GST Circulars post 53rd GST Council meeting-Analysis Part 1

On June 22, 2024, the 53rd GST Council meeting was held in Delhi, with Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presiding. The council proposed various adjustments to GST rates, introduced trade facilitation measures, and sought to streamline GST compliance. Many circulars are issued after this meeting by CBIC. Let’s understand them one by one.

Highlights of 53rd GST Council Meeting- Part I

Highlights of 53rd GST Council Meeting- Part II

Highlights of 53rd GST Council Meeting- Part III

Circular No. 207/1/2024-GST dated 26.06.2024

This circular is related to the Reduction of Government Litigation. CBIC has fixed the following monetary limits below which appeal or application or Special Leave Petition, as the case may be, shall not be filed by the Central Tax officers before Goods and Service Tax Appellate Tribunal (GSTAT), High Court and Supreme Court under the provisions of CGST Act. The following monetary limits are fixed :

GSTAT: Rs. 20 lakhs

High Court: Rs. 1 crore

Supreme Court: Rs. 2 crores

However, these limits will not be applicable in the following cases:

1. Where any provision of the CGST Act or SGST/UTGST Act or IGST Act or GST (Compensation to States) Act has been held to be ultra vires to the Constitution of India; or
2. Where any Rules or regulations made under CGST Act or SGST/UTGST Act or IGST Act or GST (Compensation to States) Act have been held to be ultra vires the parent Act; or
3. Where any order, notification, instruction, or circular issued by the Government or the Board has been held to be ultra vires of the CGST Act or SGST/UTGST Act or IGST Act or GST (Compensation to States) Actor the Rules made thereunder; or
4. Where the matter is related to –

• Valuation of goods or services
• Classification of goods or services
• Refunds
• Place of Supply
• Any other issue

5. Which is recurring in nature and/or involves interpretation of the provisions of the Act /the Rules/ notification/circular/order/instruction etc; or

6. Where strictures/adverse comments have been passed and/or cost has been imposed against the Government/Department or their officers; or

7. Any other case or class of cases, where in the opinion of the Board, it is necessary to contest in the interest of justice or revenue.

Circular No. 208/2/2024-GST dated 26.06.2024

This circular covers clarifications on various issues pertaining to special procedures for the manufacturers of Pan masala and tobacco taxpayers. As per Notification No. 04/2024- Central Tax dated 05th January 2024, all the registered persons engaged in manufacturing the goods mentioned in Schedule to this notification shall furnish the details of packing machines being used for filling and packing of packages in FORM GST SRM-I, electronically on the common portal, within thirty days of coming into effect of this notification. However, some issues are raised by the taxpayers. Clarifications are provided in this regard by CBIC in this circular. To read it in detail, read our blog “CBIC issued circular related to form SRM I, II and III”.

Circular No. 209/3/2024-GST dated 26th June, 2024

This circular provides clarification on the provisions of Section 10(1)(ca) of the IGST Act, 2017 relating to the place of supply of goods to unregistered persons.

Clause (ca) has been inserted in Section 10(1) of the IGST Act, with effect from 01.10.2023. The same is reproduced as under:

"(ca) where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.

Explanation.—For the purposes of this clause, recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person;"

Clause (ca) provides that where the supply of goods is made to an unregistered person, the place of supply would be the location as per the address of the said person recorded in the invoice and the location of the supplier where the address of the said person is not recorded in the invoice. An explanation has also been added to the said clause to clarify that recording the name of the State of the said person shall be deemed to be the recording of the address of the said person.

However, there is uncertainty as to the supply of goods made to an unregistered person where the billing address is different from the address of delivery of goods, especially in the context of supply being made through e-commerce platforms.

It is clarified by this circular by way of the following example:

Mr. A (unregistered person) located in X State places an order on an e-commerce platform for the supply of a mobile phone, which is to be delivered to an address located in Y State.

Q.: Mr. A, while placing the order on the e-commerce platform, provides the billing address located in X state. In such a scenario, what would be the place of supply of the said supply of mobile phones, whether the State about the billing address i.e. State X or the State pertaining to the delivery address i.e. State Y?

Ans: In such cases involving the supply of goods to an unregistered person, where the address of delivery of goods recorded on the invoice is different from the billing address of the said unregistered person on the invoice, the place of supply of goods by the provisions of clause (ca) of sub-section (1) of section 10 of IGST Act, shall be the address of delivery of goods recorded on the invoice i.e. State Y in the present case where the delivery address is located.

Also, in such cases involving the supply of goods to an unregistered person, where the billing address and delivery address are different, the supplier may record the delivery address as the address of the recipient on the invoice to determine of place of supply of the said supply of goods.

Conclusion

In conclusion, the recent GST circulars issued post the 53rd GST Council meeting mark significant strides in refining and optimizing India's Goods and Services Tax framework. By addressing critical issues such as compliance simplifications, clarifications on taxability, and procedural enhancements, these circulars aim to facilitate smoother operations for businesses while ensuring robust tax governance.

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