Important GST Updates: Summary of Notifications / Clarifications issued in the month of Nov’2021

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A. Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices, vide Circular No. 165/21/2021 dated 17th Nov, 2021:

 

In cases, wherever an invoice is issued to a recipient located outside India, for supply of services, for which the place of supply is in India as per the provisions of IGST Act 2017, and the payment is received by the supplier, in convertible foreign exchange or in Indian Rupees wherever permitted by the RBI (such supply of services is not considered as export of services),

Such invoice may be issued without having a Dynamic QR Code, as such dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier.

 

B. Clarification on certain refund related issues vide Circular No. 166/22/2021 dated 17th Nov, 2021:

 

1.No time limit for claiming refund in case of excess balance in electronic cash ledger:

The provisions of section 54(1) of CGST Act shall not be applicable in regard to time period within which an application for refund can be filed in the case of excess balance in electronic cash ledger, i.e. Registered taxpayer could file application at any time for claiming refund of excess balance in electronic cash ledger.

 

Further, in case of amount deducted/collected as TDS/TCS by TDS/ TCS Deductor and credited to electronic cash ledger of the registered person, is equivalent to cash deposited in electronic cash ledger. Any amount, which remains unutilized in electronic cash ledger, after discharge of tax dues and other dues payable (either payment made by utilising credit ledger or cash ledger) can be refunded to the registered person as excess balance in electronic cash ledger. Hence, also in this case there is no time limit for claiming refund of excess balance in electronic cash ledger.

 

2. No Requirement for Furnishing of Certification/ declaration in case refund of excess balance in electronic cash ledger:

Furnishing of certification/ declaration under Rule 89(2)(l) or 89(2)(m) of the CGST Rules, 2017 for not passing the incidence of tax to any other person is not required in case of refund of excess balance in electronic cash ledger as unjust enrichment clause is not applicable in such cases.

 

3. Relevant date for Refund in case of deemed exports:

Relevant date in case of claim for refund of amount of tax paid on the supply of goods regarded as deemed exports irrespective of the fact whether the refund claim is filed by the supplier or by the recipient would be the date of filing of return, related to such supplies, by the supplier.

 

C. Changes in GST Rate on Supply of Goods w.e.f. 1st Jan, 2022 vide Notification No. 14/2021 Central Tax (Rate):

 

HSN DESCRIPTION Old Rate New Rate
5007 Woven fabrics of silk or of silk waste 5% 12%
5111 Woven fabrics of carded wool or of carded fine animal hair. 5% 12%
5112 Woven fabrics of combed wool or of combed fine animal hair 5% 12%
5113 Woven fabrics of coarse animal hair or of horse hair 5% 12%
5208 Woven fabrics of cotton, containing 85% or more by weight of cotton, weighing not more than 200g/m2. 5% 12%
5209 Woven fabrics of cotton, containing 85% or more by weight of cotton, weighing more than 200g/m2 5% 12%
5210 Woven fabrics of cotton, containing less than 85% by weight of cotton, mixed mainly or solely with man-made fibres, weighing not more than 200g/m2 5% 12%
5211 Woven fabrics of cotton, containing less than 85% by weight of cotton, mixed mainly or solely with man-made fibres, weighing more than 200g/m2. 5% 12%
5212 Other woven fabrics of cotton 5% 12%
5309 Woven fabrics of flax 5% 12%
5310 Woven fabrics of jute or of other textile bast fibres of heading 5303. 5% 12%
5311 Woven fabrics of other vegetable textile fibres; woven fabrics of paper yarn. 5% 12%
5407 Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404. 5% 12%
5408 Woven fabrics of artificial filament yarn, including woven fabrics obtained from materials of heading 5405.” 5% 12%
5512 Woven fabrics of synthetic staple fibres, containing 85% or more by weight of synthetic staple fibres. 5% 12%
5513 Woven fabrics of synthetic staple fibres, containing less than 85% by weight of such fibres, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2. 5% 12%
5514 Woven fabrics of synthetic staple fibres, containing less than 85% by weight of such fibres, mixed mainly or solely with cotton, of a weight exceeding 170 g/m2. 5% 12%
5515 Other woven fabrics of synthetic staple fibres. 5% 12%
5516 Woven fabrics of artificial staple fibres.” 5% 12%
5607 Twine, cordage, ropes and cables, whether or not plaited or braided and whether or not impregnated, coated, covered or sheathed with rubber or plastics. 5% 12%
5608 Knotted netting of twine, cordage or rope; made up of fishing nets and other made up nets, of textile materials. 5% 12%
5801 Woven pile fabrics and chenille fabrics, other than fabrics of heading 5802 or 5806.” 5% 12%
5806 Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs) 5% 12%
5808 Saree fall 5% 12%
5809 Woven fabrics of metal thread and woven fabrics of metallised yarn of heading 5605, of a kind used in apparel, as furnishing fabrics or for similar purposes, not elsewhere specified or included 5% 12%
5810 Embroidery in the piece, in strips or in motifs 5% 12%
chapter 60

6001 to 6006

1.    Pile fabrics, including “long pile” fabrics and terry fabrics, knitted or crocheted

2.    Knitted or crocheted fabrics, containing by weight 5% or more of elastomeric yarn or rubber thread, other than those of heading 6001

3.    Knitted or crocheted fabrics of a width not exceeding 30 cm, other than those of heading 6001 or 6002.

4.    Warp knit fabrics (including those made on galloon knitting machines), other than those of headings 6001 to 6004.

5.    Other knitted or crocheted fabrics.”

5% 12%
61 or 6501 or 6505 Article of apparel and clothing accessories or cap/topi, knitted or crocheted, of sale value not exceeding Rs. 1000 per piece 5% 12%
62 Articles of apparel and clothing accessories, not knitted or crocheted, of sale value not exceeding Rs. 1000 per piece 5% 12%
63 (other than 6305 32 00, 6305 33 00, 6309) 1.    Blankets and travelling rugs.

2.    Bed linen, table linen, toilet linen and kitchen linen.

3.    Curtains (including drapes) and interior blinds; curtain or bed valances

4.    Other furnishing articles, excluding those of heading 9404.

5.    Sacks and bags, of a kind used for the packing of goods.

6.    Tarpaulins, awnings and sun blinds; tents; sails for boats, sailboards or landcraft; camping good

7.    Other made up articles, including dress patterns.

8.    Sets, consisting of woven fabric and yarn, whether or not with accessories, for making up into rugs, tapestries, embroidered table cloths or serviettes, or similar textile articles, put up in packings for retail sale.

5% 12%
6309 Worn clothing and other worn articles 5% 12%
6310 Used or new rags, scrap, twine, cordage, rope and cables and worn out articles of twine, cordage, rope or cables, of textile materials 5% 12%
64 Footwear of sale value not exceeding Rs.1000 per pair 5% 12%
5501 Synthetic filament tow 18% 12%
5502 Artificial filament tow 18% 12%
5503 Synthetic staple fibres, not carded, combed or otherwise processed for spinning 18% 12%
5504 Artificial staple fibres, not carded, combed or otherwise processed for spinning 18% 12%
5505 Waste (including noils, yarn waste and garnetted stock) of man-made fibres 18% 12%
5506 Synthetic staple fibres, carded, combed or otherwise processed for spinning. 18% 12%
5507 Artificial staple fibres, carded, combed or otherwise processed for spinning. 18% 12%

 

D. Changes in GST Rate on Supply of Services w.e.f. 1st Jan, 2022 vide Notification No. 15/2021 Central Tax (Rate) dated 18th Nov, 2021:

 

1. Changes in GST Rates on supply of services from 12% to 18% if following services will be supplied to Governmental Authority or a Government Entity

 

a. Composite supply of works contract by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of historical monument, archaeological site or remains of nati.onal importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites, canal, dam or other irrigation works, pipeline, conduit or plant for water supply, water treatment, or sewerage treatment or disposal.

 

b. Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, provided by way of Construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of-

  • a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
  • a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or
  • a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017.

 

c. Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a subcontractor to the main contractor providing services specified in item (1) or item (2) above.

 

2. Changes in GST Rates on supply of services from 5% to 18% if following services will be supplied to Governmental Authority or a Government Entity

 

a. Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75 per cent of the value of the works contract).

 

b. Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a subcontractor to the main contractor providing services specified in item (1) above.

 

3. Changes in GST Rates on supply of services from 5% to 12%

Services by way of Job work in relation to dyeing or printing of the textile and textile products falling under Chapters 50 to 63 in the First Schedule to the Customs Tariff Act, 1975.

 

E. GST Exemption withdrawn on following services, w.e.f. 1st Jan, 2022 vide Notification No. 16/2021 Central Tax (Rate):

1. If services provided to Governmental Authority or a Government Entity:

 

a. Pure services (excluding works contract service or other composite supplies involving supply of any goods) by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.

 

b. Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.

 

2. If services provided through an electronic commerce operator

 

a. Transport of passengers, with or without accompanied belongings, by-

 

  • non-airconditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or
  • stage carriage other than air- conditioned stage carriage.

 

b. Service of transportation of passengers, with or without accompanied belongings, by metered cabs or auto rickshaws (including e-rickshaws).

F. GST Payable by Electronic Commerce Operator (ECO) if following services supplied through ECO w.e.f. 1st Jan, 2022 vide Notification No. 17/2021 Central Tax (Rate)

 

1. Services by way of transportation of passengers by omnibus or any other motor vehicle.

 

2. Supply of restaurant service other than the services supplied by restaurant, eating joints etc. providing hotel accommodation service having declared tariff of any unit of accommodation above Rs. 7,500/- per unit per day or equivalent.

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