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Update: Summary of decisions taken in 52nd GST Council meeting
Update: Summary of decisions taken in 52nd GST Council meeting

October 10, 2023

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The 52nd meeting of the GST Council was held on October 7, 2023. Some of the important updates pursuant to the meeting are as follows:

  1. Alignment of provisions of Central Goods and Services Tax Act, 2017 (CGST Act) with the provisions of Tribunal Reforms Act, 2021 in respect of Appointment of President and Member of the proposed GST Appellate Tribunals

The GST Council has decided to amend relevant sections to provide that an advocate for ten years with substantial experience in litigation under indirect tax laws in the Appellate Tribunal, CESTAT, State VAT Tribunals, High Court or Supreme Court is eligible for the appointment as judicial member;

Minimum age of appointment as a president and member should be 50 years and shall have a tenure up to maximum age of 70 years and 67 years respectively.

This move should help put the ongoing debate and dispute in connection with the Petition filed by the Madras Bar Association and fast track setting up of the Tribunals.

  1. Law amendment with respect to ISD as recommended by the GST Council in its 50th meeting

GST Council, in its 50th meeting, had recommended that Input Service Distributor (ISD) procedure may be made mandatory prospectively for distribution of common Input Tax Credit (ITC) in respect of input services procured by Head Office (HO) but attributable to both HO and Branch Office (BO) or exclusively to one or more BOs. The Council has now suggested amendments in S. 2(61) and S. 20 of CGST Act, and amendment in Rule 39 of CGST Rules, to give effect to the above recommendation.

  1. Amnesty scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period

It was decided to extend the time period for filing appeals under S. 107 of CGST Act, against the demand order under S. 73 or S. 74 of CGST Act, passed on or before the 31st day of March, 2023 up to January 31st 2024. This extension is subject to the condition of payment of an amount of pre-deposit of 12.5% (which is generally 10%) of the tax under dispute, out of which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger.  This will  provide some relief in specific cases.

  1. Clarification regarding personal and corporate guarantee

Where personal guarantee is offered by directors to the bank against the credit limits/loans being sanctioned to the company for which no consideration is paid by the company to the director, the open market value of the said transaction/ supply may be treated as zero and hence, no tax to be payable in respect of such supply of services.

For the corporate guarantee provided for related persons including corporate guarantee provided by holding company to its subsidiary company, the taxable value of supply of corporate guarantee provided between related parties shall be 1% of the amount of such guarantee offered, or the actual consideration, whichever is higher.

We are awaiting the fine prints of the detailed Circular, as it will be important to analyse the implications it could have on other related party transactions.

  1. Other recommendations
  • Issue of a circular to clarify the admissibility of export remittances received in Special INR Vostro account, as permitted by RBI, for the purpose of consideration of supply of services to qualify as export of services.
  • Amendment to Rule 159 of CGST Rules, to provide that the order for provisional attachment of property in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order.
  • Amendment to Notification No. 1/2023-Integrated Tax dated 31.07.2023 w.e.f. 01.10.2023 so as to allow the suppliers of goods and services to a SEZ developer / unit for authorised operations on payment of integrated tax and claim the refund of tax so paid.
  • Clarifications regarding place of supply in respect of (a) exports vide mail/ courier (b) advertising services and (c) co-location services.

We hope you will find these updates useful. Copy of the press release is attached for your reference.


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Final Press Release_Council meeting.pdf

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