Outcome of 20th GST Council Meeting held on 5th August, 2017

The GST Council is the constitutional body and a joint forum of the Centre and states Consisting of Union Finance Minister as Chairperson and its members include Union Minister of State (Finance), Finance Minister or other Minister nominated by State Governments to decide on issues relating to GST and make necessary recommendations.

The GST Council has met 19 times so far and 20th meeting was held in Delhi with an agenda on the discussing for the textile industry, Anti-profiteering, and E-way bill. Below is the summary of key changes taken into consideration during the meeting.

The key highlights of the meetings are as follows:

For Reverse Charge-Firm includes LLP

Services provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly to any business entity, attracts Reverse Charge and the recipient of service is liable to pay GST. Partnership firm or a firm includes LLP (Limited liability Partnership) for the purposes of levy (including exemption therefrom) of GST on legal services.

Hence legal services (including representational services) provided by an individual advocate or a senior advocate or a firm of advocates (including LLP) provided to a business entity in the taxable territory are covered under Reverse Charge.

Job work under Textile sector-5%

GST has been capped at 5% on Job work services in respect of the textiles and textile products (Including Man-made fiber yarn, garments, made-ups, etc.) falling in Chapters 50 to 63.

Printing Services-12%/5%

Services by way of printing of newspapers, books (including Braille books), journals and periodicals where only content is supplied by the publisher and the physical inputs including paper used for printing belongs to the printer- 12% with full ITC

Fair Price Shop Dealers-Nil

Margin/commission payable to Fair Price Shop Dealers by Central/ State Governments are charged at Nil rate

Works Contract Services – 12% with full ITC

Works contract services provided to Government, local authority or governmental authority and in respect of post-harvest storage infrastructure for agricultural produce, mechanized food grain handling system shall be charged with GST at the rate of 12%.

Other Notable Mentions

Anti-Profiteering

Businesses should pass on the benefit of reduced tax under GST to consumers by complying with the Anti-Profiteering rules and the National anti-profiteering authority was proposed to have a 3 tier structure including a committee at the state level to deal with local complaints.

E-way bill

From 1st October a technology driven E-way bill system would be rolled out which shall have minimal intervention by tax inspectors. E-way bill is applicable for moving the Goods of value more than Rs 50,000. E-Way Bill would not be applicable to transport of goods which are exempted.

So above are the significant decisions come up in the meeting. Finally, GST Council relieved the agitated textile industry with reduced GST rate of 5% and an added stress on Anti-Profiteering and seamless movement of goods through the historical E-way bill.