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The Central Board of Indirect Taxes and Customs issued circulars after the 37th GST Council Meeting

  • Oct 11, 2019 | Divita S Gupta

The Central Board of Indirect Taxes and Customs issued circulars after the 37th GST Council Meeting

The Central Board of Indirect Taxes and Customs has issued the following circulars after the 37th GST Council Meeting held on 20th September 2019 in Goa. 

19 month low for GST Collection
The Goods and Service Tax Collection for the month of September has hit a 19 month low at Rs 91,916 crores - these numbers last reached so low in February 2018. This reflects the generally subdued consumption level among Indian citizens especially in the automobile sector with 2 and 4 wheeler sales facing a slump. Additionally, this 19 month low could even affect the GST compensation to state governments as state revenues from this tax will come under pressure. 

GST Council faces legal notice
The High Court of the state of Gujarat issued notices to the Centre, the Goods and Services Tax (GST) Council and the Central Board of Indirect Taxes and Customs (CBIC) for allegedly discriminating between two sets of importers after an exemption on IGST was granted on the import of repair and maintenance goods under the place of supply rules. However, no exemption was given to job works of similar nature.

Proposed GST forms could be a pain point
The current GSTR1 form that is proposed to be replaced with the Sahaj and Sugam GST forms might prove to be cumbersome for small business owners for obtaining input tax credit. Under the current filing process, there is no provision for immediate revision of returns thereby forcing taxpayers to rectify errors in the subsequent filing - any errors at this juncture could lead to additional tax outflow. Sahaj and Sugam can be filed by small businesses (turnover under 5cr). However, these forms do not allow taxpayers to claim ITC on missing invoices/invoices not filed by the supplier.

Reverse Charge
Starting October 1st, 2019, companies providing motor vehicles on rent (Uber, Ola, Meruand other rent a cab services) will be required to pay a reverse GST of 5%. However, this charge will not be applicable if the service provider is charging GST at 12%. 

New return system rescheduled
The new return system which was to be rolled out on October 1st 2019 has now been rescheduled to roll out in April 2020. About 93% of GST taxpayers will be relieved of monthly return filing from the next fiscal year once the new simplified return system comes into effect. 

Changes in GST Rates

  • Service providers supplying cars on rent with a driver will be liable to pay a GST at 18%. Self drive rental cars, however, will continue to pay GST at 28%. 
  • Staying at a hotel where the tariffs falls between the bracket of Rs. 1,001/- to Rs. 7,500/- will become cheaper as the GST has been reduced to 12%. If the tariff is higher than Rs. 7500/-, a GST rate of 18% is applicable. The Tourism Ministry of India will be planning a promotion around this fall in GST rate. 
  • GST rates have been revised for job work services. If the work undertaken by an employee results in the manufacture of a finished product, GST is applicable at 18%. If it doesn't result in the manufacture of a product, GST is applicable at 12%. 
  • Landowners who are transferring their ownership rights to builders under redevelopment, property development projects will not be required to register under GST. 

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Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.