Recent developments in GST
Dr Sanjiv Agarwal
The Finance Bill, 2019 stands passed by the
Parliament. Within a month of the last meeting, GST
Council meets again for 36th time on 25 July, 2019.
It is likely to consider the proposals of GST rate
reduction in case of electric vehicles, from 12% to 5%
besides taking up similar issue for solar systems,
windmills etc. The GST rate on chargers may also be
slashed. The issue on lotteries is also to be discussed
subject to clarity from Government.
CBIC has clarified that outsourcing services in relation to information
technology services (BPO in common parlance) would attract GST @ 18%
and such services would not qualify as exports. This is likely to adversely
impact BPO activities as cost would go up straight by 18% (Circular No. 1 07
dated 18.07.2019).
Clarification has also been issued in respect of goods taken or sent out of
India for exhibition or on consignment basis for export promoter. Such
activities shall not constitute supply as there is no consideration involved at
the point of sending/ taking out (Circular No. 108 dated 18.07.201 9 ).
Recent developments at a glance
Applicability of GST on goods sent out of India for exhibition or for
export promotion
The activity of sending/ taking the goods out of India for exhibition or on
consignment basis for export promotion, except when such activity fall
under Schedule I to CGST Act, 2017, does not constitute supply, as there is
no consideration at that point in time.
Since the activity is not a supply, the same cannot be treated as zero-
rated supply as per section 16 of the IGST Act, 2017.
Such goods are required to be either sold or brought back within the
stipulated period of six months from the date of removal, if not, then supply
. shall be deemed to have taken place, on the expiry of six months.^
.
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