Circular No.ES/280 /2017-18 January 20, 2018
To: Members of the Council
Sub: Recommendations/Clarifications made by the GST Council in its 25th Meeting held on 18th January, 2018
Dear Member,
The Council has been representing continuously to the Government many issues relating to GST, one such being reduction of GST rate on transport of goods by Air and sea. We are glad to inform you that the Government has considered our request and granted exemption on the same. This decision will bring relief to our MMF Textile Industry.
(Relevant Extract of the Press Release)
(A) Recommendations for Changes in GST/IGST Rate and Clarifications in Respect of GST Rate on Certain Goods
The GST Council has recommended certain changes in GST/IGST rate and clarifications in respect of GST rate on Goods specified below. The decisions of the GST Council will be given effect to through Gazette notifications / circulars which only shall have the force of law.
List of goods on which gst rate recommended for reduction from 12% to 5% with no refund of unutilised input tax credit:
S.No. |
Chapter/Heading/Sub-heading/ Tariff item |
Description |
1. |
5801 37 20 |
Velvet fabric |
It is proposed to issue notification giving effect to the recommendations of the GST Council on 25th January, 2018 to be effective from 00 HRS on 25th January, 2018
The Council has recommended many relief measures regarding GST rates on goods and services covering many sectors and commodities. The Council has also recommended issuance of certain clarifications on issues relating to GST rates and taxability of certain goods and services.
Major recommendations of the Council are summarised below.
Changes relating to GST rates on certain services
(A) Exemptions / Changes in GST Rates / ITC Eligibility Criteria
1. |
To exempt supply of services by way of providing information under RTI Act, 2005 from GST. |
2. |
To reduce GST rate on tailoring service from 18% to 5%. |
3. |
To grant following exemptions: (i) To exempt service by way of transportation of goods from India to a place outside India by air; (ii) To exempt service by way of transportation of goods from India to a place outside India by sea and provide that value of such service may be excluded from the value of exempted services for the purpose of reversal of ITC. The above exemptions may be granted with a sunset clause upto 30th September, 2018. |
4. |
To exempt IGST payable under section 5(1) of the IGST Act, 2017 on supply of services covered by item 5(c) of Schedule II of the CGST Act, 2017 to the extent of aggregate of the duties and taxes leviable under section 3(7) of the Customs Tariff Act, 1975 read with sections 5 & 7 of IGST Act, 2017 on part of consideration declared under section 14(1) of the Customs Act, 1962 towards royalty and license fee includible in transaction value as specified under Rule 10 (c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. |
5. |
To reduce GST rate on transportation of petroleum crude and petroleum products (MS, HSD, ATF) through pipe line from 18% to 5% without ITC and 12% with ITC. |
6. |
To exempt dollar denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or any financial regulatory authority, to a person outside India. |
It is proposed to issue notifications giving effect to these recommendations of the GST Council on 25th January, 2018.
Members may please make a note that Notifications on the above changes will be intimated to you shortly.
Thanking You,
Yours faithfully,
S.BALARAJU
EXECUTIVE DIRECTOR