In an important step to plug leakages, the GST Council on Saturday approved a proposal to introduce a ‘track and trace mechanism’ for specified theft-prone items, under which such goods or packages will be marked with a unique mark to trace them to supply. Chain.
It is to insert an enabling provision in the CGST Act, 2017 vide Section 148A to empower the Government to implement track and trace mechanism for specified theft-prone items.
“The system will be based on a unique identification marking that will be affixed to the items or their packages. It will provide a legal framework for developing such a system and help in the implementation of a mechanism to trace specific items in the supply chain. Announcing the decisions taken by the 55th Council meeting, the Ministry of Finance said .
Another key decision was to mandate that bills for online services clearly specify the state where the service is provided, it added.
Currently, many inter-state transactions lack proper documentation of the place of service, resulting in the state of consumption not receiving applicable tax. The change is expected to address the issue and ensure more accurate tax distribution, the statement said.
“To clarify that in respect of supply of ‘online services’ such as online money gaming, OIDAR services, etc. to unregistered recipients, the supplier shall compulsorily record the name of the state of the unregistered recipient in the tax invoice. And such name of the recipient’s state for the purpose of Sec. 12(2)(b) of the IGST Act, 2017 as per CGST Rules, 2017 shall be deemed to be the address on record of the recipient. 46(f) read with the proviso,” it said.
Regarding the decision taken on GST rate on commodities, Finance Minister Nirmala Sitharaman said, the Council has decided to reduce the rate on Fortified Rice Kernel (FRK) from 18% to 5% and also decided to give GST exemption on gene therapy.
Also, she said, the rate of compensatory cess on supplies to merchant exporters will be reduced to 0.1% at par with the GST rate on such supplies and the inspection team has decided to exempt all equipment and consumable samples from IGST. subject to conditions specified by the International Atomic Energy Agency (IAEA).
In terms of services, she said, the Council has decided to exempt GST on contributions made by general insurance companies from third-party motor vehicle premiums deposited in the Motor Vehicle Accident Fund constituted under Section 164B of the Motor Vehicle Act, 1988. .
This fund is constituted to provide compensation/cashless treatment to victims of road accidents including hit and run cases.
In addition, she said, the GST Council has recommended that no GST be levied on transactions of vouchers as they are neither supply of goods nor supply of services.
Voucher-related provisions are also being simplified, he added, adding that the council has recommended revising the definition of ‘pre-packaged and labelled’ to cover all items intended for retail sale and not exceeding 25 kg or 25 litres. which is ‘pre-packed’ as defined under the Legal Metrology Act, or is required to bear a label affixed thereto. Declarations under the provisions of the Act and Rules.
It was also clarified that no GST would be payable on ‘penalty charges’ levied by banks and NBFCs on borrowers for non-compliance with loan conditions.
The Council of Ministers has also given approval to issue clarifications through circulars to remove ambiguity and legal disputes on some issues.
The panel recommended reduction of payment of advance deposit for filing an appeal before the Appellate Authority against the order passed, which includes only the penalty amount.