GST Council reduces tax on liquid jaggery, pencil sharpeners

The items, which could not be discussed by the Council in its last meeting on December 17, 2022, were on top the agenda of the Saturday meeting, sources said.

“Raab is a kind of liquid jaggery which is so typical to Uttar Pradesh & other jaggery-producing states. We are reducing the GST rate on Raab from 18% to nil or 5%. Nil if it is loose. If it is pre-packaged and labelled, it will be 5%,” said Sitharaman .

“We have announced today that the entire due on the pending balance of the GST compensation will be cleared as of today…In other words, the entire pending balance of the GST compensation — a total of Rs 16,982 crores for June — will be cleared,” Sitharaman added.

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“Although this amount is not really available in the compensation fund as of today, we have decided to release this amount from our own resources and the same amount will be recouped from the future compensation cess collection” she said.

With this release, the Centre would clear the entire provisionally admissible compensation cess dues for 5 years as envisaged in the GST (Compensation to States) Act, 2017, she insisted.

Sitharaman added that, “GST on pencil sharpeners has come down from 18% to 12%. Also, there is a reduction in GST on tags tracking devices or data loggers which are affixed on durable containers, from 18% to nil, subject to some conditions.”

“For June 2022, 50% of the provisional GST compensation cess amount was released earlier. Now, we are releasing 50% amounting to Rs 16,982 crore. This will be from the funds of the Centre, which will be recouped later from the cess,” added Revenue Secretary Sanjay Malhotra.

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The Council has recommended rationalising the late fee for delayed filing of annual returns in Form GSTR-9 for 2022-23 onwards, for registered persons having aggregate turnover in a financial year up to Rs 20 crore. For registered persons having an aggregate turnover of up to Rs 5 crore in a fiscal, the late fee will be Rs 50 per day, subject to a maximum of 0.04 per cent of turnover. In case of more than Rs 5 crore and up to Rs 20 crore, the fine will be Rs 100 per day, subject to 0.04 per cent of the turnover.

Presently, a late fee of Rs 200 per day, subject to a maximum of 0.5 per cent of the turnover, is payable in case of delayed filing of the annual return in FORM GSTR-9 In order to provide relief to a large number of taxpayers, the Council recommended amnesty schemes in respect of pending returns in Form GSTR-4, Form GSTR-9 and Form GSTR-10 by way of conditional waiver/ reduction of late fee.

With a view to plugging the leakages and improving the revenue collection from the commodities like pan masala, gutkha, and chewing tobacco, the Council approved the recommendations of the GoM. The recommendations include the capacity-based levy not to be prescribed, and compliance and tracking measures to be taken to plug leakages/evasions.

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“On SUVs and MUVs, there was no recommendation from the fitment committee as they weren’t able to arrive at a decision. The matter will be re-looked and presented at the next Council meeting,” Said Malhotra during the press conference.

“GoM report on online gaming could not be taken up at today’s meeting as the chair of the GoM, Meghalaya chief minister Conrad Sangma is there and he was unable to come because of the elections in the state,” Sitharaman said.

Another recommendation of the GoM was that the compensation cess levied on such commodities be changed from ad valorem to a specific tax-based levy to boost the first stage collection of the revenue.

The GoM on checking tax evasion by pan masala and gutkha industry is headed by Odisha finance minister Niranjan Pujari, while Haryana deputy chief minister Dushyant Chautala leads the panel on Goods and Services Tax Appellate Tribunals (GSTATs).

(With agency inputs)