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Recommendations/Clarifications made by the GST Council in its 25th Meeting held on 18th January, 2018

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 would like to inform you that in the 25th Meeting of the GST Council held on 18th January, 2018 under the Chairmanship of the Union Minister of Finance, Shri Arun Jaitley recommended reduction of tax rate on certain items of Goods & Service and simplification of return filing process.

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.

The Ministry of Finance, Government of India has released a Press Note on the recommendations which are given here below :

(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:


Chapter/Heading/Sub-heading/ Tariff item



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

(B)       Policy Changes recommended by the 25th GST Council Meeting

The following Policy Changes have been recommended by the GST Council in its 25th meeting held today:

  1. The late fee payable by any registered person for failure to furnish FORM GSTR-1 (supply details), FORM GSTR-5 (Non-resident taxable person) or FORM GSTR-5A (OIDAR) is being reduced to fifty rupees per day and shall be twenty rupees per day for NIL filers. The late fee payable for failure to furnish FORM GSTR-6 (Input Service Distributor) shall be fifty rupees per day.
  2. Taxable persons who have obtained voluntary registration will now be permitted to apply for cancellation of registration even before the expiry of one year from the effective date of registration.
  3. For migrated taxpayers, the last date for filing FORM GST REG-29 for cancellation of registration is being extended by further three months till 31st March, 2018.
  4. The facility for generation, modification and cancellation of e-way bills is being provided on trial basis on the portal Once fully operational, the e-way bill system will start functioning on the
  5. Certain modifications are being made to the e-way bill rules which are to be notified nationwide for inter-State movement with effect from 01.02.2018 and for intra-State movement with effect from a date to be announced separately by each State but not later than 01.06.2018.

(C)       Recommendations made on GST Rate changes on services by the 25th GST Council Meeting

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


To exempt supply of services by way of providing information under RTI Act, 2005 from GST.


To reduce GST rate on tailoring service from 18% to 5%.


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.


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.


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.


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,



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