Recommendation of the 50th GST Council

Clarification to be issued that only those services which are provided by the Director in his capacity as Director of that company are taxable in the hands of the company under RCM basis.

Any services which are provided in his private or personal capacity such as 'Renting of Immovable property' are not taxable in the hands of the company under RCM. ('Consequently, tax on such services provided by Director in his private or personal capacity is to be paid by such Director on forward charge basis, if he has crossed the threshold limit for registration or is liable to be registered under GST.')

To continue with the relaxation provided in reporting to be made in various tables/fields of the GSTR 9 and 9C for the FY 2021-22 to be continued for FY 2022-23 also.

Exemption from the filing of GSTR 9/9A for small taxpayers having Aggregate annual turnover of up to 2 crores to continue for FY 2022-23

a) Issuance of circular to clarify that ISD Mechanism is not mandatory for distribution of ITC of common Input services procured from third parties to Distinct persons as per existing provisions of GST law. ('The Govt. apparently intends to regularize transfer of such common credit through cross charge mechanism or where no cross charge or distribution has been done for past period . Clear picture will emerge after issuance of circular)

b) To clarify issues regarding taxability of internally generated services ('such as Management Services /sharing of resources etc.) between distinct person (i.e., multiple registration under same PAN number.')

c) Suitable amendment in GST Law to make it mandatory for Taxpayers to distribute ITC of common Input Services procured from Third Parties through ISD mechanism. The amendment is proposed to be made prospectively

Refund of accumulated ITC under section 54 (3) will be restricted to ITC reflecting in GSTR 2B return of the said tax period or any previous Tax period

('Clarity is required for ITC available for reverse charge payment and BOE not reflecting in GSTR 2B)

Value of Export of Goods for the purpose of calculating Value of adjusted total turnover while calculating refund under rule 89(4) is to be taken as lesser of following:

1. FOB value declared in shipping Bill or

2. Value declared in tax invoice .

('This is in alignment with the explanation inserted in Rule 89(4))

Clarification regarding admissibility of refund where export of goods or export of services does not take place within the period specified under Rule 96A.

(In terms of Rule 96A export Goods needs to happen within three months from the date of issue of invoice for export and in case of export of services, the payment in convertible Foreign Exchange needs to be received within one year from the date of issue of invoice for such export.')

Circular to be issued to clarify that interest under section 50(3) of the CGST Act, 2017 in respect of ITC wrongly availed and utilized under the IGST head will be calculated considering the cumulative balance available under the IGST, CGST and SGST heads and not on the basis of balance available under the IGST head alone .

('this means that for CGST and SGST heads interest will be calculated head wise and not cumulatively')

Notification to bring into effect amendment in Section 16 of the IGST 2017 (amended vide Section 123 of the Finance Act ,2021) from 1.10.2023.

('Major changes made vide the said amendment are as under:
that supply of goods or services to SEZ shall be treated as zero rated supply only if the same is used for authorized operations of SEZ

That in the case of non-realization of export proceeds, registered person is required to deposit the refund received along with interest under section 50

Grant of Power to the Government to notify class of persons who may make zero rated supply on payment of IGST and claim refund of IGST so paid as well as to Notify Class of goods and services which may be exported on payment of duty for which the registered persons may claim refund of the Tax paid)