Decisions taken in 22nd GST Council meeting held in New Delhi on Oct. 6, 2017

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Oct. 9, 2017

Members of the Council

Sub : Decisions taken in 22nd GST Council meeting held in New Delhi on Oct. 6, 2017

Members may please note the following major decisions taken in the 22nd GST Council meeting on Oct. 6, 2017.

  • Within 10.10.2017 the held-up refund of IGST paid on goods exported outside India in July would begin to be paid. The August backlog would get cleared from 18.10.2017 and refunds for subsequent months would be handled expeditiously. Other refunds of IGST paid on supplies to SEZs and of inputs taxes on exports under Bond/LUT, shall be processed from 18.10.2017 onwards. For this, the Council agreed to suitably empower Central and State GST officers so that exporters get refunds from one authority only. Related matters of settlement of funds are being resolved.
  • To prevent cash blockage of exporters due to upfront payment of GST on inputs etc. the Council approved two proposals, one for immediate relief and the other for providing long term support to exporters. Immediate relief is being given by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs would not have to pay IGST, Cess etc. on imports. Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies given to the supplier.
  • Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export. The details would be released soon.
  • The permanent solution to cash blockage is that of “e-Wallet” which would be credited with a notional amount as if it is an advance refund. This credit would be used to pay IGST, GST etc. The details of this facility would be worked out soon. The Council desired that the “e-Wallet” solution should be made operational w.e.f. 1stApril 2018.
  • Exporters have been exempted from furnishing Bond and Bank Guarantee when they clear goods for export.
  • To restore the lost incentive on sale of duty credit scrips, the GST on sale-purchase of these scrips is being reduced from 5% to 0%.
  • The turnover limit for manufacturers for paying 2% GST (on turnover) under composition scheme has been increased from Rs.75 lakh to Rs.1 crore. The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018
  • Service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services
  • To facilitate the ease of payment and return filing for small and medium businesses with annual aggregate turnover up to Rs. 1.5 crores, it has been decided that such taxpayers shall be required to file quarterly returns in FORM GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the Third Quarter of this Financial Year i.e. October-December, 2017. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis
  • The reverse charge mechanism i.e. buyer paying the tax instead of supplier, shall be suspended till 31.03.2018 and will be reviewed by a committee of experts
  • Taxpayers having annual aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.

The following materials are enclosed herewith.

  1. Press Release issued by Ministry of Finance on Relief Package for exporters
  2. Press Release issued by Ministry of Finance on decisions taken in 22nd GST Council meeting.
  3. GST Council decisions on rates of GST on goods.

Thanks and regards

Ramesh Kumar
Executive Director

Press Release || GST Council Decisions || GST Council Press Release