely so that smaller entities do
not suffer. MIS of top 20 % Tax
Payers may be made available to
nodal officers within 10 days from
the last date of filing of return for
enforcing compliance. This will
also become a serious issue after
the transition stage of the new
return system is concerned.
Law related issue
(New Return
System)
48. West
Bengal
Federation of
Small & Medium
Industries, W.B.,
[FOSMI]
To further help our farmers we should
encourage that the companies engaged in
the business of fruit drinks buys the
requisite fruit pulp from within the country
only. Today, the companies engaged in
such a business largely import fruit
concentrates from outside India as it is
cheaper for them. To help more MSME
units to come up in this sector we should
increase the import duty on concentrates
imported from outside India.
It may also be considered
favourably so as to boost domestic
sector.
Rate Issue.
49. West
Bengal
Federation of
Small & Medium
Industries, W.B.,
[FOSMI]
To encourage food processing units of
MSME engaged in manufacture of jams,
jellies, pickles, etc., GST rates on such
items may be reduced to 5% to bring it at
par with the VAT rates

It may be considered favourably
as it will also be beneficial for
agricultural sector.
Rate Issue
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
22 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
50. FISME Operational issues;
i. Proof of payment
It has been brought to notice that
many PSUs
hold GST payments and ask for
proof of GST payment. This is
unwarranted and pose various
practical problems: GST payments
are done on specific dates,
sometimes using credits making it
difficult to show GST
payments against each and every
invoice

Clarification may be issued

Circular
51. FISME Excluding unregistered dealers from
Public procurement
Admittedly the number of small
unregistered dealers will remain 10s of
thousands of times more than the
registered ones. Precluding smaller ones
from supplying anything/service to Govt
entities is height of callousness
Such an abhorrent thought should be given up
by the government
Not related to
GST
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
23 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
52. FISME Input Tax Credit (ITC) restrictions-
• The current ITC provisions exclude tax
even genuine business expenses such as
hotel stay, vehicle expenses used for
travel, repair of building, any exp on
staff welfare etc.
• In the spirit of making Indian businesses
competitive, it is important that their
operational costs are not unduly
burdened
• Shockingly GST paid on factory Sheds
and Buildings even for manufacturing
activities will not be allowed to be
claimed as ITC
• Barring a small negative list of
activities/items, ITC should be allowed
Law Amendment
53. FISME GST on sale of assets of unit under NPA/
IBC
• A clarification is required:
• When fixed assets and machinery of a
sick unit or unit declared as NPA has to
be sold would it attract GST? If so at
what rate?
• A grave problem arises if GST for
property sale is applied to the distressed
MSME at the market value making it’s
revival a big problem. Even if it is sold
at book value, the buyer's ability to raise
enough working capital credit is eroded.
• Is there any viable option for attacking
this problem?
• A clarification may be issued.
• GST on sale of stressed assets, may be
kept at a lower slab @ 5%
Circular
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
24 of 28

54. FISME Work Contracts
i. In case of works contract payment is
linked with performance as per
contract which definitely exceed more
than 180 days as mentioned in the
proviso. In that case it would cause
adverse effect on the tax payer since
full tax is required to be paid at the
time of supply on outward work
contract while ITC will not be
available on inward work contract
thru sub-contractor.
ii. Pre GST contracts
On-going contracts of pre-GST era
have not been amended to take into
effect of GST by some of the
Government Departments viz. Bihar
State Power Transmission Corp. and
Punjab State Power Transmission
Corp. On top of that, some of them are
withholding a portion of pre-GST
value of payments, resulting in double
adverse effect on the vendor.
iii. As per PGCIL, freight charges other
than GTA are exempt from GST. All
contractors are of the view that freight
charges are part of composite supply
and liable for GST. PGCIL is of the
view it is not composite contract as
there is separate contract for supply.
i. Proviso should be amended to the effect
to provide that payment along with tax
which is due as per contract terms, is not
paid within 180 days









ii. Government departments need to be
instructed to issue suitable contract
amendments without any further delay.
















iii. Clarification could be issued in such
matters or may include in official FAQ.
Law Amendment
















Administrative
Action



















Circular
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
25 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action





55. FISME Supplementary Invoice: pain point for
automotive supply chain
In Automotive supply chain, customer’s
settle rates every quarter or 6 months on
account of changes in Raw Material prices
or Forex fluctuation etc. These rates are
given with retrospective application and
suppliers raise supplementary invoices
accordingly. In pre-GST era suppliers could
Raise only one bill with attached details of
all bills and their rate differences.

Now after GST- a supplementary bill has to
be raised for each invoice i.e. a few hundred
additional invoices.
This is totally unnecessary, wasteful,
tedious & costly.
A simple mechanism could be devised Law Amendment
56. Ranchi
Zone
North Bihar
Chamber of
Commerce &
Industry,
Muzaffarpur
Facing problems in comparing goods with
traders, who are filing quarterly returns
whose business turnover is below 5 cr with
traders, who are filing monthly returns
whose business turnover is above 5 Cr.
The turnover slab of 5cr should be extended. The grievances/ issues are of
Policy matter. The same is being
forwarded for consideration in the
ensuing meeting of GST Council.
Notification
57. Ranchi
Zone
A. K. Tulsiyan &
Co. CA,
Muzaffarpur
There are high probabilities of mistake in
filing of returns as they are unfamiliar to
online GST submission. Due to this reason,
many of tax invoices has been wrongly
uploaded or not getting uploaded.
Rectification of mistake should be provided
at GST Portal, itself.

-
Law related issue
(New Return
System)
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
26 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
58. Ranchi
Zone
A. K. Tulsiyan &
Co. CA,
Muzaffarpur
Notices/queries are send online on portal or
on email. Since many of dealers do not
know how to operate system properly.
The notice should be send by post also to the
dealers.
Rules
59. Ranchi
Zone
A. K. Tulsiyan &
Co. CA,
Muzaffarpur
Notices have been sent to dealers for
mismatch in input claims in GSRT-3B and
GSRT-2A as many of the dealers have not
uploaded GSTR-1 on time.
Non-uploaded of GSTR-1 should be
considered before issuing the Notice
Administrative
issue
60. Ranchi
Zone
A. K. Tulsiyan &
Co. CA,
Muzaffarpur
Cases of refund in case of wrong selection
of Minor/major head can be minimized.
A concept of E-wallet should be introduced
in Electronic Cash Ledger
Law Amendment
61. Ranchi
Zone
Singhbhum
Chamber of
Commerce &
Industry
E-way bill requirement in case of Job-
worker should be removed.
There should be provision for revision in
GST return. By doing so a no. of MSME units
will be saved from costly compliance process
of GST.
Rules
62. Ranchi
Zone
Singhbhum
Chamber of
Commerce &
Industry
Levy of penalty for typographical errors in
generation of e-way bill should be released
by checking the documents and levy of
minimum penalty
Circular
63. Ranchi
Zone
Singhbhum
Chamber of
Commerce &
Industry
The threshold limit of generation of E-way
bill should be increased to Rs. 2 lakhs for
intra-state movement of goods
Notification
64. Ranchi
Zone
Jharkhand Small
Industries
Association,
Ranchi
Revision of return Facility for revision of returns within the due
date of return filing should be allowed.

Law related issue
(New Return
System)
65. Ranchi
Zone
Jharkhand Small
Industries
Association,
Ranchi
Correction/revision of returns filed during
last one year.
Returns filed during last one year have errors
and needs to be corrected/ revised. One time
facility for rectification should be allowed.
Law related issue
(New Return
System)
66. Ranchi
Zone
Jharkhand Small
Industries
Association,
Ranchi
GST Credit on Diesel for D.G. Set should
be allowed.
GST credit on Diesel used by MSME as
fuel/running D.G set should be allowed to
bring down the cost of production.
Amendment
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
27 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
67. Ranchi
Zone
Jharkhand Small
Industries
Association,
Ranchi
RCM provision is very complicated and
should be scrapped.
RCM provision is very complicated and
should be scrapped as it does not impact
revenue.
Law Amendment
68. Ranchi
Zone
Jharkhand Small
Industries
Association,
Ranchi
Intra-state e-way bill monetary limit. Intra state monetary limit for e-way bill
should be made uniform across all the states
to have uniformity
Notification
69. Ranchi
Zone
Jharkhand Small
Industries
Association,
Ranchi
GST credit on Civil Support Structure of
Plant & Machinery.
GST credit on Civil Support Structure of
Plant & Machinery should be allowed. The
present provision needs to be clarified/
explained in detail to avoid
confusion/misinterpretation.
Law Amendment
70. Ranchi
Zone
Bihar Industries
Association
(BIA)
Frequency of Returns Taxpayers opting composition and having
turn over upto 50L should be allowed to file
single annual return.
Law Amendment
71. Ranchi
Zone
Bihar Industries
Association
(BIA)
Composition Scheme to Service Sector in
SME
The benefit of the Composition Scheme
should also be extended to Service Sector in
SME.
Law Amendment
72. Ranchi
Zone
Bihar Industries
Association
(BIA)
Refund of Input tax in case of Inverted Tax
Structure
Simplify the refund process and make refund
on priority basis
Circular
73. Ranchi
Zone
Bihar Industries
Association
(BIA)
Multi Vehicle in E-way Bill There is need to have multi vehicle option in
single e-way bill for smooth transportation
mainly in case of import of goods.
Notification
74. Ranchi
Zone
Bihar Industries
Association
(BIA)
TRAN-1 Verification It is suggested that an SOP should be created
and widely circulated for TRAN-1
verification instead of demanding of lot of
papers and personal appearance before
authority.
Administrative
Action
Detailed Agenda Note Volume 3 Agenda for 29th GSTCM
28 of 28

S. No. State/
Centre
Name of the
Taxpayer /
Association
Grievance / Issue Trade Suggestions State /Centre Comments Action
75. Hyderabad
Zone
Cherlapally
Industries
Association
Trade submitted that many of the small
business community where the business is
mostly carried out by illiterates whose
turnover is much less than the threshold
limit of Rs.20 lakhs have obtained GST
registration thinking that these are
compulsory basing on wrong advice of
consultants and now these taxpayers could
not claim exemption and cancel their
registration.
The trade suggested that a one time waiver of
penalty for non-filing/late filing and one time
permission to avail exemption even though
GST Registration was taken should be
provided so that these taxpayers could file
NIL return and cancel their registration.
In terms of Section 22 (2) of
CGST Act, it is mandatory that all
the taxpayers registered under the
existing law shall take registration
under the Act. However, they are
at liberty to cancel their
registration if their turnover is less
than 20 lakhs. As many of these
taxpayers have not filed their
returns, waiving of late fee for the
taxpayers upto the turnover of 20
lakhs can be recommended.
Notification
76. Hyderabad
Zone
JMD Metals During the E-way bill checking, goods of
the taxpayer were found being transported
without invoices and E-way bill and the
officers detained the goods and issued the
notice. The taxpayer has accepted the
mistake and agreed to pay GST & Penalty
and the taxpayer paid them through online
portal. However, the officers could not
release the goods as the liability could not
be uploaded into the liability ledger of the
taxpayer as there is no provision to upload
form GST MOV-09. The taxpayer could
not adjust the duty and penalty paid in the
liability ledger as per above GST MOV-09
order and hence facing difficulty in taking
release of the goods.
The provision for uploading Form GST
MOV-09 should be enabled in the online
portal, meanwhile the taxpayer may be
enabled to manually enter the details of form
GST MOV-09 details in their liability ledger
so that the amount paid can be adjusted.
As generation of e-way bill is
mandatory, the provision for
uploading the GST MOV 09
details may be taken up on
priority.
GSTN


Detailed Agenda Note Volume 3 Agenda for 29th GSTCM



Confidential





Agenda for
29th GST Council Meeting
Volume – 4

04 August 2018


Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 2 of 9



Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 3 of 9

File No: 484/29th GSTCM/GSTC/2018
GST Council Secretariat

Room No.275, North Block, New Delhi
Dated: 27 July 2018


Notice for 29th Meeting of the GST Council on 04 August 2018
The undersigned is directed to refer to the subject cited above and to say that the 29th
Meeting of the GST Council will be held on Saturday, 4 August 2018 from 11:00 am onwards
at Hall No 2-3, Vigyan Bhawan, New Delhi. The Meeting is convened to discuss mainly the
issues, concerns and suggestions of the Micro, Small & Medium Enterprises (MSME) in the
GST regime and any other agenda with the permission of the Chairperson of the Council.
2. The Detailed Agenda Note, if any, will be sent separately in due course of time.
3. All State Governments and CBIC are requested to send their suggestions or concrete
action points for this single agenda item to Member (GST), CBIC / GST Council before 29th
July, 2018, as discussed in the 28th GST Council Meeting.
4. Please convey the invitation to the Hon’ble Members of the GST Council to attend the
meeting.

(-Sd-)
(Dr. Hasmukh Adhia)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653


Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the request
to brief Hon’ble Minister about the above said meeting.
2. PS to Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the
request to brief Hon’ble Minister about the above said meeting.
3. The Chief Secretaries of all the State Governments, Delhi and Puducherry with the request to intimate
the Minister in charge of Finance/Taxation or any other Minister nominated by the State Government
as a Member of the GST Council about the above said meeting.
4. Chairperson, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the
Council.
5. Chairman, GST Network
Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 4 of 9
Agenda Items for the 29th Meeting of the GST Council on 04 August 2018
1. Confirmation of the Minutes of 28th GST Council Meeting held on 21st July, 2018
2. Discussion to address issues and concerns of Micro, Small & Medium Enterprises
(MSME) in GST regime
3. Incentivising Digital Payments in GST Regime
4. Any other agenda item with the permission of the Chairperson
5. Date of the next meeting of the GST Council
Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 5 of 9
TABLE OF CONTENTS
Agenda No. Agenda Item Page No.
3
Incentivising Digital Payments in GST Regime
6
4
Any other agenda item with the permission of the Chairperson
i. Notifying the due dates for furnishing the details in FORM GSTR-
1, FORM GSTR-2 and filing the return in FORM GSTR-3 and
FORM GSTR-3B
9

Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 6 of 9
Discussion on Agenda Items
Agenda Item 3: Incentivising Digital Payments in GST Regime
Briefly stated, with an objective to incentivise digital transactions, an Agenda Note was
circulated for consideration by the GST Council in its 23rd Meeting [held on 10.11.2017]. A revised
Agenda, by way of an addendum, was circulated in the 28th GST Council meeting held on 21.07.2018,
which proposed as follows:
i) The GST concessions on digital payments be given on the B2C transactions through the
modes that are used across the country. Accordingly, it is proposed that to begin with GST
concession be given only on the B2C transactions made through RuPay (Debit Card) and
UPI-Unified Payment Interface, BHIM, USSD.
ii) The GST concession shall be given by way of refund to the consumer in his account through
an automated route.
iii) The concession shall be 20% of total GST paid subject to the total ceiling of Rs 100 (Rs 50
CGST and Rs 50 SGST) per transaction.
iv) The CGST amount given as cashback shall be pooled in by the Centre and SGST amount
shall be pooled in by the respective State.
v) Upon approval of the proposal, the exact modalities for providing the concession shall be
put in place in consultation with the Line Ministry (Ministry of Electronic & Information
Technology).
2. Revenue implications:
2.1 The volumes and revenue implication under the proposed modes are as follows:
A. Volumes:
S. No. Modes Volume (17-18)
[In Rs crore]
Value (17-18)
[In Rs crore]
1 UPI-Unified Payment Interface, BHIM, USSD 92 109832
2 RuPay (POS) 46 48886
3 RuPay (eComm) 21 16635
Total 159 175353
Source: NPCI/MeitY
B. Revenue implication: A large number of digital transactions may be done for utility payments
or other payments which do not attract GST. The benefit would accrue only on B2C transactions
involving GST supplies. Further, benefit would be restricted to Rs 100 per transaction. Accordingly,
revenue estimation done is as follows:
S. No. Description Amount
1 Average value per transaction Rs 1103
2 Weighted average GST rate 14%
3 If 33% of the above stated transactions are eligible
for benefit-the revenue implication at the rate of 20%
of GST paid would be = Total Value*(33%)*weighted
rate (5)*20%
Rs 1636 crore
Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 7 of 9
4 If 25% of the transactions are eligible for concession,
the implication would be
Rs 1239 crore
5 If 20% of the transactions get the benefit, the GST
concession would be
Rs 991 crore
3. The Council discussed the above proposal in the 28th GST Council Meeting held on 21.07.2018
and the Council recommended that this proposal may be considered by the Group of Ministers (GoM)
on Digital Payments for further refinement and to be taken up in the next Council Meeting to be held on
4th August, 2018.
4. The matter has been examined by the GoM on Digital Payments in the meeting held on
03.08.2018. The GoM observed that incentivising digital payments by way of instant cashback of GST
shall increase the compliances. This would lead to increased capturing of B2C transactions in GST.
Thus, significant gain in revenue are likely on implementation of this proposal. The gains due to
increased revenue collection will offset any cost that is anticipated on account of cashback of GST. It
would additionally lead to the following gains:
i) Increased formalisation – reduced GST evasion
ii) Increased Transparency in business
iii) Incentive to use the digitisation will reduced rural – urban divide
iv) Improved compliance and reduction in cash transaction vis-à-vis GDP.
v) No discrimination with rural and poor population as there is no GST for traders below threshold
and traders availing composition scheme are out of scheme coverage
vi) Increased consumer participation because of incentive.
vii) The revenue implication of the policy should not be seen as a cost but as an investment to
formalise the economy in long term.
4.1 The GoM also discussed the concerns raised by the Hon’ble Finance Minister of West Bengal
Dr. Amit Mitra. Hon’ble Minister has raised inter-alia following concerns:
i) Belief that the UPI, BHIM, USSD and Rupay cards are popular in rural areas is not true. For
Example, large number of Rupay cards are still lying with banking correspondence in rural
areas.
ii) Lack of digital infrastructure in rural and semi urban markets like POS machine.
iii) The revenue implication of Rs 1636 crore will further aggravate the shortfall in GST revenue
which so far has been below the expectation
4.2 In the above context the GoM observed that the incentives to promote the digital transaction
will provide incentives for use of Rupay cards on a large scale and also it will help in creating the digital
infrastructure in rural and semi urban markets. Also, increased compliance will offset the revenue loss
on account of cashback. Thus, the proposal would in fact address the above stated concerns.
4.3 GoM observed that the modalities to implement the scheme, after in principle approval of GST
Council, may be worked out in consultation with GSTN, MeitY and National Payments Corporation of
India (NPCI).
5. Accordingly, GoM approved the proposal and recommended the same to be placed before the
Council for favourable consideration.
Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 8 of 9
6. Accordingly, it is proposed that the Council may accord in principle approval to the proposal.
The exact modalities of implementation of the Scheme shall be worked out in consultation with MeitY,
GSTN and NPCI. The Scheme shall be implemented as soon as the modalities for its implementation
are put in place.
Detailed Agenda Note Volume 4 Agenda for 29th GSTCM
Page 9 of 9
Agenda Item 4: Any other agenda item with the permission of the Chairperson
Agenda Item 4(i): Notifying the due dates for furnishing the details in FORM GSTR-1, FORM
GSTR-2 and filing the return in FORM GSTR-3 and FORM GSTR-3B
The GST Council in its 26th meeting held on 10th March, 2018 decided to continue with the
present system of filing of the return in FORM GSTR-3B and the details of outward supplies in FORM
GSTR-1 for April to June, 2018 till the new return system is finalized. The basic principles of a new
GST return filing system, based on the recommendations of the Group of Ministers on IT simplification,
were approved by the GST Council in its 27th meeting held on 4th May, 2018. Further, the GST Council
in its 28th meeting held on 21st July, 2018 approved the key features and the new format of the GST
returns.
2. Till the time the new return filing system is developed and implemented, it is proposed to
continue with the present system of filing the details of outward supplies in FORM GSTR-1 and a
summary return in FORM GSTR-3B till March, 2019 along with postponing the furnishing of the
details of inward supplies in FORM GSTR-2 and the return in FORM GSTR-3 till March, 2019.
3. Thus, it is proposed to notify the due date for filing the said FORMS as below:
(i) the due date for furnishing the details in FORM GSTR-1 for the months of July, 2018 to
March, 2019 to be the 11th of the corresponding next month for the registered persons having
aggregate turnover of more than Rs 1.5 crore in the preceding financial year or the current
financial year;
(ii) the due date for furnishing the details in FORM GSTR-1 for the quarters July’18-Sep’18,
Oct’18-Dec’18, Jan’19-Mar’19 to be the last day of the month (30th/31st) following the end of
the corresponding quarter for the registered persons having aggregate turnover of up to Rs 1.5
crore in the preceding financial year or the current financial year;
(iii) the due date for filing the return in FORM GSTR-3B for the months of July, 2018 to
March, 2019 to be the 20th of the corresponding next month.
(iv) the due date for furnishing the details in FORM GSTR-2 and filing the return in FORM
GSTR-3 for the months of July, 2018 to March, 2019 shall be notified subsequently.
4. Accordingly, the approval of the GST Council is sought to notify the due dates as detailed in
paragraph 3 above.

Detailed Agenda Note Volume 4 Agenda for 29th GSTCM


Table Agenda for the 29th GST Council Meeting
Agenda Note on the proposals for amendment in the Central Goods and Services Tax
Act, 2017

The GST Council in its 28th meeting held on 21.07.2018 approved the proposals for
amendment in the GST Laws.
2. Accordingly, draft amendment Bills were prepared in consultation with the
Legislative department of the Union Ministry of Law and Justice for their introduction in the
ongoing Monsoon Session of the Parliament. The draft Bills were placed before the Union
Cabinet on 01.08.2018 for consideration and approval.
3. It has been observed that the original formulation of second proviso to section 16(2)
of the Central Goods and Services Tax Act, 2017 is more beneficial to the MSME and
deletion of the phrase “along with interest thereon” would reduce the incentive for timely
payment to suppliers, especially to MSMEs. Union Cabinet, while considering the
amendments has also noted this concern.
4. Accordingly, the approval of the GST Council is sought not to carry out the proposed
amendment in the second proviso to section 16(2) of the Central Goods and Services Tax
Act, 2017.
*****
Table agenda -withdraw amendment to Section 16(2) of the CGST Act 2017 Agenda for 29th GSTCM